Saturday, June 25, 2022


IVANHOE MINES LTD COM NPV CL’A’ (OTCMKTS:IVPAF) has been one of our favorites over the past 8 months. IVPAF has been locked in a strong trend with a ton of cash on hand in a powerfully improving gold market. The chart displays a clear and promising lateral consolidation in place since March, coiling up under the $4/share level. Volume has been improving, the MA’s are stacked in the right order and sloped the right way, and the underlying commodity market is strengthening for reasons related to both global liquidity and geopolitical concerns. All of that continues to favor this cash-rich junior bullion play.
As far as recent catalysts, IVPAF just announced that negotiations are underway with government agencies – Gécamines, the state-owned miner and Ivanhoe’s partner at Kipushi, and Société Nationale des Chemins de Fer du Congo (SNCC), the DRC’s national railway company – and potential project financiers to “advance agreements to launch a new era of commercial production at the upgraded Kipushi zinc-copper-silver-germanium mine in the Democratic Republic of Congo (DRC).”
IVANHOE MINES LTD COM NPV CL’A’ (OTCMKTS:IVPAF) bills itself as a company that engages in the exploration, development, and recovery of minerals and precious gems located primarily in Africa.
IVPAF explores for platinum, palladium, nickel, copper, gold, rhodium, zinc, germanium, and lead deposits. Its principal projects include the Platreef project located in the Northern Limb of South Africa’s Bushveld Complex; Kamoa-Kakula project located within the Central African Copperbelt in the Democratic Republic of Congo (DRC); and the Kipushi project located on the DRC’s Copperbelt.
According to company materials, “Ivanhoe Mines is advancing its three principal projects in Sub-Saharan Africa: 1) Mine development at the Platreef platinum-palladium-gold-nickel-copper discovery on the Northern Limb of South Africa’s Bushveld Complex; 2) mine development and exploration at the Kamoa-Kakula Copper Project on the Central African Copperbelt in the DRC; and 3) upgrading at the historic, high-grade Kipushi zinc-copper-lead-germanium mine, also on the DRC’s Copperbelt.”
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As noted above, IVPAF that it is involved in a round of negotiations to advance the potential for serious commercialization of resources located inside the DRC – a notoriously lawless and unstructured political context for production.
Another way to think about this situation, as far as market pricing dynamics for IVPAF, is that the stock surely suffers from a major theoretical discount implied in the value of shares based on assumptions of political risk embedded in the outlook for assets tied to a political structure as unpredictable as the DRC. Hence, any signals that the company may get more traction in establishing the commercial viability of the asset in that context will chip away at that discount, thus advancing shares up the chart.
Put another way, investors are conditioned to assume the worst with a situation like this, which is often a factor that helps foster gains over time.
“The KICO team, which includes more than 390 Congolese nationals, has done a fantastic job in safely upgrading the mine’s underground infrastructure in anticipation of restarting production,” said Mr. Friedland.
“Given the extremely high zinc grades at Kipushi, the mine has the potential to become one of the world’s largest and lowest-cost zinc producers, while also producing significant quantities of copper, silver and germanium. With the current, long-term, bullish market sentiment for zinc, we look forward to working with our partner, Gécamines, prospective project financiers and our team at Kipushi to fast-track completion of the remaining development at the mine.
“Since the PEA was issued in May 2016, we have made major strides towards completing the underground infrastructure upgrading program and we are much closer to achieving our vision of building a world-class zinc operation at Kipushi,” Mr. Friedland added.
At this time, carrying a capital value in the market of $3.00B, IVPAF has a mountain of cash ($291M) on the books, which must be weighed against about $14M in total current liabilities. The company is pre-revenue at this point. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $IVPAF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: We hold no position in $IVPAF, either long or short, and we have not been compensated for this article.

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