Vancouver miner Ivanhoe Mines Ltd. (TSX:IVN) is considering spinning a more well-financed mine asset in South Africa off into a separate publicly traded company, a move aimed at freeing up assets for its more financially challenged assets in the Democratic Republic of Congo.
Ivanhoe is working to develop a platinum-palladium-gold-nickel-copper mine in South Africa.
Meanwhile, it also is trying to develop two separate copper and zinc mines in the Democratic Republic of Congo.
In a recent management discussion and analysis, the company said that, without some new funding sources, it “does not have sufficient funds” to proceed with all of its plans to develop the three African mines according to its original timelines. Unless it finds the funds it needs by June, the company reported it could not meet all of its objectives.
It got reported in the press that the miner would not be able to move forward to develop its African mines if it did not have additional funding by June of this year. Ivanhoe CEO Robert Friedland issued a press release May 16 stating that is not the case.
He said the company’s plans to continue work on its Kamoa copper discovery, the zinc-copper Kipushi assets in the DRC are not an “all-at-once, or not-at-all, proposition.”
In other words, the company plans to move ahead with all three of its African projects – it just might not be able to do so as originally planned, on its original timelines, unless it can find new funding sources by June.
It is considering “sales or joint ventures,” and a variety of debt and equity options to find that additional funding.
The company is considering hiving off its Platreef assets in South Africa into a separate company.
The platinum-palladium-gold-nickel-copper deposit is more well-financed than its two DRC assets, a company source told Business in Vancouver. A Japanese consortium of companies has invested $290 million for a 10% stake in that project.
Since that money is earmarked for that project and that project alone, Ivanhoe is considering spinning it off into a separate company.
Ivanhoe shares were down 10% to $1.62 mid-day May 16.
