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Ivanhoe Mines Ltd. T.IVN

Alternate Symbol(s):  IVPAF

Ivanhoe Mines Ltd. is a Canada-based mining, development, and exploration company. It is focused on the mining, development and exploration of minerals and precious metals from its property interests located primarily in Africa. Its projects include Kamoa-Kakula Complex, Western Foreland, Kipushi and Platreef. The Kamoa-Kakula Complex project is a stratiform copper deposit with adjacent prospective exploration areas within the Central African Copperbelt, approximately 25 kilometers (kms) west of the town of Kolwezi and approximately 270 kms west of the provincial capital of Lubumbashi. The 17 licenses in the Western Foreland cover a combined area of 2,407 square kilometers to the north, south and west of the Kamoa-Kakula Copper Complex. The Kipushi Project lies adjacent to the town of Kipushi and 30 kms southwest of the provincial capital of Lubumbashi. Its Platreef project is situated approximately eight km from Mokopane and 280 km northeast of Johannesburg, South Africa.


TSX:IVN - Post by User

Bullboard Posts
Comment by ursusbrumaeon Jan 08, 2016 1:45pm
221 Views
Post# 24440951

RE:Lockup shares

RE:Lockup sharesInvestor864, when the company (then called Ivanplats Ltd., TSX:IVP) went public on 17 October 2012, it issued 63.3 million shares, representing 12% of the outstanding shares.  The remaining 88% were held by earlier investors in the company who purchased shares while it was private.  As a condition in the prospectus of the IPO, the 88% of common shares held by early investors would be designated Class B shares, which would be restricted from trading until a predetermined date in the future.  The IPO shares were designated Class A shares and were freely trading from the IPO date.  This "lock-up" or escrow agreement was ostensibly to protect the investment of the new investors (in the IPO) as well as the market value of the company, by preventing a flood of selling of early investors who suddenly had a chance to sell their shares on the Toronto Stock Exchange for what was in 2012 probably a significant premium to what they had paid.  Accordingly, a schedule of twelve quarterly (four times annually) lock-up releases of B-shares was set forth, beginning on 23 April 2013 and every three months subsequently, ending with the final release on 23 January 2016.  On each lock-up release date roughly one twelfth of the B-shares would become freely trading (by conversion into Class A shares) and could then be sold freely on the Toronto Stock Exchange.  On 31 December 2012 there were 529 million shares outstanding, including both Class A and Class B shares, but 250 million Class A shares have been issued since this time in a sequence of share issuances, for a total of 779 million shares outstanding today, 9 January 2016, including 36.2 million Class B shares, the balance comprising Class A shares.  The B-shares will become free-trading in two weeks, on 23 January 2016.  Some speculate that this could depress the share price, becuase B-shareholders may wish to sell at this point.  Around some of the other past lock-up release dates, the stock has fallen, but not always, and it was sometimes attributable to other factors, such as decreases in commodity prices.  This is the final release.  In answer to your question, this release does not constitute dilution per se, because the 36.2 million shares being released should already be reflected in the share float (779 million shares) and resulting market capitalisation (rougly CAD 475 million at a share price of CAD 0.61 at the time of this message) published on most financial information services.  The only issue is the potential downward pressure on the stock resulting from the sudden increase in the supply of shares.  On the other hand, some have argued that holders of the B-shares who had wished to capture the market value of the stock prior to their scheduled release may have borrowed short A-shares, and sold them in the open market prior to lock-up release.  If so, the newly converted and released B-shares would presumably be simply returned to their lenders when they became free-trading, and the release would be neutral for the share price, as the sale would have been previously reflected in the market at the time of the short sale.  I hope this helps.
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