Send an Email
Favourite Sites
  • Whitney Tilson
  • Recommended Booklist

  • Favourite Blogs
  • Calculated Risk
  • Reflections on Value Investing
  • "The market can remain irrational longer than you can remain solvent" - John Maynard Keynes

    Monday, March 28, 2005


    Ivernia ( is buying out Sentient's minority interest in the Magellan mine

    Ivernia, which I wrote about here and here. Announced today that they are buying out the 49% interest held by their partners in the Magellan mine. Assuming the purchase was made entirely with cash it would add about 35% to IVW's net worth. As the purchase will be made (I'm assuming) using equity it adds about 15% to IVW's net worth. The news release does say that IVW will be paying for part in cash, but that almost certainly means selling equity and then paying in cash using the equity proceeds.

    All in all, I estimate IVW's net worth after the transaction at around 2.70 CAD per share which has about 33% price appreciation with lead at .4475 per lb (which were the assumption in my most recent run of the model with IVW as a 51% owner). This will provide a little more upside leverage to lead prices also.

    The key determinate to the upside of the acquisition will be the price that the equity is issued at. If it is issued at $2.05 then there is 17% accretion, at $1.8 it is closer to 14%.

    My model has the mine only recovering 1.1bn pounds. If in fact that recover closer to the 2.2bn pounds in proven and probable. Then the acquisition is much more accertive, as IVW is getting a decent deal assuming the current mine plan. If there are more ounces mined (and this applies even more so, if they are mined sooner) then the deal gets even better for Ivernia.

    A good move by management and possibly a great move if we hear about upgraded reserves and a new mine plan in the near future!
    Comments: Post a Comment

    << Home


    April 2003   May 2003   June 2003   July 2003   August 2003   September 2003   November 2003   January 2004   February 2004   March 2004   April 2004   May 2004   June 2004   July 2004   September 2004   October 2004   February 2005   March 2005   April 2005   May 2005   June 2005   July 2005   August 2005   September 2005   December 2005   April 2006   May 2006   June 2006   January 2007   December 2007   February 2008   April 2008   May 2008   June 2008   July 2008   August 2008   September 2008   October 2008   November 2008   December 2008   January 2009   April 2009   May 2009   July 2009   August 2009   September 2009   October 2009   January 2010   February 2010   April 2010   July 2010   August 2010   October 2010   November 2010   January 2011   February 2011   April 2011   June 2011  

    Disclaimer and Disclosure Analyses are prepared from sources and data believed to be reliable, but no representation is made as to their accuracy or completeness. I am not paid by covered companies. Strategies or ideas are presented for informational purposes and should not be used as a basis for any financial decisions.
    To reduce Spam click here for my email address.

    This page is powered by Blogger. Isn't yours?