7. Ivanhoe Mines (IVN) is an international mineral exploration and development company operating through two subsidiaries. The company has interests in coal resource properties in Mongolia and molybdenum, rhenium, copper, gold and uranium resource properties in Australia. Its principal mineral resource property is the Oyu Tolgoi Project, located in Mongolia.
The company announced said that construction at Oyu Tolgoi is advancing on schedule and on budget, and reached 30.8% level of completion at the end of the second quarter of 2011. Contract negotiations for the supply and sale of copper-gold-silver concentrate produced at Oyu are expected to be finalized in fourth quarter of 2011, with most of the concentrate expected to be delivered to smelters in China. Ivanhoe swung to net income of $0.6 million for the second quarter 2011 compared to net loss of $30 million in year-ago quarter. Revenue more than doubled to $47.3 million year-over-year.
Ivanhoe recently confirmed that Rio Tinto has exercised its subscription right to acquire an additional 27.9 million common shares of the company for total proceeds of $536 million. This raises Rio's stake in Ivanhoe to 48.5% with a total investment of more than $4 billion since October 2006. As of August 24, 2011, the company's consolidated cash balance stands at $1.7 billion.Ivanhoe recently said that gold and silver sales would generate almost 50% of total annual revenue at Oyu Tolgoi during early mining from the gold-rich open-pit mine currently under construction, despite copper being the most important metal at the mine. Revenues from gold and silver will likely lower the average cash cost to produce a pound of copper during the first five years of mining at Oyu Tolgoi. Of the 9 analysts covering the stock, 33% recommend a buy and 44% rate a hold. Data from Bloomberg has analysts forecasting the stock gaining 18.1% to $26.00 in the upcoming 12 months.
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