Ivanhoe says Oyu Tolgoi copper/gold mega project negotiations will resume in Mongolia
Ivanhoe Mines said Thursday that the company anticipates that the negotiations of the Oyu Tolgoi Investment Agreement will resume after the first session of the Mongolian Parliament begins.
Posted: Friday , 15 Aug 2008
RENO, NV -
Despite the turmoil of the June 29th national election in Mongolia which resulted in five deaths and hundreds of injuries, Ivanhoe Mines said Thursday it believes the negotiation of the Oyu Tolgoi Investment Agreement will resume after a new cabinet is appointed and the first session of Parliament begins.
Meanwhile, Ivanhoe reported a net income of $127.5 million or 34-cents per share for the second-quarter 2008, compared to a net loss of $74.2 million (negative 20-cents per share) in the second quarter of 2007.
Results for Q208 were impacted by $7.5 million in general and administration expenses, $2.5 million in accretion expense and $4.2 million in interest expense and $9.2 million in income from discontinued operations. Ivanhoe recorded a gain of $201.4 million the sale of its 42 % interest in Jinshan Gold Mines in May 2008
Inflation and mining rights were major issues in the July 2008 elections. The goal was to elect a government with enough seats in Parliament to ratify amendments to Mongolia's Mineral Law and approve the Oyu Tolgoi copper and gold mega-project investment agreement.
Both the Mongolian People's Revolutionary Party (MPRP) and the Mongolian Democratic Party said they support the investment agreement, which would increase the GDP of Mongolia by 34%. The MPRP was believed to have won a majority of the seats in Parliament.
Desjardins Securities Analyst John Redstone suggested that Ivanhoe Mines and its partner Rio Tinto should reach a deal with the Mongolian government in the next six to nine months, which would allow the mine to come online in 2012.
In their financial results published Thursday, Ivanhoe said that consideration of revisions to the Minerals Law is expected to be on the agenda for the new Parliament later this year. Ivanhoe said it was optimistic that discussions which began with the Prime Minister and members of the former cabinet before the election will continue once the new government takes office and the review of the Minerals Law is completed.
Meanwhile Ivanhoe Executive Chairman Robert Friedland said SouthGobi Energy Resources and Ivanhoe Australia have achieved notable milestones as SouthGobi prepares to make its first export shipments from the Ovoot Tolgoi open-pit coal mine to China.
On July 13, 2008, SouthGobi announced that Ovoot Tolgoi's West Field now contains measured plus indicated coal resources of 193.2 million tonnes. The West Field resource estimate, combined with the resources in the South-East Field, brings total Ovoot Tolgoi surface resources to 258.9 million tonnes of measures and indicated coal resources.
In the meantime, Ivanhoe Australia competed a A$125 million IPO on August 5th. The offering, which was heavily supported by U.S, Canadian and Asian investors, raised capital for the exploration and development of its iron-oxide copper-gold discoveries in the Mount Isa-Conclurry mineral district in Queensland.