IVN Australia was $.30 a few months ago, now $2.50
Ivanhoe’s Rhenium Deposit May Make It Top Supplier (Update1)
| Email | Print | AAA
By Jesse Riseborough
April 21 (Bloomberg) -- Ivanhoe Australia Ltd., a unit of billionaire Robert Friedland’s Ivanhoe Mines Ltd., may become the world’s biggest supplier of rhenium, which is used in jet turbine blades, once production starts at its Merlin project.
The Merlin rhenium and molybdenum resource in Australia’s Queensland state contains metal worth $4.6 billion at today’s prices and is the world’s highest grade deposit of the two rare metals, Melbourne-based Ivanhoe said today in a statement.
“We can probably become the dominant supplier of rhenium in the world,” Ivanhoe Australia’s Chief Executive Officer Peter Reeve said in an interview by phone from Melbourne today. “We would try and tie up with a long-term end-user contract.”
Production may start within two years, Reeve said. General Electric Co. and Rolls-Royce Group Plc are among the world’s biggest users of rhenium and Ivanhoe will seek long-term sales partners as development proceeds, he said. The stock rose to a record in Sydney trading.
“It is a very significant discovery,” said Jo Battershill, a Sydney-based analyst with UBS AG, who has had a ‘buy’ rating on the stock since it started trading in September. “This thing is clearly a significantly higher grade than any molybdenum- rhenium project in the world,” he said by phone today.
Ivanhoe jumped 30 percent to A$1.88 at the 4:10 p.m. Sydney time close on the Australian Stock Exchange. The stock has surged more than sevenfold this year and has a market value of A$588 million ($412 million).
The company is about 83 percent controlled by Vancouver- based Ivanhoe Mines, according to filings last month.
Mine Cost
It may cost about A$150 million to build a mine and plant at Merlin, Reeve said. The deposit contains 13 million metric tons of ore for 6 million ounces of rhenium, 110,000 tons of molybdenum as well as some copper and silver, Ivanhoe said today in the statement. The company is seeking to complete a development study for the project by the end of the year, Reeve said.
GE, Rolls-Royce and Pratt & Whitney Canada U.K. Ltd. buy about 90 percent of the world’s rhenium supply, he said. The metal currently sells for about $350 an ounce, Ivanhoe said. Total global production is about 50 tons a year, it said.
Rhenium was first identified in 1925 by German scientists and was the last naturally occurring chemical element to be discovered, Ivanhoe said. The metal, which has a melting point of 3,180 degrees Celsius (5,756 degrees Fahrenheit), is used in turbine blades to enable them to operate at high temperatures.
To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net
Last Updated: April 21, 2009 02:48 EDT
do your own due diligence
herb