Oyu Tolgoi sucks up cash and Ivanhoe must sell off assets. Investors chase stock up 5% betting on rich buyers
After steady gains throughout the day Ivanhoe Mines (TSE:IVN) – building one of the richest copper and gold mines in the world – ended Thursday up 5.47% at $18.11 on the TSX.
Investors were reacting to a statement put out by Ivanhoe’s founder and CEO Robert Friedland on Tuesday saying the company has received “detailed, written expressions of interest on potential asset divestments that could realize significant capital to support the ongoing development of Oyu Tolgoi.”
Ivanhoe has already spent over $5 billion on the 66%-owned project in Mongolia and the mega-mine, scheduled for production in Q3, is still sucking up all of Ivanhoe’s cash.
Ivanhoe holds a 58% stake in Mongolian coal miner SouthGobi Resources and a 59% stake in Ivanhoe Australia where it has a number of copper-gold projects in various stages of development. The company also owns half of a private gold project in Kazakhstan.
Ivanhoe stock is flat for 2012 and down from a peak above $28/share reached in February last year. After Thursday’s gains the market put a value of $13.4 billion on the company.
World number three miner Rio Tinto took control of Ivanhoe Mines in January after Ivanhoe scrapped a controversial “poison pill” shareholder provision clearing the way for Rio, which already owned 49% of the Vancouver-based company, to do a complete takeover.
Rio paid $20/share for the additional 2%.
In October Ivanhoe and Rio dodged a bullet when the Mongolian government said it was rethinking the 2009 deal that gave Ivanhoe Mines a 66% stake in Oyu Tolgoi and that it wanted half of the $6 billion project.
Ivanhoe shares plunged on the news, but the firm took a tough stance and after some desperate negotiations Mongolia backed off.
Oyu Tolgoi, which Ivanhoe has been advancing for the last 8 years, is one of the biggest mining projects in the world and will help turn Mongolia into the world’s fastest-growing economy with staggering GDP growth of 35%.
73%-built, the mine is set to produce more than 1.2 billion pounds of copper and 650,000 ounces of gold each year.
While Oyu Tolgoi is nearing completion, Mongolia’s other massive resource project Tavan Tolgoi seems to be stalling once again.
Read here why investors are asked to wait once again before they can get their hands on world’s largest met coal deposit.
Frik Els | March 1, 2012
Investors were reacting to a statement put out by Ivanhoe’s founder and CEO Robert Friedland on Tuesday saying the company has received “detailed, written expressions of interest on potential asset divestments that could realize significant capital to support the ongoing development of Oyu Tolgoi.”
Ivanhoe has already spent over $5 billion on the 66%-owned project in Mongolia and the mega-mine, scheduled for production in Q3, is still sucking up all of Ivanhoe’s cash.
Ivanhoe holds a 58% stake in Mongolian coal miner SouthGobi Resources and a 59% stake in Ivanhoe Australia where it has a number of copper-gold projects in various stages of development. The company also owns half of a private gold project in Kazakhstan.
Ivanhoe stock is flat for 2012 and down from a peak above $28/share reached in February last year. After Thursday’s gains the market put a value of $13.4 billion on the company.
World number three miner Rio Tinto took control of Ivanhoe Mines in January after Ivanhoe scrapped a controversial “poison pill” shareholder provision clearing the way for Rio, which already owned 49% of the Vancouver-based company, to do a complete takeover.
Rio paid $20/share for the additional 2%.
In October Ivanhoe and Rio dodged a bullet when the Mongolian government said it was rethinking the 2009 deal that gave Ivanhoe Mines a 66% stake in Oyu Tolgoi and that it wanted half of the $6 billion project.
Ivanhoe shares plunged on the news, but the firm took a tough stance and after some desperate negotiations Mongolia backed off.
Oyu Tolgoi, which Ivanhoe has been advancing for the last 8 years, is one of the biggest mining projects in the world and will help turn Mongolia into the world’s fastest-growing economy with staggering GDP growth of 35%.
73%-built, the mine is set to produce more than 1.2 billion pounds of copper and 650,000 ounces of gold each year.
While Oyu Tolgoi is nearing completion, Mongolia’s other massive resource project Tavan Tolgoi seems to be stalling once again.
Read here why investors are asked to wait once again before they can get their hands on world’s largest met coal deposit.
Frik Els | March 1, 2012
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