Don't think I'll go for this one, but I'm a bit tempted by the opportunity presented by the Cap Raising announced today, following a trading halt since Monday. They've taken in $118m from Insts and will follow up with a $30m Share Purchase Plan. Prior to this they had no debt to speak of and held $159m cash reserves. Most of this monster pot they are predicting will satisfy all their 30% share of current cost for the mega Tropicana gold project. Joint Venturer is AngloGold Ashanti which holds 70% and is project manager. So cap raising was at $4, which will be the SPP price, and share price today has dipped to $4. Buying IGO also means exposure to their nickel operation, and nickel not top of the pops lately. But Tropicana has resource of 6.4m ozs gold and an open pit mining reserve of 3.9m ozs at grade 2.16g/tonne. So to IGO that's over 1m ozs of open pittable gold at what seems a robust grade for that kind of mining. The mineral resource is significantly larger at 6.4m ozs grading 2.26g/t The nickel operation has been far from a lame duck - just that its margin has been languishing the last few years. The following 10 yr record of return on equity shows how good its been when nickel is hot: Return on equity(%) -35.9 11.4 56.2 42.8 73.0 102.4 26.7 11.8 13.4 3.2 At $4, the company is trading at about book value. I'm not a holder of IGO, and this is not a recommendation - just speculating.
They have a pretty reliable Nickel finding device that could be modified for other things, diversified miner who pays dividends - could be a good buy. Major risk is, base metal prices tied to asian growth. Im not 100% sure what the fundamentals for Nickel are.
Haha, a good will and impairment write-down of $158m for the acquired Jabiru zinc/copper/silver mine. An abysmal failure of an acquisition. Yet the share price still hasn't fallen below the December placement and SPP of $4 and they have ~$240m net cash to meet all expected construction and development costs of the Tropicana Gold Project (Independence 30%, AngloGold Ashanti 70%) Montgomery Skaffold valuation for IGO is only $1.62, 2.14, and 3.59 for years F12, F13, F14. Quality and Performance rating of B4. SUMMARY OF HALF-YEAR RESULTS Cash and cash equivalents of $262.2M Revenue from operations of $105.6M Cash flow from operations of $9.8M Earnings Before Tax, Depreciation, Amortisation and Impairment of $11.4M# Underlying Net Loss After Tax of $6.9M # Impairment of Assets of $66.7M Goodwill write-off of $91.1M Net loss after tax of $144.6M
