Comment from Eric Snider:
Published by MAC on 2006-04-12Comment from Eric Snider:
It was revealed earlier this month that mine production from Sabetaung and Kyisintaung pits is expected to less than half of the originally scheduled 36,000 tonnes in 2006.
More interesting is the $120 million price tag that the KRC group is said to be paying for its 25% stake of Ivanhoe's half share in the mine. In its annual report for 2005 Ivanhoe lists its investment in the Monywa operation as having a total value of $140 million.
More believable might be the proposition that the Koreans are willing to make a major investment in the development of the Letpadaung deposit which is the key to the profitable expansion of the Monywa mine and the reason that Ivanhoe got involved in the first place. The original cost of developing Letpadaung was estimated at $390 million, but when there were no takers, Ivanhoe changed its tune and said the project could be done in stages. There were still no takers, whereupon the company talked about developing Letpadaung out of cash flow produced by the other mines in the Monywa operation. Nobody has ever admitted it publicly, but it appears that the military junta has other plans for its share of the profits of the Monywa mine, now that the Japanese merchant banks have been paid off.
Latest: the Monywa mine has resumed production, ending a month-long shutdown caused by a shortage of imported mine supplies.