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H. C. Wainwright agrees with us -
Irrational Opioid Crisis Volatility Nipping at AcelRx Pharmaceuticals Inc (ACRX) Presents Stellar Entry Point: H.C. Wainwright
Julie Lamb, Editor-August 7, 2017, 5:45 AM EDT
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AcelRx Pharmaceuticals Inc (NASDAQ:ACRX) investors are getting enthusiastic again after the biotech firm’s Phase 3 IAP312 clinical trial of Zalviso, approved in the EU to treat moderate-to-severe acute pain in a hospital setting, had initially sent the stock on a close to 14% dive.
However, shares were rising almost 5% on Friday, and H.C. Wainwright Ed Arce sizes up this “unusually high” volatility throughout the past three weeks as ideal for a bullish AcelRx investor, for the “Irrational market provides excellent entry point, in our view.”
As such, the analyst reiterates a Buy rating on ACRX with a $7 price target, which represents a 141% increase from where the shares last closed. (To watch Arce’s track record, click here.)
Initially, shares had been surging ahead of the positive Zalviso trial amid lofty anticipation. Volatility hinges upon wary market sentiment circling the “opioid crisis” that some believe could prevent the FDA from giving the drug the green light due to drug accountability apprehensions. However, with the device error rate outperforming expectation, Arce anticipates better patient training as well as nurse inspection protocols will satisfy the FDA’s unease.
On the heels of the Phase III data read-out, Arce underscores, “[…] we believe many of the same momentum players that drove the share price up then liquidated their positions, taking their profits and driving the shares back down to close yesterday at $2.78 (-28.7% vs. NBI -1.4%). From our perspective, the current market’s myopic view of the investment opportunity in ACRX stands in stark contrast to the growing fundamental value of the shares (even under conservative commercial projections), especially given several near-term value-inflection milestones. Critically, we believe ACRX continues to trade substantially undervalued due to a misplaced association, attributed by many investors, to the ‘opioid crisis’ in the U.S. We believe this unfair taint on the company significantly discounts the shares as it ignores the core profile of both Dsuvia and Zalviso as acute, short-term analgesics provided only in medically-supervised settings (and with Dsuvia, administered only by a healthcare professional.”
TipRanks analytics demonstrate ACRX as a Buy. Out of 5 analysts polled by TipRanks in the last 3 months, 3 are bullish on AcelRX stock while 2 remain sidelined. With a return potential of 154%, the stock’s consensus target price stands at $7.38.
https://www.smarteranalyst.com/2017/08/07/irrational-opioid-crisis-volatility-nipping-acelrx-pharmaceuticals-inc-acrx-presents-stellar-entry-point-h-c-wainwright/
Roth Capital analyst Michael Higgins doesn't like Zalviso's chances for approval even though it is approved in Europe. I disagree.
At any rate, Higgins reiterated his buy rating due to Dsuvia which has an October 12th PDUFA date. Higgins has set a price target of $12.50 on ACRX. Dsuvia is the biggie with ACRX estimating sales potential of $1.1 billion in the U.S. alone.
AcelRx Pharmaceuticals Inc (ACRX) Could Face Opioid Heat from FDA with Zalviso, Worries Roth Capital
Julie Lamb, Editor-August 2, 2017, 10:31 AM EDT
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AcelRx Pharmaceuticals Inc (NASDAQ:ACRX) investors are quaking today in the upshot of earnings not so far off the mark from second quarter expectations. What then is the issue that is sending shares diving almost 14% today?
The firm’s drug Zalviso, approved in the EU to treat moderate-to-severe acute pain in a hospital setting released top-line results following the Complete Response Letter (CRL) it received in its Phase 3 trial, IAP312. True, the trial met statistical significance of device functionality over 72 hours, with merely 7 out of a pool of 320 patients noting a device error, but seven “misplaced” tablets were found by nurses among 6 of these patients. Under the protocol of the study, nurses were required to check every two hours for wayward pills.
Roth Capital Michael Higgins believes this does not bode well for ACRX even in the wake of EU post-approval, concerned that 14 months following the FDA issuing its CRL, “[…] the FDA’s heightened sensitivity to the opioid crisis is likely to prevent Zalviso’s approval.” In fact, Higgings anticipates “today’s FDA may have a problem” here, and asserts that this “overshadowed” earnings.
Therefore, sizing up the buying opportunity for the stock by placing “focus […] squarely on Dsuvia,” the firm’s other acute pain drug candidate, the analyst reiterates a Buy rating on ACRX while lowering the price target to $12.50, which represents a 328% increase from current levels.
“With FDA skating on thin ice, in our view, we believe Zalviso’s NDA as too heavy for the agency to bear,” contends Higgins, elaborating, “In our modeling we have dropped our probability of Zalviso’s U.S. approval from 25% to 0%. We suspect the FDA will review Study IAP312 (4Q’17 NDA filing, six month review) with the uneasy awareness that anyone at any age can discover sufentanil NanoTabs in the post-op patients’ bed sheets or on the floor. While the rate is very low (0.1% of dispensed tablets), we have not found any.”
“We believe Zalviso’s 2015 CRL has been anchoring a cloud over ACRX shares, as investor attention on Dsuvia has been slow to develop,” surmises the analyst. Moving forward, Dsuvia’s PDUFA is set for October 12th.
TipRanks analytics indicate ACRX as a Buy. Based on 5 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on AcelRX stock while 2 maintain a Hold. The 12-month average price target stands at $8.00, marking a 135% upside from where the stock is currently trading.
News Release
AcelRx Pharmaceuticals to Hold a Conference Call and Webcast on Tuesday, August 1st to Discuss ZALVISO Phase 3 Top-line Data and Quarterly Financial Results
REDWOOD CITY, Calif., July 31, 2017 /PRNewswire/ -- AcelRx Pharmaceuticals, Inc. (Nasdaq: ACRX), (AcelRx), a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of moderate-to-severe acute pain, today announced that it will hold an investment-community conference call on Tuesday, August 1, 2017 at 8:30 am Eastern Time (5:30 am Pacific Time) to discuss top-line results from the IAP312 study. IAP312 was a Phase 3 study in which hospitalized, post-operative patients self-administered 15 microgram sufentanil sublingual tablets using ZALVISO® (sufentanil sublingual tablet system) as often as once every 20 minutes to manage their moderate-to-severe acute pain. The company also plans to discuss its financial results for the three and six months ended June 30, 2017.
China factory surprise lifts copper price to 3-month high
http://www.mining.com/china-factory-surprise-lifts-copper-price-3-month-high/?utm_source=digest-en-mining-170630&utm_medium=email&utm_campaign=digest
Equal amount of Platinum and Palladium -
The mineralization is characterized by its very large vertical thicknesses of high-grade mineralization and a platinum-to-palladium ratio of approximately 1:1, which is significantly higher than average for the Bushveld’s Northern Limb. The 2.0 g/t 3PE+Au grade shell used to constrain UMT-TCU mineralization in the area where Indicated Mineral Resources are declared has an average true thickness of approximately 19 metres, compared with approximately 0.4 to 1.5 metres for a typical Merensky Reef intersection of the Bushveld’s Western and Eastern limbs, as illustrated in Figure 3
https://www.ivanhoemines.com/news/2016/ivanhoe-mines-reports-an-increase-in-indicated-mineral-resources-of-58-and-also-an-accompanying-increase-in-inferred-mineral/
Rick Rule is very bullish on Ivanhoe in this presentation -
http://click2.moneymappress.com/t/CA/pdA/9Jk/kSo/mYE/MTM2MjA3OXxodHRwczovL3Byby5tb25leW1hcHByZXNzLmNvbS9tLzY5MDkwMj9lbWFpbD1KQkpVUlNUUk9NJTQwbGl2ZS5jb20mYW1wO3NyYz1kMSZhPTgmbz00MjQ0OCZzPTYyNjE3JnU9MzcxNjImbD0xMzYyMDc5JnI9TUMyJnZpZD10VHdoMjUmZz0w./AQ/2oLz
China trade numbers for May are much better than April numbers -
http://www.cnbc.com/2017/06/08/reuters-america-metals-london-copper-rises-to-one-week-high-as-china-trade-gains.html
http://www.reuters.com/article/us-china-economy-trade-copper-idUSKBN18J0X6
I asked Bill Trenaman (Ivanhoe IR) if Ivanhoe was looking into this new technology for Platreef -
http://www.miningweekly.com/article/new-cost-slashing-platinum-technology-gaining-impressive-momentum-2017-05-18
Bill forwarded my question to Ivanhoe's technical/process engineers in South Africa. Their response -
We sent a sample to Australia to have amenability test work carried out on Kell. Results proved as expected that it was amenable to Kell on lab scale. The next step is to send a further 10Kgs for further testing. We have put this on the back burner while we complete the FS on Phase 1, but intend to follow up after FS completion as we look to the long term.
I sent an email to IR asking if this new tech will be incorporated in the upcoming Platreef feasibility study.
Also, I asked for RF's thoughts on the new process.
Bill said he will check it out with the technical team/process engineers in South Africa and let me know what they think.
This should be great news for Ivanhoe's Platreef Project -
New cost-slashing platinum technology gaining impressive momentum
http://www.miningweekly.com/article/new-cost-slashing-platinum-technology-gaining-impressive-momentum-2017-05-18
We have a lot of significant catalysts to look forward to in the short term -
From 4/10/17 PR -
Assay results for holes DD1138 and DD1144 are expected in approximately two to three weeks.
The continuing drilling successes mean that the Kakula Discovery has grown to become approximately 6.8 kilometres longer than the deposit’s 4.1-kilometre strike length that was used to calculate the initial Kakula resource estimate in October 2016. A new resource estimate for the eastern section of Kakula, covering a strike length of approximately 6.3 kilometres, is expected to be ready in May 2017.
https://ivanhoemines.com/news/2017/assays-confirm-kakula-west-high-grade-copper-discovery/
Highlights From the 2017 BMO Global Metals & Mining Conference -
Bottom Line: Robert Friedland, Executive Chairman and Founder of Ivanhoe Mines, presented at the 2017 BMO Capital Markets Global Metals & Mining Conference in Hollywood, Florida. The company continues to aggressively advance its three world- class African assets with significant catalysts at each in Q2/17.
Key Points
The flagship Kakula/Kamoa copper deposits - 5 km apart - remain the most visible value contributors for investors. Combined, the two mines are clearly among the top mineral discoveries globally in size, grade, and potential production capacity. Near- term catalysts for Kakula/Kamoa:
Early Q2 Kakula resource update followed by an updated PEA. In line with previous disclosure, Ivanhoe indicated the PEA will consider 6-8Mtpa operations each from Kakula and Komoa, compared to 4Mtpa in the last PEA and our assumed 8Mtpa.
A key takeaway from the presentation suggested Kakula could deliver 8% copper head-grade in early production years with a LOM average of about 6.5% copper.
Ongoing extension drilling at Kakula to expand on the 1.6km step-out (40% strike increase to the northwest) announced January 23. 12 rigs are drilling at Kakula with maps suggesting planned step-outs a further 2km away. The presentation also highlighted additional drilling is testing extensions to the southeast.
In response to a question from the audience regarding the geological controls at Kakula, management responded that they have a very good understanding of the controls and where to test for new mineralized zones within the current property.
At Kipushi, Ivanhoe has dewatered the workings down to production levels and we expect a Kipushi pre-feasibility in early Q2/17 delivering likely capex savings over the May 2016 PEA.
Platreef shaft sinking has reached 250m of a planned 975m with advance rates currently 50 meters per month. Late 2017 should see production Shaft 2 begin sinking with the shaft contract award expected shortly.
A Platreef feasibility in early Q2/17 will focus on management of grade scheduling, moving higher grades as well as thicker areas of mineralization to the front of the mine plan to increase early mine life margins and reduce development requirements.
Read more at http://www.stockhouse.com/companies/bullboard?symbol=ivn&postid=25905929#sj2loPhUaQ980jXz.99
I love it that Robert Friedland, his management team, and perhaps the best exploration team in the business are all working for us!
Miners told to move DRC HQs
http://www.miningweekly.com/article/miners-told-to-move-congo-hqs-as-provinces-compete-for-revenue-2017-04-25
Miners told to move DRC HQs as provinces compete for revenue
25th April 2017
By: Bloomberg
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LUBUMBASHI – The Democratic Republic of Congo (DRC) told local units of Glencore, China Molybdenum, Ivanhoe Mines and four other mining companies to relocate their head offices as newly demarcated provinces fight over tax revenue and control of mineral projects.
The companies, all headquartered in Lubumbashi, the capital of Haut-Katanga province, must move to Kolwezi town in neighbouring Lualaba, where their mines are based, Mines Minister Martin Kabwelulu said in an April 14 letter, a copy of which was seen by Bloomberg and confirmed by the Ministry.
“The objective is to move the administration of these companies closer to where they mine and consolidate the decentralisation process by building stronger relationships between the mining companies and the relevant provincial authorities,” Kabwelulu’s chief of staff, Valery Mukasa, said by phone from the national capital, Kinshasa.
Congo was divided into 26 administrative regions from 11 in July 2015, as part of a decentralisation drive stipulated in the 2006 constitution to strengthen local government across the sprawling central African country, which is about the size of western Europe. While governors were elected for each territory in 2016, other aspects are lagging behind, with many new regions lacking the infrastructure, revenue and human resources to staff and run a provincial administration.
Congo’s former Katanga province, Africa’s biggest copper producer and the world’s largest source of cobalt, was divided into four new regions, including Lualaba province, where most of the country’s biggest mines are now located.
GOVERNOR REMOVED
The Mines Minister’s instruction came four days before Haut-Katanga Governor Jean-Claude Musonda Kazembe was removed by the provincial assembly in Lubumbashi. The Parliament cited mismanagement of public funds that may have included a $27-million tax payment made by Glencore’s unit, Mutanda Mining, after the Swiss trader bought out Israeli billionaire Dan Gertler.
While the mine is in Lualaba province, the payment – a 3% duty on the $922-million share sale – was paid to Haut-Katanga based on the location of the company’s headquarters, in accordance with provincial regulations. That sparked a battle between the provinces for control of the money.
“The amount paid was for stamp duty related to the recent Mutanda transaction and was in accordance with instructions received from both the central and local governments,” Glencore said in an emailed response to questions. There is no suggestion of wrongdoing by Glencore in relation to the tax payment. Glencore declined to comment on the instruction to relocate the headquarters of their Mutanda and Kamoto Copper mining projects.
TAX PAYMENTS
The deputy head of the provincial assembly, Aerts Joseph Kayumba, said the body had voted to remove Kazembe because of his mismanagement of the provincial government.
His management of the $27-million tax payment from Mutanda is yet to be referred to the provincial assembly, but the body’s economic and financial commission will immediately begin an audit of Kazembe’s government, Kayumba said by phone from Lubumbashi. Kazembe didn’t respond to two phone calls and a text message seeking comment.
Kabwelulu said in the letter asking companies to move that he was acting after recommendations made by Lualaba’s governor, Richard Muyej. Muyej didn’t answer two calls to his mobile phone seeking comment.
A spokesperson for China Molybdenum, whose Tenke Fungurume Mining was asked to move, declined to comment. Ivanhoe Mines, which owns Kamoa Copper, didn’t immediately respond to requests for comment.
Friedland sees copper ‘nightmare’
In a keynote address at Mines and Money Asia in Hong Kong yesterday, Friedland said while global warming remained a contentious debate, air pollution was a crisis that needed an immediate solution.
“It’s going to have a wicked effect on some raw materials,” he said. He spoke of a “mushrooming mindset” in Europe and North America regarding the movement to electric vehicles.
“The transformation of the auto industry in the next 20 years will be the most significant transformation of our time,” Friedland said.
“But it’s in China where we’re going to have the biggest disruption.” Friedland said anyone who didn’t believe the Chinese government’s pledge to return to blue skys was an “idiot”.
“The era of electric vehicles is dawning,” he said.
“This change is coming at you so fast – the only reason you don’t know about it is that the mining industry is populated by stupid people like me.”
Friedland said if one in 10 Chinese cars switched to hydrogen fuel cell cars, global platinum production would need to double to meet demand.
“But there’s only one commodity that benefits from the evolution of technology,” he said. “Copper.”
Friedland believes copper demand will soar due to its widespread use in new technology and the lack of discoveries.
“Don’t worry about the copper price today,” he said. “You’re really going to feel it bite you on the derriere by 2021.
“You’re going to need a telescope to see the copper price in 2021!”
Friedland said to meet demand, copper production would need to double and it “ain’t gonna happen”.
And declining grades and reserves are only going to exacerbate the problem.
“Most copper mines today are like little old ladies waiting in bed to die,” Friedland said.
Even if no new technology was adopted, Friedland said there still wouldn’t be enough copper.
“This is a nightmare coming soon to a theatre near you,” he said.
“New technology is wildly copper intensive. Copper will be the most valuable of all metals.”
http://www.venturexresources.com/wp-content/uploads/2017/04/170406-MiningNews-Friedland-sees-copper.pdf
Ivanplats to Begin Early-Works Construction for Shaft 2 at the Platreef Platinum-Group Metals, Nickel, Copper and Gold Mine in South Africa
Shaft 2 to be Platreef's main production shaft with a hoisting capacity of six million tonnes a year.
http://www.marketwired.com/press-release/ivanplats-begin-early-works-construction-shaft-2-platreef-platinum-group-metals-nickel-tsx-ivn-2209293.htm
Assays Confirm Kakula West High-Grade Copper Discovery
Kakula West discovery hole DD1124 intersects 5.83% copper over 8.86 metres at a 2.5% cut-off, including a 6.14-metre interval at 6.84% copper Two new step-out holes at Kakula West extend length of copper-rich mineralized system at Kakula by another 800 metres to a total of approximately 11 kilometres 14 drill rigs continuing to expand and delineate the Kakula Discovery
KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO--(Marketwired - April 10, 2017) - Ivanhoe Mines (TSX:IVN)(OTCQX:IVPAF) Executive Chairman Robert Friedland and Chief Executive Officer Lars-Eric Johansson announced today that assays received for Kakula West discovery hole DD1124 have verified a high-grade interval of 5.83% copper over 8.86 metres at a 2.5% cut-off, including a 6.17-metre interval of 6.84% copper.
The assay results confirm that Kakula West is another high-grade copper discovery on the company's Tier One Kamoa-Kakula copper project in the Democratic Republic of Congo (DRC). The results further reinforce the exceptional continuity of high-grade copper mineralization at Kakula along the strike of the well-mineralized trend. DD1124 was drilled 3.8 kilometres west of the current limit of resource delineation drilling on the central section of Kakula.
Mr. Friedland and Mr. Johansson also announced today that two new step-out holes at Kakula West - DD1138 and DD1144, drilled 400 and 800 metres respectively west of hole DD1124 and along the strike of the mineralized trend - also have intersected relatively shallow, Kakula-style, chalcocite-rich copper mineralization.
Holes DD1138 and DD1144 have further extended the overall length of the known copper-rich mineralized system at Kakula by another 800 metres, to a total of approximately 11 kilometres. The mineralization encountered in DD1138 and DD1144 is similar to the mineralization intersected in earlier drilling into the high-grade core of the Kakula Discovery, which is approximately 10 kilometres to the east.
"We're thrilled with initial drilling results at Kakula West," said Mr. Friedland.
"This area is quickly emerging as a near-surface source of high-grade copper mineralization that could be incorporated into the early years of the Kamoa-Kakula mine plan. Given the associated economic upside of such a scenario, we plan to aggressively delineate the full extent of the mineralization at Kakula West."
Highlights of Kakula West drilling to date include:
Assays show that DD1124 intersected 8.86 metres (true width) of 5.83% copper at a 3.0% copper cut-off, beginning at a downhole depth of 428.70 metres; 8.86 metres (true width) of 5.83% copper at a 2.5% copper cut-off; 16.05 metres (true width) of 4.14% copper at a 2.0% copper cut-off; and 16.05 metres (true width) of 4.14% copper at a 1.0% copper cut-off. DD1124's best six-metre intercept was 6.17 metres (true width) at 6.84% copper. Figure 7 shows a strip log of DD1124 with assay grades and composites. Table 1 shows assay grades for DD1124 at a range of cut-offs.
DD1138, drilled 400 metres west of DD1124, intersected a zone of moderate-to-strong chalcocite mineralization six to seven metres thick, beginning at a downhole depth of 565.5 metres. Mineralization is hosted in a laminated siltstone horizon, typical of Kakula-style mineralization seen elsewhere at Kakula. The siltstone was separated from the Roan footwall sandstone by a sandy diamictite unit (see geology log and pictures of core in Figure 8).
DD1144, drilled 800 metres west of DD1124, intersected similar geology and mineralization to DD1138 with approximately ten metres of moderate chalcocite mineralization, including more strongly mineralized zones starting at a downhole depth of 502 metres and hosted in a laminated siltstone unit (see geology log and pictures of core in Figure 9).
Assay results for holes DD1138 and DD1144 are expected in approximately two to three weeks.
The continuing drilling successes mean that the Kakula Discovery has grown to become approximately 6.8 kilometres longer than the deposit's 4.1-kilometre strike length that was used to calculate the initial Kakula resource estimate in October 2016. A new resource estimate for the eastern section of Kakula, covering a strike length of approximately 6.3 kilometres, is expected to be ready in May 2017.
The Kamoa-Kakula Project, a joint venture between Ivanhoe Mines, Zijin Mining and the DRC government, is near the mining centre of Kolwezi on the Central African Copperbelt in the DRC.
14 drill rigs rapidly expanding the Kakula Discovery; testing to begin soon on high-priority satellite drill targets
Fourteen rigs are drilling at Kakula. Three rigs are extending the Kakula West discovery area; one is working in the far southeastern area of Kakula; six are extending resources at the northwestern extent of the inferred resource area; two are drilling infill holes close to the centre of Kakula; and two are drilling wedge holes for metallurgical testwork in the Kakula Indicated Resource area (see figures 1 and 2). More than 69,000 metres have been drilled at Kakula since May 2016. The Kakula Discovery remains open along a westerly-southeasterly strike (see Figure 2).
Mr. Friedland said that rigs will be reallocated to Kakula West and other high-priority exploration targets elsewhere on the approximately 400-square-kilometre Kamoa-Kakula Project once the resource delineation drilling is completed at the eastern section of the Kakula Deposit.
"With the approaching onset of the dry season in the DRC, we also will have the ability to move the rigs to exploration targets that were not accessible during the rainy season. We believe there is excellent geological potential to make other Kakula-type discoveries in the area," he added.
Strategic discussions continuing with potential partners
Mr. Friedland also noted that strategic discussions concerning Ivanhoe Mines and its projects are continuing with several significant mining companies and investors across Asia, Europe, Africa and elsewhere. Several investors that have expressed interest have no material limit on the provision of capital. There can be no assurance that the company will pursue any transaction or that a transaction, if pursued, will be completed.
Given the substantial increase in investor interest following the remarkable growth of the Kakula Discovery, the company has increased the frequency of organized visits for investors and banking analysts to its three mine development projects, including the massive exploration program at Kakula.
Mr. Johansson said it is important for analysts and investors to gain a first-hand understanding of the progress being made at all of Ivanhoe's projects and the scale of the Kakula Discovery. A group of analysts completed a visit last week; the next scheduled visit to the sites is May 18 to 21. Ivanhoe and Zijin Mining will host a one-day tour of the Kamoa-Kakula Project on June 22 for some of the delegates to the DRC Mining Conference in Lubumbashi.
Figure 1. Kamoa-Kakula mining licence, showing copper grade of Indicated and Inferred Resources at a 2% copper cut-off, untested areas, current target areas and location of Kakula West Discovery: http://media3.marketwire.com/docs/1091382-F1.pdf
Figure 2. Drilling map of the Kakula Discovery, showing locations of discovery hole DD1124 at Kakula West, more than three kilometres away from the western-most Kakula resource hole, and the two new 400-metre step-out holes, DD1138 and DD1144: http://media3.marketwire.com/docs/1091382-F2.pdf
Figure 3. View to west from above the current northwestern limit of the Kakula Discovery, showing locations of discovery hole DD1124 at Kakula West and the two new 400-metre step-out holes, DD1138 and DD1144: http://media3.marketwire.com/docs/1091382-F3.pdf
Figure 4. View to west, showing two drilling rigs at the Kakula Discovery: http://media3.marketwire.com/docs/1091382-F4.pdf ;
Figure 5. Section along the axis on the Kakula Deposit on the section A - A'- A" - B showing drilling completed to date and composites at a 3.0% copper cut-off: http://media3.marketwire.com/docs/1091382-F5.pdf
Figure 6. Kakula West drilling map showing completed and planned holes, including discovery hole DD1124 and step-out holes DD1138 and DD1144: http://media3.marketwire.com/docs/1091382Figure6.jpg
Exploration drilling is ongoing over a wide area at Kakula West to establish the geometry of the well-mineralized zone. Assays were received for a second hole, DD1117, drilled 500 metres northeast of DD1124. DD1117 intersected 2.94 metres (true width) of 2.95% copper, at a 3.0% cut-off, from a downhole depth of 491.18 metres, and 3.61 metres of 2.60% copper, at a 1.0% cut-off. This hole may define the northern edge of the strong copper mineralization as it trends west-southwest, although it is important that mineralization in DD1117 is associated with a 17-metre thick siltstone unit, suggesting the prospectivity of this northern zone remains high.
Figure 7. Strip-log of drill hole DD1124 showing high-grade copper assays and a typical Kakula-style mineralization profile: http://media3.marketwire.com/docs/1091382-F7.pdf
Figure 8. Strip-log of hole DD1138, showing a typical Kakula-style mineralization profile, and pictures of chalcocite-rich drill core: http://media3.marketwire.com/docs/1091382-F8.pdf
Figure 9. Strip-log of hole DD1144, showing a typical Kakula-style mineralization profile, and pictures of chalcocite-rich drill core: http://media3.marketwire.com/docs/1091382-F9.pdf
Table 1. Assay results received for Kakula West drill holes to April 7, 2017: http://media3.marketwire.com/docs/1091382-T1.pdf
Table 2. Collars for Kakula West drill holes completed to April 7, 2017: http://media3.marketwire.com/docs/1091382-T2.pdf
Qualified Person and Quality Control and Assurance
The scientific and technical information in this release has been reviewed and approved by Stephen Torr, P.Geo., Ivanhoe Mines' Vice President, Project Geology and Evaluation, and a Qualified Person under the terms of National Instrument 43-101. Mr. Torr has verified the technical data disclosed in this news release.
Ivanhoe Mines maintains a comprehensive chain of custody and QA-QC program on assays from its Kamoa-Kakula Project. Half-sawn core is processed at Kamoa-Kakula's on-site preparation laboratory and prepared samples then are shipped by secure courier to Bureau Veritas Minerals (BVM) Laboratories in Australia, an ISO17025-accredited facility. Copper assays are determined at BVM by mixed-acid digestion with ICP finish. Industry-standard certified reference materials and blanks are inserted into the sample stream prior to dispatch to BVM. For detailed information about assay methods and data verification measures used to support the scientific and technical information, please refer to the January 20, 2017 technical report on the Kamoa-Kakula Project titled "Kakula 2016 Preliminary Economic Assessment" on the SEDAR profile of Ivanhoe Mines at www.sedar.com and on the Ivanhoe Mines website at www.ivanhoemines.com.
About Ivanhoe Mines
Ivanhoe Mines is advancing its three principal projects in Sub-Saharan Africa: Mine development at the Platreef platinum-palladium-gold-nickel-copper discovery on the Northern Limb of South Africa's Bushveld Complex; mine development and exploration at the Kamoa-Kakula copper project on the Central African Copperbelt in the DRC; and upgrading at the historic, high-grade Kipushi zinc-copper-silver-germanium mine, also on the DRC's Copperbelt. For details, visit www.ivanhoemines.com.
New cost-slashing platinum technology ready to roll – Pallinghurst
http://www.miningweekly.com/article/new-cost-slashing-platinum-technology-ready-to-roll-pallinghurst-2017-03-31
Not only is the operating cost far cheaper, but so is the capital cost.
The plant at Sedibelo, which will have a capacity to process 300 000 oz of platinum group metals (PGMs) a year, is budgeted to come in at less than $100-million.
Kell processes upper group two (UG2) reef Merensky reef, platreef, Zimbabwe’s Great Dyke reef, North America’s polymetallic ore and even refractory gold.
The Platreef PGE Project -
https://www.miningreview.com/magazine_articles/developing-phenomenal-ore-body-ivanplats-platreef-project/
Unlike most typical, conventional mines on the Eastern and Western Bushveld Limbs, which are dominated by relatively narrow Merensky and UG2 reefs and negligible amounts of base metals, the Platreef ore body represents a dominant thick Merensky Reef and also contains a significant amount of base metals – specifically over 0.3% nickel and 0.15% copper. “Selling these two metals in the volumes we expect to produce could ultimately pay for the entire operation, meaning all our mined PGEs could potentially be profit.”
In order to manage capital outlay to establish what could be the world’s largest PGE mine, the plan is to build the megamine in phases. At an initial 4 Mtpa or 433 000 4E ozpa, Platreef would already be ranked as the third largest PGE mine in the world.
Ivanhoe may be able to build a plant to process their targeted 433,000 ozpa for less than $150 million. Perhaps, IVN will go to 6 Mtpa or 8 Mtpa to start with.
Big boost for platinum as world's mayors tackle urban air pollution
http://www.miningweekly.com/article/big-boost-for-platinum-as-mayors-of-worlds-biggest-cities-tackle-urban-air-pollution-2017-03-30/rep_id:3650
Bernstein's Paul Gait - Ivanhoe: How the true economic value of the world's most important copper project could be closer to C$30
http://cdn.ceo.ca.s3-us-west-2.amazonaws.com/1cdqngn-2017-03-30%20Bernstein%20Research%20%28Summary%29.pdf
World's third-largest platinum producer has costs of $965/oz.
Platreef Project's costs projected to be $322/oz! What a great project!
http://www.miningweekly.com/article/minings-biggest-loser-lonmin-is-burning-cash-to-stay-alive-2017-03-17
JOHANNESBURG – For most of the mining industry, 2017 is turning out to be another good year. The big exception is Lonmin Plc.
Investors are losing confidence in the world’s third-largest platinum producer as it burns through cash to stay afloat, just 15 months after raising about $400-million from shareholders. Platinum prices aren’t far from a seven-year low and Lonmin has its own set of operational problems, including higher costs and lower output at its biggest mining shaft.
The stock is down more than 30% in 2017, the most in the FTSE All-Share Basic Materials Index of 28 commodity producers. The overall index has gained 11% this year.
“Lonmin can’t survive in its current form unless there’s a very significant recovery in platinum-group metal prices,” said Marc Elliott, a London-based analyst at Investec Plc with a sell rating on the stock. “I wouldn’t be surprised to see them come back to the market for more cash in the next two to three years.”
Other mining companies are looking to deploy new cash into dividends and acquisitions, buoyed by a recovery in commodity prices and deep cost cuts. Lonmin stands out for its years of problems. The company used up 70% of its net cash last quarter, leaving it with $49-million, although it can draw on $414-million, mainly through credit lines from banks.
CEO Ben Magara has pushed to get Lonmin back on track and repair its reputation after the shootings at Marikana in 2012, when police killed protesting mineworkers. But it hasn’t been enough. The company has raised about $1.7-billion from shareholders in the past eight years yet its current market value is about $330-million.
The problem is simple: Lonmin’s costs exceed revenue. Each ounce of platinum-group metal costs R12 296 ($965) to produce, compared with a sale price of R10 372/oz in the three months through December.
Lonmin said capital spending is usually higher at the end of the year and sales are weighted toward the middle quarters. But the problem isn’t new. Free cash flow has been negative each year since 2011, according to data compiled by Bloomberg.
“We see cash burn ad infinitum at current PGM prices, and at some point they’ll need to find more financing again,” said Edward Sterck, a London-based analyst at BMO Capital Markets. “Management is doing a good job with challenging assets, but there doesn’t seem to be a Plan B. Plan A is for commodity prices to recover in rand terms and that’s it.”
With demand growing for electric cars, which unlike conventional vehicles don’t use platinum, there’s no certainty that prices will pick up soon. Platinum declined 0.2% to 955.64 an ounce, while Lonmin rose 5.1% to R15.55 a share at 9:42 a.m. in Johannesburg.
Operational performance is another problem for Lonmin, which mainly has deep, labor-intensive mines. First-quarter production at K3 shaft, the company’s biggest, dropped 14% due to safety stoppages, union disputes and absenteeism. In February, a worker died in an accident at the shaft.
COO Ben Moolman resigned in March after less than two years in the role. Previous COO Johan Viljoen held the job for under a year.
“C-level resignations at Lonmin have in the past presaged bad news, so COO Ben Moolman’s resignation - ostensibly ‘for personal reasons’ - is not an encouraging sign,” Yuen Low, a London-based analyst at Shore Capital Stockbrokers, wrote in a report.
CEO Magara has temporarily taken over the COO role, having had extensive operations experience at Anglo American Plc’s coal and platinum divisions, spokeswoman Wendy Tlou said in response to questions.
“We have seen the upward trajectory of our production efforts in the past month from last quarter’s disappointing production results,” she said.
JOB CUTS
Magara, a Zimbabwean national, has tried to arrest Lonmin’s decline since taking the CEO job in 2013. He cut 6 000 jobs, or 15%, in the past two years, closed high-cost mining areas and reduced capital expenditure to save cash. In November, Lonmin bought Anglo American Platinum’s stake in Pandora, a mine near its Saffy shaft, in a deal that Magara said would save R2-billion of capital spending over the next five years.
Magara is also looking to produce more low-cost metal from waste dumps and has the option of shifting mining crews to ore-bearing areas instead of developing corridors for future production. Still, some investors are increasing bets Lonmin shares have further to fall. About 7% of the company has been sold short, the highest since the December 2015 rights issue, data compiled by Markit show.
What the company really needs is a rally in platinum prices, according to Investec’s Elliott. “We currently don’t anticipate that will happen any time soon,” he said"
This SA article gives a good breakdown on what is contained in Platreef, Kipushi, and Kamoa as of 9/8/16. Platreef and Kipushi totals have not changed. Kakula has been added since the article and Ivanhoe now owns 39.5% of Kamoa/Kakula instead of 47.5%. The current totals for Kakula can be found in the press releases.
http://seekingalpha.com/article/4004834-ivanhoe-mines-became-billion-dollar-company
Zinc - 9.3 billion pounds @ today's price of $1.25/lb = $11,625,000,000 x .68 ownership = $7,905,000,000
Platinum - 41.83 million toz platinum @ today's price of $960/oz = $40,157,000,000 x .64 ownership = $25,700,000,000
Palladium - 42.72 million toz palladium @ today's price of $770/oz = $32,894,000,000 x .64 ownership = $21,052,000,000
Copper - Kamoa only - 52.9 billion pounds @ today's price of $2.68/lb = $141,772,000,000 x .395 ownership = $56,000,000,000
From the article you'll see that all of these metals are mixed with other metals that add value.
Yahoo shows major holders here -
https://finance.yahoo.com/quote/IVPAF/holders?p=IVPAF
They show Fidelity with ~45,000,000 shares. We know from the filing that Fidelity has ~85,000,000 shares. So, not up to date.
IVPAF (IVN.TO), another miner that has been beat up lately. Although, share price rebounded some on Friday. Possibly due to this -
Excerpts from report on SEDAR dated MArch 10, 2017:
The transaction that triggered the requirement to file this report was the purchase of 1,374,200 Class A Common Shares of Ivanhoe Mines Ltd. that occurred on February 15, 2017.
This is Fidelity’s initial filing above 10% or Fidelity’s security holding percentage, as at
the end of the month, increased to 10% or more.
Fidelity holds 85,642,869 Class A Common Shares representing approximately 10.96% of the outstanding shares of that class.
Read more at http://www.stockhouse.com/companies/bullboard?symbol=t.ivn&postid=25968470#I3JQbG5i5koFzB1P.99
Ivanhoe is developing 3 mega projects.
1) Platreef Project - https://www.miningreview.com/magazine_articles/developing-phenomenal-ore-body-ivanplats-platreef-project/
2) Kamoa/Kakula Project. The 12/15/16 Kakula cc -
https://www.dropbox.com/s/dr0anm4njyzp65d/2016-12-15%20Kakula%20PEA%20conference%20call%20recording.m4a?dl=0
Partial transcript of the call. Robert Friedland, Canadian Mining Hall of Fame member speaking -
On the Kakula Copper Strike
Robert Friedland, Executive Chairman of Ivanhoe Mines Ltd.
15 December 2016
Wow. Thank you, gentlemen, and I want to thank all the participants on this holiday season call.
After twenty-one years of incredibly hard work by hundreds of very talented people, arguably the
very best in the industry, our company is about to be an overnight success.
Now, we found Kamoa a number of years ago, and David Broughton and his team won a number
of the highest awards you can get in geology for that discovery, and we drilled it to a point where
it's 27 kilometres long and 10 kilometres wide – and you can't blame us for continuing to drill
that enormous blue whale to see how big it was. It's kind of hard to go to a new area 5 kilometres
away, where even now if we go up to Kamoa and drill the edges, it gets bigger. But we found
some very interesting early geology at Kakula. Now, in the mean time, we designed a 4 million
tonne a year mine at Kamoa and I am going to tell you how rapidly the situation has evolved and
in a very real sense, and only half tongue-in-cheek, this 25 page press release we have just made
for building a 4 million-, and then an immediate extension 8 million tonne a year mine, is
obsolete even before the ink is dry. I want to explain how this happened and where we're
headed.
Now, we had a bear market, and availability of capital was very low. We had pundits and
observers thinking we were going to issue billions of shares of stock diluting ourselves in the
development of three simultaneous world class assets. And so we said, well, let's see how small
we can make the capital investment in Kamoa at only 4 million tonnes a year – actually, we we
just started out thinking about 3 million tonnes a year, and then we realised the capital cost was
almost the same at 4 million – and we cooked up a plan for an excellent mine that could be
financed at the bottom of the cycle at 4 million tonnes a year. We developed the detailed
engineering and we announced it, and then we started charging ahead to pre-feasibility and
feasibility study in much more detail.
And then the discovery occurred at Kakula: first a few holes, and then just an overwhelming
discovery of an unbelievably rich and disruptive ore body. So, we started moving drill rigs down
there, we had to build a road to get down there. It's only 5 or 6 kilometres away. And we started
drilling and in 6 months we drilled out this monster that remains open. And we've now
announced 60 to 100 million tonnes: if you look at the indicated category and add the inferred in
this extremely continuous deposit, something on the order of 60 million tonnes, 80 million
tonnes, 100 million tonnes of plus-6% material, very shallow. And so we thought, well, let's see
what happens if we move that 4 million tonne mine, as designed, to Kakula. And the result was
lower capital, less capital in terms of economic development, because of the thickness and the
consistency, higher metallurgical recoveries, higher-grade concentrate, which reduces shipping
costs and realisation costs – and in short, a real world beater. And then we thought, well, what if
we build that one and then just build the original idea, the 4 million tonnes at Kamoa, a total of
8 million tonnes, all out of the first little billion dollars. One billion dollars: ladies and
gentlemen, it isn't what it used to be; Oyu Tolgoi is taking 13 billion so far, and before the district
is fully developed up to 350 thousand tonnes a day, at least 25 billion of capital will go into Oyu
Tolgoi. And the expansion underground for Grasberg has roughly a 25 billion dollar budget.
We're talking about one measly little billion dollars, of which our partners from Zijin came in to
provide 65 percent of the capital by debt, and our share of the capital, 175 million bucks, we have
that money in our pocket now, and more.
So we started designing this billion dollar unit to be comfortable. Now we've taken a hard look at
the ongoing drilling, and we will announce, in the first quarter, the results of that ongoing
drilling. But it's blatantly obvious, and we have now disclosed, that we're going to look at Kakula
at 8 million tonnes a year to start, and maybe even higher, maybe 10 million tonnes a year to
start. And it will generate ridiculous cash flows.
If you're making a 38 percent rate of return, 38 percent IRR, and cost of capital out of Asia, for a
Japanese company, where they are experiencing nearly negative rates of interest, you have access to cheap capital. And now that sentiment in the mining market has turned – in fact, Goldman Sachs, who is professionally short the copper market (probably talking their book, I might add), now that they've covered their short position at a massive loss for their clients, has turned around and become a bull on copper – so all of a sudden there's enormous capital flows interested in seeing what this resource can do and how big it can get. So, that 25 pages of information is very material to a mining analyst, it's very material to the people with whom we are engaged in strategic discussions, but I am happy to tell you it's already obsolete. We are now talking to potential sources of capital, in Europe, in Africa, in Asia, and in the Middle East, that have no material limitation on capital, and what we are being asked is, “well, how big can you make this thing? How fast can you make it big? What's the ultimate size?” And the mineralisation is now a blanket stretching about 27 kilometres further north, 5, 6, 7 kilometres at Kakula – you know, we're getting on 35 kilometres of strike. It's like a flat-lying blanket. How many holes would you like to poke in it? Would you like to put in 2 billion of capital?
Take a look at Las Bambas. My Chinese friends have 9 billion dollars dedicated to Las Bambas,
and that's a lot. And that's supposed to get them to 350 thousand tonnes a year. Well, our first
billion gets you to a peak of 347 thousand tonnes a year, and I am confident that the quality of
the concentrate is better, the access to market, all the factors. So, we're not at a high elevation;
we're on flat land. Water is not an issue in the Congo. The Congo River is the second largest
source of fresh water in the world after the Amazon.
So what we're doing now is we're going to expand the drilling. And we have the most intensive
interest in the affairs of this company that I have experienced since Voisey's Bay. And, in fact, I
would go so far to say, that if you have a 4.7 billion dollar net present value, at an 8 percent
interest rate, in these little baby mines, imagine what the NPV could be when we go to 8 million,
12 million, 16 million, perhaps 20 million tonnes a year. This is going to be either the second
largest copper mine in the world, or the largest. And it's going to pump out massive cash flows,
to the benefit of the Congolese people, who are now a partner in the project, and to all of our
stakeholders, and to all of our end users of that metal who desperately need it to change the
miserable current state of the world.
Now, Lao Tse, the famous Chinese philosopher, said that the best fertiliser for a farm is the
footsteps of its owner. This morning we had a commentary in the Globe and Mail. It
was basically an attack on Don Lindsay, attacking him on the thesis that he was being paid too
much and that miners get paid too much, and that people that invest in mining companies are
hurt when management have stock options. Actually, when people have exposure to equity, they
work with Silicon Valley intensity, and if you want to make a comment about exposure to equity
and companies, the greatest growth companies in the world in Silicon Valley all have employees
where everybody is exposed to equity. The mining industry is very cyclical and you need to
attract the very best people on the planet if you're going to make the best discoveries on the
planet. So the people that we have at this company are the software. The people that we have at
this company are the guts of it. They're the heart. And when people say “how is this fellow
talking to you so lucky as to find so many of the world's largest mineral deposits?” I always
protest and say “it's not me! It's the strength and the depth and the intensity of the technical
management team that is moving mountains.”
Now Kakula, I can assure you, is growing every day, including today, and it's growing this week
and it's growing this month, and it's going to prove to be probably the most disruptive copper
discovery this century. It's already achieved that accolade on the African continent, but we've got
wider horizons in mind for comparison.
Now the problem is that the engineers and the third party QPs (the qualified persons) are
struggling to keep up with the scale of the growth of the asset, and our sudden availability of
extremely large amounts of capital. When you've got a lot of money, all your problems are
solved. Once a company like Barrick gets in the index and makes cash flow, any kind of problem
that occurs in mining can be resolved by just spending more capital, and if you've got a cost of
capital of 1 or 2 or 3 percent, and your IRR is 38 percent, you can expand a resource like this
infinitely. Net present value is an evaluation stick for idiots. The numbers that we've published
on an NPV8 means that if I sell you a mine for a billion dollars, after ten years, you have to sell it
back to me for one dollar, because with the magic of compounding interest, there's no value to
anything beyond year 10. And we're three years away from commercial production, plus or
minus, and so, just on that three year delay you're taking a 30 or 40 percent interest compounded
in the deduction of net present value; in other words, just by getting three years older, that 4.7
billion will be more like a 6 1/2 or 7 billion dollar NPV because the mills are turning.
So, we are going to access from strategic players a lot of capital. We are in a competitive process.
We are in the midst of it. We are concerned that this company be run on the very best
international corporate practice, and that the mines be run on the very best possible
environmental and social corporate practice in the world, because when you have a mine with
very broad shoulders and it generates fantastic cash flows, you've got the capital for community
development, and you're generating huge amounts of valued employment, and you can train
your employees. For example, we've invested hundreds and hundreds of millions of dollars in
training in Mongolia, in the Mongolian workforce, and Rio Tinto is now proud that the
Mongolian workforce has the highest productivity and the best safety record in the entire Rio
Tinto system, and those people were trained from scratch, because they didn't come to the mine
with any bad habits. So in short, this is truly a once in a lifetime discovery, and we are the Jedi
you're looking for.
Now, solar energy has just become cheaper than wind power, and Lars-Eric Johansson is on the
board of Canadian Solar, one of the largest solar energy companies in the world. All of their
components are made in China. Today, electricity, generated by solar, is dropping below 2 cents
a kilowatt hour. And this mine is also connected to existing hydro-electric capacity. We have our
foot on over 200 megawatts of hydro-electric power. The third element is vanadium redox
batteries for the storage of grid-scale electricity. We have flat land. There's an infinite amount of
solar energy we can generate. We control in an affiliated company a very powerful vanadium
redox battery company based in China that can build very large scale – grid-scale – batteries.
And if you have those batteries, in case you have low water in a hydro-electric dam, as First
Quantum recently experienced in Zambia, the solar energy and the batteries can store the energy
you need. If you have ample rainfall you can run the hydro-electricity as fast as possible and fill
up the batteries. So the combination of hydro-electric power, solar power, and vanadium redox
storage will make this the greenest mine in the world. And if you're a greenie and you want to
stop burning our Arab friends' hydrocarbons, if you campaign against the Athabasca oil sands or
don't like pipelines or don't like coal, you have to acquire our copper.
The Chinese state grid is the world's largest buyer of copper metal. They have to clean the air for
1.3 billion Chinese people. A deposit like this is in the national security interest of any of the
major powers.
So, we are extremely blessed to have no snow, no ice, easy access to markets, extremely high
grades, and the concentrate – no one has ever seen a mine producing over 50% of concentrate
grade. So there are tremendous amounts of additional value to be squeezed out of this asset with
the advancement of technology in the next ten years. Mining is going to undergo a complete
revolution in technology: the way we drill, the way we grind, the way we blast, the way we
produce metal. And what we do with the metal is going to rapidly change because the world is
moving to electric automobiles, and the world is moving to much cleaner ways to generate power
and this mine is going to sit at the heart of the world industrial transformation. You don't
believe me? Just watch. Wait till you see what happens. We've given you fair warning.
So the goal is to surpass this preliminary economic evaluation, 25 pages long, 8 million tonnes a
year, 1 billion of capital, 4.7 billion dollar NPV. We'd like to double it. We'd like to triple it.
Maybe in time, we can quadruple it. And we're talking to the most interesting companies in the
world to team up with us and achieve this task. You know, when you have extremely high grade –
no one pointed out that – your mill has a very small footprint. You use less cement, you use less
steel, you use less electricity, you use less of everything because it's very high grade! And so,
nothing can compete with this, and the only mining share I recommend you buy is something at
the very bottom of the world cost curve. Well, ladies and gentlemen, let me tell you, this mine
will be at the very bottom of the world cost curve. As David Broughton said, it's Lucifer to
everybody else contemplating building a copper mine, with no exceptions. And that's why
Voisey's Bay became so valuable. The people at Sudbury, Ontario: one group used to work for
Falconbridge and drink in one bar, and another group used to work for Inco and drink in another
bar, and if somebody got drunk and went to the wrong bar, they'd beat him half to death because
he came from the competing company. When we found Voisey's Bay, we made a deal with
Falconbridge – in fact, Don Lindsay, who now runs Teck, was my backer – and the people at Inco
just couldn't stomach the idea, and raised the bid by 1.7 billion dollars, because the greatest asset
is a profound enemy to the second best asset. And ain't anybody have a copper discovery like
this.
And, you know, our Chinese friends who are already in this project, we've known them for 25
years, they know how important this project is to China's economic, political and military
security. And our Chinese friends bring great stability in the Congo, and we think that any
perception of political risk is quite misplaced. Actually, when I take a good look at the president
of the United States, either the current one, or the next one, I'm not sure any of them knows
what they are going to even say about mining. I mean, you might get a tweet out the Donald any
second that could dramatically change the future of oil and gas or mining. We just don't know.
And who is going to be the next president? Are they going to reverse those policies? Will it be a
Democrat? We know that the Congo lives on copper mining. The Congo produced a million
tonnes of copper, approximately, for the last two years. Each year. It's the fastest growing source
of copper. The economy is growing at about 7 percent a year. This mining project can more than
double Congolese production to 2 million tonnes a year. It dwarfs total Canadian production
which is in inexorable decline.
So, we are going to move mountains in the new year. We are going to drill assiduously, and we
are going to increase the size of this resource, and we are going to scale up the project
accordingly. What we're trying to do here is, we're trying to make history. Making history is a lot
better than just making money. If you build the biggest and best new copper mine in the world,
all of our shareholders are going to make a ridiculous amount of money. But that's not as
important or as satisfying at my age as making history. So, the key thing is to uplift the lives of
the surrounding people in Katanga. To strengthen our social licence. The government in
Katanga has been an enormous supporter of our efforts. The people in Katanga were elated
when we restarted one of the hydro-electric power generation units that had been abandoned,
basically, for maintenance, since the Belgian colonial era. We are training the local people in
farming and agriculture and chicken husbandry. We have a honey factory. And we haven't even
made any money yet! When this mine makes money, with its broad shoulders, it's going to set
the industry standard for improving the lives of the neighbouring peoples.
Now, the world needs so much copper for electric cars, for power transformation, for solar energy
and for wind power, for nuclear power. If you want to stop burning coal, and if you want to stop
burning hydrocarbons, and if you want to eliminate urban air pollution, you need our copper.
And if 9 billion people that are soon to arrive on this planet are going to breathe clean air, you
need this copper.
And so I want all of you on this call to join hands with us, take a piece of the equity, and help us
make history, because we are going to do it. Thank you for your support.
3)Kipushi, From 11/28/16 cc. Robert Friedland speaking -
On Financing:
I think we can just tell you that great mines always get financed. That's rule number one. And I can also make the editorial observation that the wind is very clearly now at our backs. We used to be developing these assets with the wind blowing in our face. So we now have a favourable tail wind, to say the least. In fact, earlier today copper nearly touched $6,000 a tonne in London, and we don't think the rally's over yet. So it's fair to say, as we've said in the past, that we have been approached by numerous — primarily financial — investors, as well as international industry participants in all of our assets. So a lot of the capital cost to put Kipushi in production has already been borne; every day we're effectively putting the mine back in production. When we rebuild the winders and the shafts and the skips and the Maryannes and the underground development, we are essentially going ahead with the capital to redevelop the mine. So when we give you a new pre-feasibility study in the second quarter of 2017 we do expect the capital cost to be lower than it was a year or two ago by virtue of the fact that we are developing the mine now! It's essentially being redeveloped now.
On Corporate Activity:
So far as our alternatives are concerned, as we've indicated publicly in the past, they range from bankers and investors interested in us taking Kipushi public as a pure play on zinc, which could be done with or without our partner, Gecamines, through a joint venture, or a joint public listing with other parties, or do an outright and complete sale. If our shareholders think that that is an attractive thing to do we might go in that direction. We don't negotiate against ourselves in the media, and we don't negotiate in public. All we can tell you is that we are feeling better about our condition in the industry and in the evolution of these assets than we have ever felt in a twenty year period. We have never been as strong as we are today, and we've never felt that we had as many suitors that would like to marry us as we have this evening. So I'll just leave it at that. Thank you.
On Developments in the Zinc Market:
We've also seen a very significant reduction in transportation costs. So there's clearly a panic for zinc concentrate by the smelters. That's definitely the case, since we've had an incredible decline in the costs [treatment charges]. We've also seen an incredibly significant reduction in transport costs. So all the factors are now at the moment quite beneficial, with higher metals prices, greater interest from industry and financial people, and reduced treatment and transportation costs. So I hope you keep tuned to the second quarter of 2017 when the Big Zinc will nearly be back in production.
On Progress at the Big Zinc:
You can go up there and literally kiss the Big Zinc. When we bought the asset the mine was flooded, and the Big Zinc was sort of like the Loch Ness Monster: some people claimed to have seen it many times, but it was definitely under water. Now you can go down there and kiss Loch Ness Monster any time you like. We think an 80-metre-thick ore body with 35% zinc — with all the other metals, 42 or 43% equivalent — speaks for itself.
On Capital Savings:
We do think the capital cost is coming down. And how far is it coming down? Well, the more the better, actually. But as the price of the metal skyrockets - last time I checked it's up 70% since January 1 — we are less and less sensitive to capital costs. So we are looking at extremely attractive rates of return. Now, how good is extreme? Well, we'll let you know at the end of the second quarter when the numbers are independently audited.
On a Production Decision:
I think we've already made the decision to put the richest zinc deposit in the world into production. It's just that we can't give you the parameters around that decision without announcing an independent study. We've spoken to Chinese players who've said, "why are you even bothering to do a feasibility study on the richest zinc mine in the world?!" It's by definition richer than the other zinc deposits by a very wide margin, so by definition, it should be more economic, given that the capital has already been sunk. This is a brownfields restart, not a greenfields development. I think Kipushi is an asset that is not really understood by the mining industry. I think that the continued drilling down-dip, the scale of the potential resource, and the unique geologic setting reminds me of what Dr Murray Hinzman told me. Dr Hinzman is the head of the geology department at the Colorado School of Mines, and he made the remark that he thought that "the crack in the earth at Kipushi is the richest crack in the earth, period, full stop." It rivals any ore in the world. It's a lot more valuable per tonne than Voisey's Bay was, and you can go down and touch it.
Kamoa-Kakula
On Capital Commitments:
There are no particular capital commitments in our agreement with the Congolese government. There is no reference to the capital commitments. We are the owner of the licence. We have all the rights, environmental rights and approvals, to go ahead and develop the mine, but we are not subject to any particular schedule or capital commitments. Of course, we want to develop a historically important groundbreaking mine as quickly as we can do so safely and efficaciously.
On Exploration Opportunities:
We hold about a 460 square kilometer mining licence, which holds essentially a perpetual mining right. Everything developed on that licence would be subject to this new agreement with the Congolese government and in fact with Zijin, our current partner. Outside of that area we hold a lot of very important proprietary geological information about where there very well might be additional Kamoas or Kakulas. However, all of that work would be only for our own account, subject to the government's interest of 5% under the 1912 mining law. So we do have a broad regional interest in exploration which would be held totally by Ivanhoe Mines and would not involve our joint venture with Zijin or in fact this new agreement with the Congolese government. And in future I hope we can tell you more good news about where we hope to find more Kakulas.
On Financing:
We see no issue in procuring debt finance in China, let alone from other international sources. The highest grade copper mine in the world always gets financed.
On Kansoko Sud vs. Kakula:
The declines in both cases are production declines. And there's nothing to say you can't mine 4 million tonnes a year at Kakula, and also mine 1 or 2 million tonnes a year of much higher-grade ore out of Kansoko Sud. They can both supplement each other. They're both giant resources. It's just that the very best is the enemy of what used to be the very best, but is no longer the very best. It's in the miserable nature of our business that the best ore always is supposed to get to the concentrator first. It's a nice, elegant problem to have.
On Kakula Resource Estimation:
When we announced the first estimate it was already obsolete by the time we announced it.
On the Current Drill Programme:
We're running about five rigs to the rain. We have been doing some step-out drilling, particularly to the north-west, and I think I can tell you that we will probably be updating the Kakula resource for many years. For many years. Geologically it's open in many directions, and there may be more Kakulas to come!!!
ursusbrumae is a very astute mining investor. His posts are well worth the time to read -
http://www.stockhouse.com/members/bullboard-post-history/ursusbrumae
Learn more at ivanhoemines.com
Fidelity now owns >10%
Excerpts from report on SEDAR dated MArch 10, 2017:
The transaction that triggered the requirement to file this report was the purchase of 1,374,200 Class A Common Shares of Ivanhoe Mines Ltd. that occurred on February 15, 2017.
This is Fidelity’s initial filing above 10% or Fidelity’s security holding percentage, as at
the end of the month, increased to 10% or more.
Fidelity holds 85,642,869 Class A Common Shares representing approximately 10.96% of the outstanding shares of that class.
Read more at http://www.stockhouse.com/companies/bullboard?symbol=t.ivn&postid=25968470#OFKjXW2BU1oCbew0.99
A couple of my favorite statements from RF -
This is going to be either the second largest copper mine in the world, or the largest. And it's going to pump out massive cash flows, to the benefit of the Congolese people, who are now a partner in the project, and to all of our stakeholders, and to all of our end users of that metal who desperately need it to change the miserable current state of the world.
And, you know, our Chinese friends who are already in this project, we've known them for 25 years, they know how important this project is to China's economic, political and military security. And our Chinese friends bring great stability in the Congo, and we think that any perception of political risk is quite misplaced.
So, we are going to move mountains in the new year. We are going to drill assiduously, and we are going to increase the size of this resource, and we are going to scale up the project accordingly. What we're trying to do here is, we're trying to make history. Making history is a lot better than just making money. If you build the biggest and best new copper mine in the world, all of our shareholders are going to make a ridiculous amount of money.
Read more at http://www.stockhouse.com/companies/bullboard?symbol=ivn&postid=25967577#gdJEfhL2R8z3Uh3u.99
ursusbrumae posted most of what RF had to say during the Kakula CC -
CC link - https://www.dropbox.com/s/dr0anm4njyzp65d/2016-12-15%20Kakula%20PEA%20conference%20call%20recording.m4a?dl=0
On the Kakula Copper Strike
Robert Friedland, Executive Chairman of Ivanhoe Mines Ltd.
15 December 2016
Wow. Thank you, gentlemen, and I want to thank all the participants on this holiday season call.
After twenty-one years of incredibly hard work by hundreds of very talented people, arguably the
very best in the industry, our company is about to be an overnight success.
Now, we found Kamoa a number of years ago, and David Broughton and his team won a number
of the highest awards you can get in geology for that discovery, and we drilled it to a point where
it's 27 kilometres long and 10 kilometres wide – and you can't blame us for continuing to drill
that enormous blue whale to see how big it was. It's kind of hard to go to a new area 5 kilometres
away, where even now if we go up to Kamoa and drill the edges, it gets bigger. But we found
some very interesting early geology at Kakula. Now, in the mean time, we designed a 4 million
tonne a year mine at Kamoa and I am going to tell you how rapidly the situation has evolved and
in a very real sense, and only half tongue-in-cheek, this 25 page press release we have just made
for building a 4 million-, and then an immediate extension 8 million tonne a year mine, is
obsolete even before the ink is dry. I want to explain how this happened and where we're
headed.
Now, we had a bear market, and availability of capital was very low. We had pundits and
observers thinking we were going to issue billions of shares of stock diluting ourselves in the
development of three simultaneous world class assets. And so we said, well, let's see how small
we can make the capital investment in Kamoa at only 4 million tonnes a year – actually, we we
just started out thinking about 3 million tonnes a year, and then we realised the capital cost was
almost the same at 4 million – and we cooked up a plan for an excellent mine that could be
financed at the bottom of the cycle at 4 million tonnes a year. We developed the detailed
engineering and we announced it, and then we started charging ahead to pre-feasibility and
feasibility study in much more detail.
And then the discovery occurred at Kakula: first a few holes, and then just an overwhelming
discovery of an unbelievably rich and disruptive ore body. So, we started moving drill rigs down
there, we had to build a road to get down there. It's only 5 or 6 kilometres away. And we started
drilling and in 6 months we drilled out this monster that remains open. And we've now
announced 60 to 100 million tonnes: if you look at the indicated category and add the inferred in
this extremely continuous deposit, something on the order of 60 million tonnes, 80 million
tonnes, 100 million tonnes of plus-6% material, very shallow. And so we thought, well, let's see
what happens if we move that 4 million tonne mine, as designed, to Kakula. And the result was
lower capital, less capital in terms of economic development, because of the thickness and the
consistency, higher metallurgical recoveries, higher-grade concentrate, which reduces shipping
costs and realisation costs – and in short, a real world beater. And then we thought, well, what if
we build that one and then just build the original idea, the 4 million tonnes at Kamoa, a total of
8 million tonnes, all out of the first little billion dollars. One billion dollars: ladies and
gentlemen, it isn't what it used to be; Oyu Tolgoi is taking 13 billion so far, and before the district
is fully developed up to 350 thousand tonnes a day, at least 25 billion of capital will go into Oyu
Tolgoi. And the expansion underground for Grasberg has roughly a 25 billion dollar budget.
We're talking about one measly little billion dollars, of which our partners from Zijin came in to
provide 65 percent of the capital by debt, and our share of the capital, 175 million bucks, we have
that money in our pocket now, and more.
So we started designing this billion dollar unit to be comfortable. Now we've taken a hard look at
the ongoing drilling, and we will announce, in the first quarter, the results of that ongoing
drilling. But it's blatantly obvious, and we have now disclosed, that we're going to look at Kakula
at 8 million tonnes a year to start, and maybe even higher, maybe 10 million tonnes a year to
start. And it will generate ridiculous cash flows.
If you're making a 38 percent rate of return, 38 percent IRR, and cost of capital out of Asia, for a
Japanese company, where they are experiencing nearly negative rates of interest, you have access to cheap capital. And now that sentiment in the mining market has turned – in fact, Goldman Sachs, who is professionally short the copper market (probably talking their book, I might add), now that they've covered their short position at a massive loss for their clients, has turned around and become a bull on copper – so all of a sudden there's enormous capital flows interested in seeing what this resource can do and how big it can get. So, that 25 pages of information is very material to a mining analyst, it's very material to the people with whom we are engaged in strategic discussions, but I am happy to tell you it's already obsolete. We are now talking to potential sources of capital, in Europe, in Africa, in Asia, and in the Middle East, that have no material limitation on capital, and what we are being asked is, “well, how big can you make this thing? How fast can you make it big? What's the ultimate size?” And the mineralisation is now a blanket stretching about 27 kilometres further north, 5, 6, 7 kilometres at Kakula – you know, we're getting on 35 kilometres of strike. It's like a flat-lying blanket. How many holes would you like to poke in it? Would you like to put in 2 billion of capital?
Take a look at Las Bambas. My Chinese friends have 9 billion dollars dedicated to Las Bambas,
and that's a lot. And that's supposed to get them to 350 thousand tonnes a year. Well, our first
billion gets you to a peak of 347 thousand tonnes a year, and I am confident that the quality of
the concentrate is better, the access to market, all the factors. So, we're not at a high elevation;
we're on flat land. Water is not an issue in the Congo. The Congo River is the second largest
source of fresh water in the world after the Amazon.
So what we're doing now is we're going to expand the drilling. And we have the most intensive
interest in the affairs of this company that I have experienced since Voisey's Bay. And, in fact, I
would go so far to say, that if you have a 4.7 billion dollar net present value, at an 8 percent
interest rate, in these little baby mines, imagine what the NPV could be when we go to 8 million,
12 million, 16 million, perhaps 20 million tonnes a year. This is going to be either the second
largest copper mine in the world, or the largest. And it's going to pump out massive cash flows,
to the benefit of the Congolese people, who are now a partner in the project, and to all of our
stakeholders, and to all of our end users of that metal who desperately need it to change the
miserable current state of the world.
Now, Lao Tse, the famous Chinese philosopher, said that the best fertiliser for a farm is the
footsteps of its owner. This morning we had a commentary in the Globe and Mail. It
was basically an attack on Don Lindsay, attacking him on the thesis that he was being paid too
much and that miners get paid too much, and that people that invest in mining companies are
hurt when management have stock options. Actually, when people have exposure to equity, they
work with Silicon Valley intensity, and if you want to make a comment about exposure to equity
and companies, the greatest growth companies in the world in Silicon Valley all have employees
where everybody is exposed to equity. The mining industry is very cyclical and you need to
attract the very best people on the planet if you're going to make the best discoveries on the
planet. So the people that we have at this company are the software. The people that we have at
this company are the guts of it. They're the heart. And when people say “how is this fellow
talking to you so lucky as to find so many of the world's largest mineral deposits?” I always
protest and say “it's not me! It's the strength and the depth and the intensity of the technical
management team that is moving mountains.”
Now Kakula, I can assure you, is growing every day, including today, and it's growing this week
and it's growing this month, and it's going to prove to be probably the most disruptive copper
discovery this century. It's already achieved that accolade on the African continent, but we've got
wider horizons in mind for comparison.
Now the problem is that the engineers and the third party QPs (the qualified persons) are
struggling to keep up with the scale of the growth of the asset, and our sudden availability of
extremely large amounts of capital. When you've got a lot of money, all your problems are
solved. Once a company like Barrick gets in the index and makes cash flow, any kind of problem
that occurs in mining can be resolved by just spending more capital, and if you've got a cost of
capital of 1 or 2 or 3 percent, and your IRR is 38 percent, you can expand a resource like this
infinitely. Net present value is an evaluation stick for idiots. The numbers that we've published
on an NPV8 means that if I sell you a mine for a billion dollars, after ten years, you have to sell it
back to me for one dollar, because with the magic of compounding interest, there's no value to
anything beyond year 10. And we're three years away from commercial production, plus or
minus, and so, just on that three year delay you're taking a 30 or 40 percent interest compounded
in the deduction of net present value; in other words, just by getting three years older, that 4.7
billion will be more like a 6 1/2 or 7 billion dollar NPV because the mills are turning.
So, we are going to access from strategic players a lot of capital. We are in a competitive process.
We are in the midst of it. We are concerned that this company be run on the very best
international corporate practice, and that the mines be run on the very best possible
environmental and social corporate practice in the world, because when you have a mine with
very broad shoulders and it generates fantastic cash flows, you've got the capital for community
development, and you're generating huge amounts of valued employment, and you can train
your employees. For example, we've invested hundreds and hundreds of millions of dollars in
training in Mongolia, in the Mongolian workforce, and Rio Tinto is now proud that the
Mongolian workforce has the highest productivity and the best safety record in the entire Rio
Tinto system, and those people were trained from scratch, because they didn't come to the mine
with any bad habits. So in short, this is truly a once in a lifetime discovery, and we are the Jedi
you're looking for.
Now, solar energy has just become cheaper than wind power, and Lars-Eric Johansson is on the
board of Canadian Solar, one of the largest solar energy companies in the world. All of their
components are made in China. Today, electricity, generated by solar, is dropping below 2 cents
a kilowatt hour. And this mine is also connected to existing hydro-electric capacity. We have our
foot on over 200 megawatts of hydro-electric power. The third element is vanadium redox
batteries for the storage of grid-scale electricity. We have flat land. There's an infinite amount of
solar energy we can generate. We control in an affiliated company a very powerful vanadium
redox battery company based in China that can build very large scale – grid-scale – batteries.
And if you have those batteries, in case you have low water in a hydro-electric dam, as First
Quantum recently experienced in Zambia, the solar energy and the batteries can store the energy
you need. If you have ample rainfall you can run the hydro-electricity as fast as possible and fill
up the batteries. So the combination of hydro-electric power, solar power, and vanadium redox
storage will make this the greenest mine in the world. And if you're a greenie and you want to
stop burning our Arab friends' hydrocarbons, if you campaign against the Athabasca oil sands or
don't like pipelines or don't like coal, you have to acquire our copper.
The Chinese state grid is the world's largest buyer of copper metal. They have to clean the air for
1.3 billion Chinese people. A deposit like this is in the national security interest of any of the
major powers.
So, we are extremely blessed to have no snow, no ice, easy access to markets, extremely high
grades, and the concentrate – no one has ever seen a mine producing over 50% of concentrate
grade. So there are tremendous amounts of additional value to be squeezed out of this asset with
the advancement of technology in the next ten years. Mining is going to undergo a complete
revolution in technology: the way we drill, the way we grind, the way we blast, the way we
produce metal. And what we do with the metal is going to rapidly change because the world is
moving to electric automobiles, and the world is moving to much cleaner ways to generate power
and this mine is going to sit at the heart of the world industrial transformation. You don't
believe me? Just watch. Wait till you see what happens. We've given you fair warning.
So the goal is to surpass this preliminary economic evaluation, 25 pages long, 8 million tonnes a
year, 1 billion of capital, 4.7 billion dollar NPV. We'd like to double it. We'd like to triple it.
Maybe in time, we can quadruple it. And we're talking to the most interesting companies in the
world to team up with us and achieve this task. You know, when you have extremely high grade –
no one pointed out that – your mill has a very small footprint. You use less cement, you use less
steel, you use less electricity, you use less of everything because it's very high grade! And so,
nothing can compete with this, and the only mining share I recommend you buy is something at
the very bottom of the world cost curve. Well, ladies and gentlemen, let me tell you, this mine
will be at the very bottom of the world cost curve. As David Broughton said, it's Lucifer to
everybody else contemplating building a copper mine, with no exceptions. And that's why
Voisey's Bay became so valuable. The people at Sudbury, Ontario: one group used to work for
Falconbridge and drink in one bar, and another group used to work for Inco and drink in another
bar, and if somebody got drunk and went to the wrong bar, they'd beat him half to death because
he came from the competing company. When we found Voisey's Bay, we made a deal with
Falconbridge – in fact, Don Lindsay, who now runs Teck, was my backer – and the people at Inco
just couldn't stomach the idea, and raised the bid by 1.7 billion dollars, because the greatest asset
is a profound enemy to the second best asset. And ain't anybody have a copper discovery like
this.
And, you know, our Chinese friends who are already in this project, we've known them for 25
years, they know how important this project is to China's economic, political and military
security. And our Chinese friends bring great stability in the Congo, and we think that any
perception of political risk is quite misplaced. Actually, when I take a good look at the president
of the United States, either the current one, or the next one, I'm not sure any of them knows
what they are going to even say about mining. I mean, you might get a tweet out the Donald any
second that could dramatically change the future of oil and gas or mining. We just don't know.
And who is going to be the next president? Are they going to reverse those policies? Will it be a
Democrat? We know that the Congo lives on copper mining. The Congo produced a million
tonnes of copper, approximately, for the last two years. Each year. It's the fastest growing source
of copper. The economy is growing at about 7 percent a year. This mining project can more than
double Congolese production to 2 million tonnes a year. It dwarfs total Canadian production
which is in inexorable decline.
So, we are going to move mountains in the new year. We are going to drill assiduously, and we
are going to increase the size of this resource, and we are going to scale up the project
accordingly. What we're trying to do here is, we're trying to make history. Making history is a lot
better than just making money. If you build the biggest and best new copper mine in the world,
all of our shareholders are going to make a ridiculous amount of money. But that's not as
important or as satisfying at my age as making history. So, the key thing is to uplift the lives of
the surrounding people in Katanga. To strengthen our social licence. The government in
Katanga has been an enormous supporter of our efforts. The people in Katanga were elated
when we restarted one of the hydro-electric power generation units that had been abandoned,
basically, for maintenance, since the Belgian colonial era. We are training the local people in
farming and agriculture and chicken husbandry. We have a honey factory. And we haven't even
made any money yet! When this mine makes money, with its broad shoulders, it's going to set
the industry standard for improving the lives of the neighbouring peoples.
Now, the world needs so much copper for electric cars, for power transformation, for solar energy
and for wind power, for nuclear power. If you want to stop burning coal, and if you want to stop
burning hydrocarbons, and if you want to eliminate urban air pollution, you need our copper.
And if 9 billion people that are soon to arrive on this planet are going to breathe clean air, you
need this copper.
And so I want all of you on this call to join hands with us, take a piece of the equity, and help us
make history, because we are going to do it. Thank you for your support.
The 12/15/16 Kakula cc -
https://www.dropbox.com/s/dr0anm4njyzp65d/2016-12-15%20Kakula%20PEA%20conference%20call%20recording.m4a?dl=0
At the end of this cc, RF states - imminent copper production in only 2 years, not 3, because 2017 sets a new clock.
During the November, 2016 cc, RF stated that Kipushi could be producing in 1 year.
I have a lot more confidence in Ivanhoe's potential. I bought CTEQF for a trade after RF's presentation in Africa and with the belief that cobalt prices would rise.
CTEQF has a rich scandium deposit, but, there is no market for it.
My understanding is that the cobalt mine won't be built until CTEQF has off-take agreements in place for the production. This may happen in a reasonable amount of time, or not. I have no idea of how profitable CTEQF could be.
CTEQF has nearly 600 million shares outstanding and I consider that to be a lot for where they are at.
Certainly, I don't know as much about CTEQF as I do about Ivanhoe. Maybe, CTEQF will be a big winner.
I sold my CTEQF shares yesterday and I'm looking to buy more Ivanhoe on this pullback.
Great post by ursusbrumae -
Y'all talk about manipulation...
I don't know about such conspiracy theories. For the novice speculator, however, I would caution against buying shares on margin, because mining exploration stocks are the most volatile class of securities on the market, and a rapid downswing which is not only possible but inevitable from time to time, can easily trigger a margin call which may pry your shares away from you at just the moment you ought to be buying them. I also suggest that using stop losses is antithetical to value investing, because it says that you will buy at a certain price, but sell at a predetermined price below that price, with no change in the fundamentals, and that you are willing to do so on the sole basis of the marginal opinion as expressed in the marketplace. It's like saying you will buy a house for 500k, and happily hold it, but if your neighbour with an identical house ever sells his/hers for 400k, you will immediately sell yours at a 100k loss. It makes no sense. So shares bought with call money or "protected" by stops are quite vulnerable, especially in a stock like this one which is so riotously volatile, as evidenced by its recent twelve month surge like a bat out of hell.
And yes, there are games that professional traders play against the novice, including harvesting stops and prying shares out of weak hands which are leveraged, easily discouraged, or playing playing momentum like a moth to the flame and always buying high and selling low. However, most of these conspiracies are imagined. Market makers are in the market to provide a service, which is warehousing shares so that buyers and sellers may immediately trade and need not wait until the other shows up; for this, and their assumed risk of adverse selection (having to hold a possibly overvalued share) they are compensated by earning a (bid-ask) spread. For the most part, they are not out to destroy you.
In reality, a market is not some mysterious oracle, but a facility for trade, in which a large number of random unrelated transactions are occurring at any given time, each with their own reasons and motivations, whether well conceived or otherwise, and to which there is no special significance or intelligent information. So the truth is that the conspiracy is really undertaken by the unskilled trader against himself or herself, by being attracted to momentum and excitement, being easily swayed by others' poorly constructed arguments which appeal to emotion rather than logic, having a short attention span and therefore investment time horizon, not learning about a company, its industry, or business valuation, and therefore always buying high and selling low.
My suggestion would be to stop frantically glancing at the ticker every three seconds and cursing the nefarious daemons of finance, and in lieu of this endlessly amusing activity, study the company, its business and assets, compare it to others in the industry, and try to figure out how to value a mining company. If you do this, you may realise that everybody at this firm is working overtime to make you, themselves, and the African people rich. And if you give it a little time it might just happen.
Coming back to the matter at hand, after the recent minor pullback we are essentially back to a USD 2 billion enterprise value, give or take. I remind you Ivanhoe's share of Kipushi, by far its smallest asset, is worth well over a billion dollars in net present value. The Platreef is worth billions, considering all its expansion phases of development not reflected in the PFS. And K&K, without a doubt the greatest mineral discovery of your lifetime, is worth many many billions of dollars, and that is just for the 40% net to Ivanhoe. And as has been appositely observed, the firm is drilling up billions of dollars of fresh high-grade mineral resources every month. Or is it every week? Let's see, from late November to late January, Kakula apparently expanded by 40%, from 20 billion lbs Cu MI&I, which means 8 billion lbs Cu at USD 3/lb, amounting to roughly 24 billion dollars in 8 weeks, which is a rate of increase of 3 billion dollars worth of in-situ copper per week, or half a billion dollars a day. This was ramping up from five rigs, and now there are twelve drills turning at Kakula. So what is that, a billion dollars of metal discovered per day??? In any case, I think it a sound assumption that value is increasing at a pretty good clip.
Suffice to say, all things considered, that this stock today is massively undervalued. So to all the dastardly stock market manipulators who are conspiring to drive the price of this stock down, I think we all owe a debt of gratitude for helping us to buy more shares on the cheap. Because if my forecast is correct, in a few years' time these shares are going to be worth a whole lot more. And when you come to market Sotheby's will be carefully examining the authenticity of your share certificates, much as a Rembrandt or a fine Cezanne, before putting them on the block.
Read more at http://www.stockhouse.com/companies/bullboard?symbol=ivn&postid=25894670#2xjUIKWrlYqkxAKI.99
Hydrogen fuel cells to replace household grid electricity!
Gotta love this -
Toyota has the backing of Tokyo for its push into hydrogen. In Japan the government will give you $25,000 – nearly half the total cost – if you buy a fuel cell vehicle. The country also has a program to install hydrogen fuel cells into 10% or 5.3m Japanese households to replace grid electricity by 2030.
http://www.mining.com/new-toyota-technology-blow-platinum-palladium-price/?utm_source=digest-en-mining-170222&utm_medium=email&utm_campaign=digest
It looks like the coming bullish copper cycle will be off the charts and that it could last a decade or more.
Currently, copper production is less than 20-million tonnes a year.
The introduction of electric cars to clean the air will require 120-million tonnes of copper a year.
In the last three years, the world has increased copper production by an average of 328 000 t a year.
From now on, the world would need 6.4-million tonnes of new copper production a year just to maintain where the world is headed.
But the mining industry was not even close to finding the copper to clean the air.
The industry is mining about 16% of the copper required.
http://www.miningweekly.com/article/enormous-global-demand-on-way-for-copper-platinum-zinc-friedland-2017-02-08
The Greatest Prize In All History - (Again)
https://ceo.ca/@gianni/the-greatest-prize-in-all-history-again
There is a new invisible hand in copper markets. Those that mine, fabricate or invest in this irreplaceable commodity need to realize that they are in the energy business.
From Stockhouse -
ursusbrumae
10,000 Copper
Paul Gait of Bernstein Research, with a Masters in Experimental and Theoretical Physics, published a hundred page document laying out the case for USD 10,000/t copper. The essence of the case is that population growth, urbanisation and renewable energy will require much more copper production per annum, and the increase needed from now till 2030 is met only one-third by known projects. Even if significant new discoveries are made, they will not close the gap because they take too long to develop. And meanwhile, grades are declining and costs escalating everywhere as existing copper mines deplete.
One noteworthy point he makes is about the gargantuan Chilean porphyries in the high Atacama desert in the foothills of the Andes. They currently produce 25% of the world's mined copper. They were each discovered between 35 and 150 years ago. But there have been no new major discoveries in that geography, despite a long period of foreign exploration with modern methods since Pinochet in the 1970s, the US-Chilean alliance, market liberalisation via the Chicago school, and opening up to foreign investment. Not one major porphyry was found there since 1981, the year La Escondida was discovered. The only major discoveries since then were Grasberg in Indonesia and Oyu Tolgoi in Mongolia.
The top ten copper mines in the world by production, La Escondida, Antamina, Los Pelambres, El Teniente, Chuquicamata, Grasberg, Los Bronces, Radomiro Tomic, Andina, and Collahuasi, eight of which are from Chile, one Peru and one Indonesia, account for 20% of the world's copper supply. They all require very large sustaining capital budgets to maintain production, and with declining grades require more throughput just to keep production level. The South American porphyries are challenged by water shortages in the driest desert in the world 2,000+ metres above sea level.
Of all known metals, copper has the highest ratio of consumption to crustal abundance, which means it is a special metal. He calls it the most over-utilised metal. One might say that it is the most precious metal relative to abundance. In any case, it is essentially the porphyries of the United States, especially Bingham Canyon, which allowed large scale copper production, which was necessary for the electrification of the Western world. And then the porphyries of Chile which ramped up production in the 1980s and 1990s which allowed electrification and modernisation of the Third World. Both developments brought about secular declines in the real price of copper.
Today, China is still at a very low copper intensity (consumption per capita), a quarter or a third of that of developed countries, and needs much more to reach its urbanisation and development horizon. India is at 5-10% copper intensity. China is the world's second largest copper producer, but is not well endowed relative to land mass, or certainly population, and has low quality deposits, with now very short reserve lives. They are vastly outproducing their geological endowment, and this cannot continue. Essentially, the modern world as we know it was made possible by electricity, and this has depended upon giant copper porphyries, first in the United States and then in Chile. But no new copper district can replace Chile. It is a geological freak. Along the full length of the west coast of South America, the world's greatest continental subduction zone has created these enormous volcanogenic copper deposits all through the Andes mountain chain. Nothing like it has been found, nor is it likely to be found, to replace Chilean copper supply.
There is an important argument about production schedules. Chile used to have a 100 year reserve life. But production increased to bring reserve life down to 30 years. This is natural, to increase net present value by receiving cash flows sooner. However, there is a limit to this optimisation. This is because increased production requires more installed capacity at the mine site, mill, flotation plant and smelter. At a USD 10,000-15,000/tonne capital intensity, which is average for the Chilean porphyries, and at the low end for copper mines worldwide, with few exceptions, the optimum reserve life is 25-35 years, respectively. So bringing forward production beyond 30 years is value-destroying because the accretion of the discount from earlier cash flows is more than offset by increased upfront capital cost.
So demand is set to increase significantly, while existing ore bodies decline. New discoveries, which are not likely to be of the scale to replace Chile anyway, will take twenty years to develop. The conclusion of the report is that over the next 15-20 years prices must rise significantly to make resources of known deposits economic, and therefore reserves. Thus the USD 10,000/tonne copper price forecast.
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