Might I respectfully suggest a new heading for this thread.IVA...

Might I respectfully suggest a new heading for this thread.

IVA bidding power FALLS after the company releases resource clarifications

It seems that IVA have cobbled together an amazing set of resources - alongside, underneath and remote from - a couple of large holes in the ground in the Cloncurry district, where mining was deemed uneconomic back in 2003.

As per yesterdays release:

The combined metal inventory for Ivanhoe’s Cloncurry Project, encompassing Mount Elliott, Mount Dore and Starra Line, now totals 3.1 million tonnes of copper and 5.1 million ounces of gold.

The resources equate to a current in ground value of $31.9 Billion Aussie Dollars or $5.10 per share if you apply an IGV of 5%.

The profitable mining of low grade ore at depth to the extent that will be necessary for IVA, appears problematical at best. Particularly since previous operators failed, and they would have targeted the higher grade ore pods because of low prices for their product at the time.

Additionally, the resource statements contain a very large tonnage of inferred resources grading 0.5%. There appears to be a lack of confidence by the market as to what the eventual 'grade quality' of their resources will look like after extensive exploration.

IMHO, the current price is most likely providing the company with a 'strong' dose of reality after extensive details of their projects have now been released to the market.

If they plan to use their existing projects for price leverage to assist in consolidating projects in the Mt Isa/Cloncurry district via scrip offers, then they will need to be able to produce much stronger results than what they have come up with so far.

Cheers
Nev