Ivanhoe Mines Ltd (IVPAF)

[tootalljones]

Ivanhoe Estimated NPV/Share (USD) $9.74
by good new poster goindeeper, although he just barely footnotes in passing the [inaccurateunfairuntruedishonestmostridiculous valuation methodology, and over time subject to change I might add....] of the current financial rage for using NPV8s in valuing a HALF CENTURY of several tier one World mineral discoveries as assets that imaginarily [I am hoping to get this my new word into the dictionary, a cumbersome task] just last ten years, but still, a mathematical post of CURRENT value. As in what the stock should be today. The method does not account for political risk, which is sort of a sci fi mind melding cloak of invisibility thing, if you view life with a Western Mind..............



goindeeper
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Post# 25951393

RE:NPV/ share
I was thinking about this again after re-reading ursusbrumae posts and listening to RF call. I realized that at this point, NPV will not increase with any increase in the MR because NPV8 is capped at 10 years out (which is why RF says it is a such a bad valuation method). The bottleneck to NPV8 for Kakula is not how many resources we have, but how fast we can get them out. I've made some quick assumptions, so please help me correct any inaccuracies you see. I see the resulting number as a reasonable estimate of today's value based on the analyst metrics. Of course, as longer term investors, we want to factor in some additional value because those mines will still have cash flow and value after 10 years.

added assumptions of: 1. Ursusbrumae Kipushi NPV8 of $1.515 billion
2. cash on hand is $350 million
3. Kakula expands to 16Mtpa from 4 per Dec 13/2016 NR, assume conservative 700 kt copper/a, so increase in NPV8= 700 kt/209 kt*$3.7b=$12.4 billion
4. Kakula cost of expansion to 16Mtpa from 4Mtpa as a share of NPV is about 20% (cost increase from 4 to 8 was stated as zero); so $12.4b*.8=$9.9billion
5. Kamoa will stay at NPV8 of $1 billion
6. No benefit to NPV8 from Kakula MR increase since we can't mine any more in the first 10 years anyway.

Deposit NPV8 (billions) IVN % IVN NPV8 (billions)
Kamoa/Kakula $10.90 40% $4.32
Platreef $3.00 64% $1.92
Kipushi $1.52 68% $1.03
Cash-Liabilities $0.35 100% $0.35
Total IVN NPV (billions) $7.62
Outstanding Shares 782000000

Ivanhoe Estimated NPV/Share (USD) $9.74