RE:RE:RE:You people just don't get it.Carbide,
1) RF parted ways with Turquoise Hill 7 years ago. For investment purposes, I always consider a company in light of BOTH management and the project. You require the right combination to make it attractive for investors. I would never invest long term in a subsidiary majority owned and controlled by a major, in this case Rio Tinto. They will obviously run affairs in their own interests, not those of retail minority shareholders. RF is not responsible for the trajectory of a company he hasn’t been part of for 7 years. And you’re missing the key point here. Ivanhoe has never been a miner. RF develops very high quality projects, and then sells them.
2) You claim the copper supercycle started in 2000, and ended in 2011. In 2000, the price of copper was 60 cents lb. It did very briefly top out at $4.50 in 2011. The current price of $2.95 lb is on the high end of any historical chart. And every single forecast anticipates a tight copper supply going forward, with upwards pressure on prices. Capital Economics out of London expects $4.50 lb. Who knows? Maybe, maybe not. The point is your view that copper is all washed up, and the party ended in 2011 is patently false. It has been consolidating, and the next move up won’t be temporary like in 2011, but sustained.
3) You say that long term success in mining is quote “nearly impossible” in every jurisdiction. You say, and I quote, the glass is “99% empty”. Aside from the fact that you have a uniquely morose view of the mining business, this viewpoint is inaccurate. There are many successful mines. If not, private mining companies would not exist. Why own a private business that never, ever, makes money, anywhere in the world? What is true for private companies, also holds true for public companies. They’re both in exactly the same business, the only difference being public companies can usually achieve economies of scale unavailable to most private companies.
4) The DRC is a particularly challenging place to do business. Here I agree with you. The new mining law will drive away new business in droves. Which will put pressure on the government to ease up. They need the money. Aside from any possible arbitration, the government has hedged their bets, and left the door open to negotiating projects on a case by case basis. What does this mean in practice? They can alter the mining law at their discretion. There is also a separate agreement between the DRC and China for companies operating within DRC. Chinese state miners own just under 30% of IVN. DRC is a place where a lot of business is decided behind closed doors. It’s the type of business environment where RF has excelled in the past. Carbide, you’re saying none of this is going to work out, and IVN investors are doomed. Although this is always a possibility, I don’t believe that is the most likely outcome.