The last time IVA traded at these levels was late 2009 (the height of the GFC) when copper prices had fallen some 60% below what they are today (about $3,000 per tonne). From that low point of 14c the stock soared to just under $4 per share in less than 12 months on the back of it's moly/rhenium discovery.
Todays copper price is trading at the bottom of a 3 year trading range and yet during this same period we have seen the market value of IVA fall from over 1.5 billion to under 100 million today.
If you believe todays price represents 'fair' value you will also believe the following :
All current mine operations, production and inventory is valued at zero dollars. All current mine leases are valued at zero dollars. All previous exploration & development work is valued at zero dollars. All cash in the bank is valued at zero dollars. All current and future mineral reserves are valued at zero dollars.
Finally, all property, plant & equipment is valued at a 50% discount to balance sheet.
That is the reflection of the current share price.
IVA is in the early stages of production with 2 sites operational. There was always going to be a blowout in costs per tonne during the ramp-up phase as per any mining operation and this situation can only improve as time goes on. Copper prices in historic terms are still reasonably high and the AU dollar has been strong for many years now but looks like its beginning to weaken.
Rationality and fair value have nothing to do with todays share price since it is firmly in the control of a few, and until their agenda has played-out that is the way things will remain.
Ultimately there will be big winners and big losers.
IVA Price at posting:
14.0¢ Sentiment: LT Buy Disclosure: Held
