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Monday, June 21, 2010

Ivanhoe Mines (NYSE:IVN) Beats Gold Price Trend Today - Up Over 2 Percent

Ivanhoe Mines (NYSE:IVN) (TSE:IVN) went against the grain of gold prices today, and pushed up over 2 percent, gaining $0.30, or 2.02 percent at the close in New York.

In what could become the mining story of the decade, Ivanhoe is poised to continue its rise in value, even if all it had was its Oyu Tolgoi Project in Mongolia, which is scheduled to being production sometime in the middle of 2013, with construction on the mine starting this month.

The project will bring Ivanhoe into the top tier of not just gold mining companies, but mining companies in general, with copper production expected to be at 1.2 billion pounds a year, and gold at 650,000 ounces a year over the first decade of production.

At its peak, single-year production at the project could reach as high as 1.1 million ounces of gold and 1.7 billion pounds of copper. Hints have been swirling that these estimates could possibly be conservative.

Oyu Tolgoi is projected to become one of the three top copper/gold mines in the world, and has a solid, long-term legal and regulatory agreement in place, and is partners with the Government of Mongolia in the project.

Ivanhoe has a 57 percent stake in SouthGobi Resources, a subsidiary also based in Mongolia which has been providing coal to customers in China.

They also own 81 percent of Ivanhoe Australia (ASE:IVA), which a scoping study has concluded has significant molybdenum and rhenium deposits which should offer long-term cashflows, according the company. The caveat there of course is the impact of the 40 super tax on profits which has resulted in many companies putting off projects into the future.

The company also owns the Altynalmas Gold Ltd., in Kazakhstan, recently bumping their position up to a 50 percent stake in the company which controls the Kyzyl Gold Project in that country via a 100 percent stake.

Altogether, Ivanhoe has the underpinnings for a long, profitable run into the future, and in a few short years should become one of the premiere miners in the world, and as mentioned earlier, possibly the mining story of the decade.

If the main solid management and keep operational cost, along with debt, low, they should be one of the best investments in the sector for the long term.

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