There was some concern among investors in Ivanhoe Mines, myself included, that a critical Mining Right Permit for the company’s Platreef platinum deposit in South Africa would be delayed.
May 31, 2014 was the looming date by which either the Permit had to be received or all work on the project, such as the ongoing sinking of a bulk sample shaft 8 meters in diameter, would have to be suspended, with negative implications for project timelines as well as net present values.
However the company announced this morning that the Permit has been received, on time, and it’s all systems go at Platreef, which some consider the best platinum ore body every discovered. The permit, which can be extended, grants the company the right to mine on the property for 30 years.
This is badly needed good news for Ivanhoe’s share price, which has fallen from $2.01 May 5, 2014 while the company’s executive chairman Robert Friedland was on a North American marketing tour, to close at $1.35 May 29th, 2014.
The company’s shares got crushed on May 15th when they released financials which showed a lack of available capital for the company’s two Democratic Republic of Congo copper projects, despite having over $140 million set aside for Platreef, still.
Media seized on the situation to attack the highly visible company’s vulnerability, and a $150 million bought deal financing was announced May 20 at $1.50 per share with a full warrant at $1.80.
It was unfortunate that the financing was done following the negative news and not at a higher price.
Today’s important bit of news increases my expectation’s for Ivanhoe’s shares, however we are entering the summer quiet period, which is typically soft for resource stocks.
Executive Chairman Robert Friedland offered no comment at press time, citing a corporate black out period.
I am biased. Always do your own due diligence. Thank you.