Gold investors should change their focus says Robert Friedland
Ivanhoe Mines (TSX: IVN) said it is trying to "unlock value" from Platreef, the company's palladium-platinum-nickel-copper-gold-rhodium mine development project in South Africa.
Ivanhoe Mines' co-chairman, Robert Friedland, noted the recent run-up in PGM and nickel prices.
"While many investors are focused on gold, palladium has been far and away the best performing precious metal for the past several years. The strong, upward price appreciation since 2016 of the collective basket of metals to be produced by Platreef when commercial operations commence at the Tier One discovery is encouraging," said Friedland.
"Given recent transactions in the platinum-group-metals market, we are exploring a number of options that can help us unlock Platreef's incredible value for the benefit of all of Ivanhoe's stakeholders."
A 2017 feasibility study for South Africa-based Platreef projected a cash cost of US$351 per ounce of 3PE+Au, net of nickel and copper by-products, and including sustaining capital costs.
The company said that the feasibility study estimated that Platreef's initial, the average annual production rate will be approximately 219,000 ounces of palladium, 214,000 ounces of platinum, 30,000 ounces of gold and 14,000 ounces of rhodium (combined 477,000 ounces of 3PE+Au), plus 21 million pounds of nickel and 13 million pounds of copper.
The company said its Platreef shaft 1 is at a depth of 950 meters below surface. Completion to a final depth of 1,000 meters is expected by mid-2020.
Ivanhoe Mines indirectly owns 64% of the Platreef Project through its subsidiary, Ivanplats, and is directing all mine development work. The South African beneficiaries of the approved broad-based, black economic empowerment structure have a 26% stake in the Platreef Project. The remaining 10% is owned by a Japanese consortium of ITOCHU Corporation; Japan Oil, Gas and Metals National Corporation; and Japan Gas Corporation.