Ivanhoe Mines Ltd (IVPAF)

[tootalljones]

http://www.vale.com/canada/EN/business/mining/our-base-metals-business/Pages/default.aspx
ursusbrumae

January 19, 2017 - 04:55 AM 414 Reads
Post# 25726575

Voisey's Bay In-Situ Value
Another valuation methodology...

Take the in-situ value of the metal in the ground at Voisey's Bay in 1996, i.e., the market value of all the nickel, copper and cobalt, even giving generous allowance for asynchronous cycle high refined metal spot prices of 1995-96: USD 32.6B. Divide it into the acquisition price of Diamond Fields by INCO: USD 4.3B. 13% in-situ/cap ratio.

Measure the same for K&K, K & P; copper, zinc and PGMs, at current spot prices, at net interest of each project to IVN: USD 138B. Apply the VB in-situ/cap ratio of 13%, divide by float, exchange to CAD. The result? North of $30/share.

Take metal prices to old highs, and the amount is roughly double: $60/share.

Yet the resources are growing every day....

What are we at now, 3 dollars? 4?

Some may be reflecting on quick gains and an embarrassment of riches, thinking of taking some off the table, or hedging a little for prudence. Some may be wondering if it's too late to climb aboard. I would not endeavour to advise, but only observe...

I don't know much, but I have spent the past years and twenty thousand hours studying this narrow subject. Well, stock speculation touches upon a number of subjects: geology, engineering, metallurgy, technology, economics, finance, law, politics, history, psychology, and people. I shan't bore you with the details, but let me save you the twenty thousand hours. Here are the two things I have learned.

1. The best mining stocks in every cycle go up 20, 50, 100-fold or more, and often only in a couple of years.

2. This is the best stock of this cycle, or any I have ever seen or read about or imagined.

You may draw your own conclusions.

Now I am old with wandering, through hollow lands and hilly lands....