I decided to pay a visit to the RIU conference last week, with the presence of Investigator at the event being the primary drawcard. There were some questions that I had been meaning to put to the company, and I figured that I may as well take full advantage of the occassion, given that they were in my neighbourhood.
The presentation Andrew gave at the function was more or less identical to what is related in the above announcement, excepting a few interesting tidbits that were adlibbed during the talk.
He introduced a bit of a prop into the presentation, in the form of a silver bar, worth several hundred dollars. At the end of his talk he held up the silver bar, and said the audience that he had put a card under one of the seats, and whoever had the card, would get the silver bar.
One woman in attendance at the conference found the card, and went up to get the silver. As she claimed her prize, she mentioned that she had previously worked at a silver company, and was an investor in silver stocks.
Andrew asked her if she was a shareholder in IVR, and she said 'no', which I thought was a bit shameful. An Australian silver investor who doesn't own shares in IVR? No self-respecting silver investor would surely admit to having overlooked IVR, I would have thought.
Anyway, it did serve to highlight that IVR's decision to attend the conference was probably shrewd. My own feeling has been that the company hasn't been cutting through to investors in the two biggest Australian cities, and the comments by that lady who won the silver were illustrative of this point.
Anyway, enough about silver for now. The main reason I showed up at the conference was to learn more about Investigator's other projects.
Years ago, when I was first starting to run the ruler over the local silver stocks, I naturally zeroed in on the two biggest. But initially, I had some trouble picking between Investigator and Silvermines. In the end, I backed the former.
Although there were a number of reasons behind my decision, one major factor was that I felt that Investigator were sitting on a number of very promising looking side-projects, even if these tend to get overshadowed by the Paris silver behemoth.
As such, after the presentation, I spoke to the Investigator people who were in attendance, with most of my questions being directed at their long-standing exploration manager, who has been with the company since the days that John Anderson was in charge.
My questions were focused on each of the non-core projects. I've listed their responses about these below. Bear in mind I didn't take any notes, I am just going off memory, so don't take anything stated below as gospel.
I've included the map from the IVR website under these bullet points, highlighting the location of the various South Australian projects discussed below.
♦ Molyhil: I'll start with Molyhil, as apart from the core silver projects, the Molyhil Tungsten/Molybdenum project was the only one that Andrew highlighted over the course of his presentation.
He seemed to indicate in the presentation that Molyhil was one of the best Tungsten projects in Australia, comparing it to the Dolphin project on King Island. In fact, I think he may have even stated that he considered it to be more valuable than the Tasmanian project, though it is possible that I may have misunderstood what was said.
But the comparison is intriguing, even if we assume that Molyhil only offers half the promise of the Dolphin project.
Keep in mind that Group 6 Metals, who control the King Island project, has a market cap of $131 million, at time of writing - compare this to the current IVR market cap- and the King Island project is pretty much the only thing that Group 6 have going for it.
Admittedly, IVR only has a 25% interest in Molyhil, and the King Island project is much more advanced. All the same, the disparity evident here adds some weight to the suspicion that the potential of IVR's other projects is not being factored into the share price.
♦ Yellabinna/Chundaria- The Fowler Domain projects, in the far west of South Australia, are of interest because they are considered to be prospective for nickel, with gold also an off-chance. IVR is involved in a joint venture with Osmond Resources to develop these, assuming Osmond meet their commitments.
♦ Screechowl- Magnesite is the focus of this project, however the company geologist didn't seem to be particularly keen on this project, on account of it being a very remote location.
♦ Plumbago/Wiawera- He seemed to be much more enthused about the cluster of projects at Curnamona, located to the west of Broken Hill. He said he thought that the area offered good potential for both copper and silver.
♦ Algebukina- According to the geologist, there hadn't been much drilling going on in this area, although apparently at some stage BHP had drilled a few holes. The area could hold promise for copper.
♦ Cartarpo- I find this tenenment is particularly interesting, as it sit alongside the old Burra mine, one of the first copper mines in Australia. I was curious to see if the area still held promise, given the long history of mining in the area, and the geologist seemed to think that the area was still attractive.
However, he also hinted that Investigator might be well positioned to pick up some more tenements in the Burra area in the near future. So that could be something to watch.
If the company ends up in control of a decent patch of the land around the historic Burra mine site, that will give them with something to brag about if the copper price surges to new highs in the years ahead, as has been opined by numerous resource analysts over recent years.
In summary, I think a number of Investigator's non-core projects are potential quite valuable. The three standouts are Molyhil, the Curnamona projects to the west of Broken Hill, and possibly Cartarpo (assuming that IVR are able to pick up some more tenements in the area).
I didn't ask them about Tasmania, it just slipped my mind as I can't recall seeing anything about the project there for a while.
As mentioned at the start of this post, some years ago I evaluated both Silvermines and Investigator, and ultimately decided to back IVR.
So, before winding up, I think it might be worthwhile to engage in a quick back-of-evelope evaluation of these two Australian silver giants, considering their various tenements.
Silvermines is sitting on the major Bowdens Silver project, however that is pretty much all they control, apart from a small gold project near Orange.
Investigator, on the other hand, have, in addition to their core silver projects, an intriguing collection of side projects, a number of which look very promising.
But when we consider the market cap of Silvermines, which currently sits at $300 million, with Investigator's, just above the $75 million mark, it does seem something is a little askew.
Is Silvermines overvalued, or is Investigator undervalued? I suspect it is probably a bit of both, though on balance, I'd guess that the latter is the greater factor.
It would appear that the current share price isn't placing any value on Investigator's non-core projects; indeed, it doesn't even seem to fairly relect the value of their core silver projects.
IVR Price at posting:
5.3¢ Sentiment: None Disclosure: Held
