Hi Paul,
The reason I am suggesting that IPM is trading low, in spite of many gold stocks being at or near their 52 week low, is that I do not view IPM as a "traditional" gold stock. By definition, most of the gold stocks that have been affected directly, by the price of gold are producers, especially at the higher end. IPM is an emerging producer, with advanced and early stage exploration projects. Actual production of their Mount Polley mine is scheduled to commence in August of this year. This portfolio has left them a little less vulnerable to the decreasing price of gold and even allowed for real and potential share price increases over the past 4 months.
I am not sure if you have had an opportunity to review the entire IPM thread, but Roman de Guzman and Bobby Yellin have done some great footwork and research on this stock. I will list some of the more significant points for your review:
- IPM is an emerging Au/Cu producer involved with Sumitomo Corp (45%), in developing the Mount Polley Mine near William's Lake, B.C. Estimated cash costs are US $201/oz with Cu credits of US $1/lb. and a Canadian dollar valued at US $ 0.75.
- Advanced exploration properties include the Midway Ag/Pb/Zn deposit in Northern B.C., and the Giant Copper Au/Ag/Cu deposit near Hope, B.C.
- Promising early stage developments include the M'Banga gold play in West Africa, as well as, several other properties (Au/Cu) in British Columbia.
- IPM owns 40% of Cathedral Gold (T.CAT), a junior exploration and development play holding a 90% interest in the Sterling Gold mine near Beatty, Nevada. CAT also has exploration projects in Guyana, Honduras, The Battle Mountain Trend in Nevada, as well as, the Porcher Island property near Prince Rupert, B.C.
- IPM holds a 60% stake (9 M shares) of Colony Pacific (T.CYX) which has enjoyed a tremendous increase in share price over the past year. This has been a result of their joint venture with Inco on the Indonesian island of Sumatra. Early "grab-samples" have shown potential for a tremendous gold play. But it is important to note that this is still speculative.
- Of the 57 M issued shares, approximately 50% are held by management. I believe Murray Edwards holds approximately 32% himself.
Finally Paul, IPM is a stock that has not been hyped and/or promoted to exhaustion. It is my opinion, that considering IPM's current assets at Fair Market Value, the income earning potential of Mount Polley, as well as, their emerging and developing properties (stable relationships) the current share price is a bargain. I believe I had figured that the contribution from CYX alone would add approximately $1.22 to IPM's share value (again, I am cautious to note that CYX will remain somewhat speculative to myself until core samples confirm).
I think if you do your due diligence on this one you will be pleasantly surprised. As Roman posted some time back "this one won't take you out". Best Regards and Happy Investing,
Mike |
