RE:Sovereign riskMy take is that Congo isn't high risk, it's extreme risk. And they are in the middle of a constitutional crisis. Even Rick Rule says it's a speculation and not to invest your kids college fund into it. That's the downside. A breakdown in laws in the region and the copper assets become complicated over night. Also, infrastructure. How do you ship concentrates with so few roads. Easy to high jack or impose false "tax" on shipments either by warlords or corrupt government officials. Word on the street is that President Kabila will introduce new provinces, new provincial borders and impose new rules, new taxes, etc. All in a ploy to extend constitutional dialogue and legitimize his overstay in power. Anyway, miners have operated for years there, so it can be done.
South Africa is stable in my opinion. Unions?....meh. They'll work out fair labour costs. In my opinion, it s the SA asset that allows me to stomach the Congo assets and keeps me hanging on. Also, the macro metal supply demand picture is favourable for those with a multi year horizon.
Im apparently much more conservative than most on this board if the bids of late are any indication. If Congo transitions peacefully to a new government next year, then IVN will be remembered for many many years as a legendary stock pick.
I would buy some and sock those shares away in a drawer somewhere. Rick Rule may think it's speculative, but I see it as an investment. Worthy of a full position in all portfolio accounts. You know the world needs the commodity, you know the worlds mines are depleting, you know management is exceptional, you know the deposits are proven. The Ivanplatts asset stabilizes the risky Congo assets and allows you to take a shot at a huge gain. So although the return and timeframe is hard to zero in on, the margin of safety is there to indicate IVN moves way higher.
For investment opportunities like this, sometimes I ask myself what is the cost not to buy. And for Ivanhoe, I become very agitated and uncomfortable when I imagine not owning it.