Shares in Ivanhoe mines closed up just over 5% in Toronto on Monday outperforming the broader market and bringing the counter's gains to 23.2% over the last week.
At a time when many miners across the developing world struggle to preserve their social licence, the impact of Ivanhoe's Oyu Tolgoi on the people of Mongolia stands in stark contrast: the mine will contribute a third of the country's GDP when it goes into full operation, will be mined until at least 2060 and increase the average earnings of Mongolians by 60% according to a new CNN report.
On a generally positive day on the markets, Ivanhoe Mines added 5.08% to $21.10 on the Toronto bourse, bringing its market value to $14.99 billion. MINING.com reported earlier in August that Vancouver-based Ivanhoe’s chief executive officer and founder Robert Friedland told a group of investors that Ivanhoe is worth at least double the $15 billion valuation the market is affording it.
CNN has a new video report headlined 'Minegolia' on the construction of the Oyu Tolgoi or Turquoise Hill mine and quotes one herder: "We think we can work at the mine and take care of our herds. My three children will get a chance to go to school and have a better education."
With 11,200 construction workers on site and another 3,500 in training the mine is now one-third built and will cost a total in excess of $5 billion. Ivanhoe recently started pre-stripping of the open-pit that will mine the gold-rich Southern Oyu and Central Oyu deposits.
Asia Miner quotes Friedland: “The recent sharp increases in gold and silver prices have reinforced the importance of having a multi-commodity deposit such as Oyu Tolgoi.”
Oyu Tolgoi’s average annual metal output during the first 10 years of commercial production is expected to exceed 650,000 ounces of gold, 3 million ounces of silver and 1.2 billion pounds of copper. The estimated annual contribution of gold and silver to total revenue in the first five years of production from the open-pit mine will average 44%, with a peak of 53%.
Last week world number three mine Rio Tinto raised its stake in Ivanhoe by 2% to 48.5% paying C$18.98 a share and exercising its subscription right of C$529.5 million.
MINING.com reported at the end of July not every mining project in Mongolia is going smoothly and that state-owned Shenhua, the leader of a joint Chinese, Mongolian, Russian, and US consortium awarded the western block of Mongolia's Tavan Tolgoi coking coal field – the world's largest – faces a rocky road ahead to bring the project to fruition.
And the multi-lateral nature of the development deal – the parties have not said how they would work together – creates problems for the country hoping to raise $4 billion – $5 billion when Tavan Tolgoi is privatized next year.