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Friedland’s Ivanplats May Raise Up to $333 Million in IPO

Friedland’s Ivanplats May Raise Up to $333 Million in IPO
Robert Friedland built up Oyu Tolgoi amid disputes with joint venture partner Rio Tinto and the Mongolian government. Source: Ivanhoe Mines Ltd. via Bloomberg

Ivanplats Ltd., a mining company founded by billionaire Robert Friedland, plans to raise as much as C$327.2 million ($333 million) in an initial public offering to develop mines in Africa.

Ivanplats, based in Vancouver, plans to sell 60.6 million shares in Toronto for C$4.50 to C$5.40 apiece, according to sales documents obtained by Bloomberg News. The pricing of the IPO is expected Oct. 15, according to the document. A spokesman for the company couldn’t immediately confirm the terms.

The sale will help fund Ivanplats’ African projects and provide equity for convertible bondholders before rates on the debt jump to almost 19 percent on Nov. 10, according to a preliminary prospectus. Friedland is selling equity in Ivanplats about five months after losing control of the $6 billion Oyu Tolgoi project in Mongolia to Rio Tinto Group.

Friedland, 62, is studying the feasibility of developing the Kamoa copper deposit and the mothballed Kipushi copper-and-zinc mine in the Democratic Republic of Congo and the Platreef platinum discovery in South Africa, according to the prospectus.

Ivanplats still owes money to Dan Gertler, an Israeli mining investor, for Kipushi and will pay him as much as $105 million if the IPO raises at least $250 million, according to the prospectus. Ivanplats must still pay $85 million by Dec. 14 even if the share sale doesn’t go ahead as planned.

$2 Billion Project

Ivanplats estimates that the Kamoa project in Congo’s southern Katanga province, the center of the country’s copper industry, will cost about $2 billion to develop, according to the prospectus.

The Platreef platinum and nickel project, 280 kilometers (175 miles) northeast of Johannesburg, is in South Africa’s Bushveld mining complex.

Friedland built up Oyu Tolgoi amid disputes with joint venture partner Rio Tinto and the Mongolian government. Now he’s proposing a mining development in Congo, whose government seized copper assets from Canada’s First Quantum Minerals Ltd. in 2010, and in South Africa, where the mining industry is convulsed by labor unrest.

Ivanplats’ board of directors includes Cyril Ramaphosa, chairman of South Africa’s Shanduka Group Ltd., and Marc Faber, author of the Gloom, Boom & Doom report, the prospectus shows. Lars-Eric Johansson is chief executive officer.

Ivanplats may be the third-largest Canadian mining IPO since at least 1999, according to data compiled by Bloomberg. Franco-Nevada Corp. raised $1.26 billion in a 2007 initial offering while Tahoe Resources Inc. sold $365.4 million in its IPO in 2010.

Bank of Montreal is leading a group of underwriters including Morgan Stanley, Macquarie Group Ltd. and Royal Bank of Canada, according to the sales documents.

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