Ivanhoe Mines Ltd T.IVN

Makes no sense

[wawahunt2]

Robert mentioned the share price a few times and net present value...

Im reminded of the movie THE BIG SCORE.... the line 

2+2 = Fish !

The market  will move fast when the big guys get there position in place .

Its not a fare market ....HOLD .... HOLD .....HOLD

[cashtango00]

Its a similar scenerio to the oilsands companies in Canada.  They sit on 30-40 year proven reserves but using a discounted cashflow model, resources produced 10+ years out have very little value.  They are basically modelled at next to nothing.  Models that discount decades of production at close to nothing need to be questioned.  

[idleweiss]

I don't think that they need to be questioned. This has to do with the time value of money. Money received in the future is not going to be worth as much as the money received today. What you can question, however, is the discount rate that is being used for these cash flows. 

[cashtango00]

I disagree.  It is not an effective tool for valuing long-life resources.   For example, a standard discount rate is 8%.    $ 100 in cashflow in year 2 is $ 85.73 $ 100 in cashflow in year 35 is almost nothing at $ 6.76  If you have a long-life reserve like this which may very well end up producing for 70+ years, you are saying 35 years of production is worth almost

[idleweiss]

To me it makes perfect sense. If I have $6.76 today then I can grow it to $100 in 30 years. So that's what $100 received in 30 years is worth today.  It's possible you are thinking of an annuity ($100 received every year for 30 years) so that will definitely be worth more than $6.76 today. Commodity prices are irrelevant in this model because it's cash flows you are concerned

[Luxor69]

The value of money is unpredictable, even more so 10 years out, but so is the value of copper. The relative cost of money can be predictable if stuctured accordingly. Valuation will roll over for the next 100 years, up and down. Less out, more in, so the story goes. Time will tell.  Cheers

[BSdetector2016]

I agree, however, that's not the way the industry works. That's why you see often the high-grade mined first, at the highest tonnage possible, during the early years of mine life. Pay off the debt as quick as you can, then make oodles of profit. Having that high-grade mined near the end of mine life just doesn't have the same impact on the DCF model. Accountants drive this part of the

[Drksideofmoon]

This is where brand valuation can come in handy.