Good Day for IVN The committment of RioT to spend $900 million on Phase 2 underground development is key IMO.
RF has always said there is much more value to be unlocked. The last standstill agreement reserved an exploration budget with a free hand to IVN management, but turned over mine development to the common managment committee with RioT.
Now RioT says - well, if you believe there is more value, then you put up the funds to develop that, but we want to preserve our own upside as well, so you can't dilute us. Contrary to what some on the BB have said a rights offering is wholly non-dilutive to participants, provided they are willing to meet the company's cash call and up their investment. Thus it is priced at an attractive discount to market value of the shares.
The obvious locations for further development or value can only be at either end - Heruga or HNE. And we trailer park dwellers at ETG have being saying so for a long time.
So for those that believe the OT trend holds more ground that wll add NPV ... this is a good day. If you are just a vendor of what you have "in hand" in the sense of current reserves and Phase 1 of the mine ... you can roll the dice on the elections, but the market sure has soured on your valuations ... but I don't believe in efficient market pricing of IVN after watching this roller coaster for almost ten years.
RioT was willing to pay $25 for a big chunk, they know the values better than anybody, while there may have been a control premium built in there, they are bargain hunters too. I'd say IVN was a screaming buy at this stage, I'd say the ETG JV looks to have $900 million coming down the pipe to increase its NPV, and I'd say ETG looks pretty darn juicy today too.
CG