Before I begin my ramble I would like to first say that meeting and talking with management at the Mining 2012 Conference was a huge pleasure. Especially talking with David Jones. He was patient, thorough, informative and very candid. It is people like him that give me encouragement in investing in miners and I hope that I can be part of his business!
With that said I totally concur with market_assassin's comments . I have this feeling that IVR will not do much even after the JORC unless we see some spectacular numbers. Now I will back this feeling up with some information from management:
1)Drilling, evaluation and exploration ~$1M/month, PFS ~$8M, DFS ~$4M, BFS ~$4M, ~$10M to get a resource estimate and capital developments costs $25-$50M. Giving a rough estimate of $51-76M + ~$1M/month (unknown time length). Don’t forget admin cash outflow
2)Thus we have future cash burn more than triple our enterprise value.
3)First pour will be in 3+ years and most likely in 5 years.
4)Now using same cost structures CCU and if you do a DCF you gat valuations that aren’t that impressive unless IVR is quite a large resource base.
These calculations are really loose so we want a discount to our loose valuations because first cash flow is so far out. Its better to be approximately right then completely wrong. The resource base is going to be big but we don’t know how big so I will still wait.
Please feel free to shoot anything down.
IVR Price at posting:
16.2¢ Sentiment: None Disclosure: Not Held
