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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
Post by Homeboneon Dec 19, 2017 3:39pm
258 Views
Post# 27189979

Don't forget the royalty payments

Don't forget the royalty payments

I did some digging into the details, and according to the Clean Teq PFS, Ivanhoe has a 2.5% of revenue royalty (after NSW royalty) on the Sunrise (formerly Syerston) project.  The DFS will be out in the next 1-3 months.

Rough estimate:

PFS: Cobalt -> 3,222 (tpa) x 72,000 (current price) x 93% (recovery) = ~$216,000,000 USD
         Nickel  -> 18,730 (tpa) x 11,500 (current price) x 93% (recovery) = ~$200,000,000 USD

Assuming 100% is payable gives us ~$416,000,000 of revenue per year.

The NSW Royalty = Revenue - Processing Cost – (33% x Site Admin Cost) – Allowable Depreciation Deduction - Transport Costs) x 4%

Using figures and estimates from the published PFS, I come up with:

($416,000,000 - $105,375,000 [$56.2 x 0.75 x 2,500,000] - $2,225,000 [1/3 x $3.56 x 0.75 x 2,500,000] - Allowable Depreciation Deduction - Transport Costs) X 4% 

So $308,400,000 (not including depreciation and transport costs... couldn't get an estimate) x 4% = $12,336,000

Ivanhoe Mines Royalty = [$416,000,000 - $12,336,000 (which is too high)] * 2.5% gives us

So over $10M USD/yr .... not bad considering we can expect payments to start sometime in 2019!  It should help take care of some of the annual Ivanhoe G&A.... if the company is still around then.

Bullboard Posts