From the analysts: SouthGobi work suspension and Ivanhoe Mines update
The Mineral Resources Authority of Mongolia has asked SouthGobi Resources to suspend exploration and activity on certain of its licences including the licence on its flagship Ovoot Tolgoi mine, BMO Capital Markets said in a morning note (read theReuters story here). The move comes after Aluminum Corporation of China Ltd. (CHALCO) announced earlier this month it would buy Ivanhoe Mines’ SouthGobi stake. The suspension would be to allow Mongolia to review the ownership change, which is currently being reviewed by both Canada and China, without including Mongolia, BMO’s note says.
BMO says the news could have a potentially negative effect on both SouthGobi and Ivanhoe.
BMO’s target price for SouthGobi is $7.83 and for Ivanhoe $18. On Friday, shares ofSouthGobi closed at $7.26 and shares of Ivanhoe closed at $12.75.
Raymond Goldie of Salman Partners however notes that Ivanhoe is on track with its own project at Oyu Tolgoi, with the company saying on Friday that “pre-stripping of the open-pit mine is preparing to send first ore through the primary crusher to the coarse-ore storage next month” and “the stringing of 220 kV power transmission lines to the Mongolia-China border is continuing”. So electricity isn’t an issue.
And Ivanhoe Australia, which is 63-per-cent owned by Ivanhoe, has completed a feasibility study on its Merlin molybdenum and rhenium project in Queensland Australia.
“It’s good to know that Ivanhoe Mines has other goodies tucked away in case the lugubriousness of its financing negotiations for Oyu Tolgoi oblige it to consider disposing of any more of the family silver beyond its proposed sale of SouthGobi Resources Ltd.,” Goldie wrote in a note.
Goldie’s target price for SouthGobi is $14.50 and $20 for Ivanhoe.
BMO says the news could have a potentially negative effect on both SouthGobi and Ivanhoe.
BMO’s target price for SouthGobi is $7.83 and for Ivanhoe $18. On Friday, shares ofSouthGobi closed at $7.26 and shares of Ivanhoe closed at $12.75.
Raymond Goldie of Salman Partners however notes that Ivanhoe is on track with its own project at Oyu Tolgoi, with the company saying on Friday that “pre-stripping of the open-pit mine is preparing to send first ore through the primary crusher to the coarse-ore storage next month” and “the stringing of 220 kV power transmission lines to the Mongolia-China border is continuing”. So electricity isn’t an issue.
And Ivanhoe Australia, which is 63-per-cent owned by Ivanhoe, has completed a feasibility study on its Merlin molybdenum and rhenium project in Queensland Australia.
“It’s good to know that Ivanhoe Mines has other goodies tucked away in case the lugubriousness of its financing negotiations for Oyu Tolgoi oblige it to consider disposing of any more of the family silver beyond its proposed sale of SouthGobi Resources Ltd.,” Goldie wrote in a note.
Goldie’s target price for SouthGobi is $14.50 and $20 for Ivanhoe.
Comments
Post a Comment