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Former Inco CEO Hand Studying C$100 Million Canada IPO for Nickel Venture
Royal Nickel Corp., chaired by former Inco Ltd. Chief Executive Officer Scott Hand, is studying a Toronto initial public offering of as much as C$100 million ($97 million) as early as October.
“We need to move to the next stage of financing so we’ve talked to pretty much every banker you could think of in Toronto,” CEO Tyler Mitchelson, 41, said today in a phone interview from Toronto. “Our intent is to be prepared and be ready to go public mid-October.”
Royal Nickel, based in Toronto, needs funds to build the $1.5 billion Dumont nickel mine in Quebec, where output may start in 2014. The company is also talking to strategic investors, including major nickel producers in China, to help fund mine development studies, Mitchelson said.
“It will be one of the biggest single nickel mine operations in the world when it comes on-stream,” Hand, 68, who was CEO of Inco when it was bought by Brazil’s Vale SA for about C$19.4 billion in 2007, said in a July 23 phone interview. “We have a lot of people who would like to help us finance the next stage, whether it be private or public.”
The Dumont project was discovered in 1939 and Royal Nickel is studying production of about 48,000 metric tons of nickel a year, said Mitchelson, a former executive at Vale SA’s Inco unit, where he worked for 15 years.
The company plans to appoint a banking syndicate to manage the IPO, seeking C$60 million to C$100 million, as early as next week, he said, adding a London listing is unlikely.
“There’s definitely an appetite from a lot of the institutional investors in Canada and some of the funds in Canada that they’d like another mining house to invest in,” he said. “So we’ve got a lot of support from these guys.”
To contact the reporter on this story: Jesse Riseborough in London at jriseborough@bloomberg.net
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