Friedland: Mining companies ‘priced for Armageddon’ – by Lesley Stokes (Northern Miner – August 18, 2015)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

VANCOUVER — The vanguard executive chairman of Ivanhoe Mines (TSX: IVN; US-OTC: IVPAF), Robert Friedland, took to the stage at the Sprott Natural Resource Symposium in Vancouver in late July, and delivered a relaxed speech discussing why he believes copper is set to rebound in two to three years.

“The further you push the price down, the higher it’ll bounce,” he said, predicting that higher environmental standards in China may strengthen the demand for copper, in tow with other “green” metals such as zinc, platinum and palladium.

He said that China will “try very hard” to double its growth to 6% or 7% through sustainable development, but he’s dubious whether the current world supply will match the metal needed to clean China’s air and fertilize its soils.

He describes many of the great copper mines as “little old ladies, kept on life support and waiting to die,” whereas others are so low grade “they’re practically mining air” and kept alive by favourable currency exchange rates.

Add that to the “enormous” amount of debt the major mining companies have been laden with over the past decade, and he doubts whether many of the capital-intensive mines of the future will get built at the current copper price of US$2.38 per lb.

Unless, he says, it’s a world-class, high-grade, potentially low-cost producer such as Ivanhoe’s Kamoa copper deposit, 25 km west of Kolwezi, in the Democratic Republic of the Congo.

The greenfield discovery turned monster resource is currently under development in partnership with Chinese-owned Zinjin Mining Group.

The mine is estimated to have a 30-year life with indicated resources of 739 million tonnes grading 2.7% copper for 43.5 billion lb. copper, and inferred resources of 227 million tonnes grading 1.96% copper for 9.8 billion lb. copper, using a 1% copper cut-off grade.

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