RIO TINTO AND IVANHOE SAY OYU TOLGOI MINE IN MONGOLIA IS A WINNER

MONGOLIAN GOLD MINE WORTH A LOT OF MONEY
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Speaking at the Diggers & Dealers conference in Kalgoorlie Australia, Robert Friedland, executive chairman of Ivanhoe mines made big claims for the new mine his company is constructing in Mongolia together with major shareholder Rio Tinto.

Oyu Tolgoi is now one third complete and on track to produce more than 1.2 million pounds of copper and 650,000 ounces of gold each year and, according to the brash Canadian, would have a life of more than a century.

Oyu Tolgoi will also help turn Mongolia into the world’s fastest-growing economy with staggering GDP growth of 35%. Just to make sure no-one has any misconceptions of the grand scale of the project Friedland boasted that Oyu Tolgoi has 14,200 builders, easily overshadowing the largest construction project in the US, the new World Trade Center with only 2,300. And just to top things off he said Ivanhoe is worth at least double the $15.6 billion valuation the market is affording it at the moment.

The Australian quotes Friedland as saying the company is spending about $US75 per second in the development of the mine adding that this equated to about $US9 million ($8.3m) a day.

London South East reports Friedland believes the project is being undervalued: based on the 1.4 times net asset value that top gold miner Barrick Gold paid for copper miner Equinox Minerals earlier this year, Ivanhoe would be worth between $34 and $46 a share.

Ivanhoe last changed hands at $23.87 in early morning trade in Toronto on Wednesday. The stock has a market valuation of $15.6 billion and had been trading in a relatively narrow range this year with net gains in 2011 of just under 4%

Sourced & published by Henry Sapiecha

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