Lets go Bobby!! Robert Friedland’s latest mining venture has made it to the public markets, but after encountering an extremely hostile macro environment, priced its offering at the bottom end of its range.
Vancouver-based Ivanhoe Electric Inc. sold its initial public offering at US$11.75 a share, raising US$169.1-million.
The shares started trading on Tuesday on the New York Stock Exchange and the Toronto Stock Exchange.
Ivanhoe Electric intends to use part of the proceeds to fund exploration at its copper development properties in the United States.
Just over a week ago, as the company made its final rounds to investors in order to lock in orders, it had targeted selling shares as high as US$12.50 apiece.
Ivanhoe Electric is launching into one of the worst markets in recent memory. Over the past few weeks, global stock markets have corrected into bear market territory, as fears grow that a global recession is imminent with central banks spiking rates in an attempt to rein in runaway inflation. Copper, the metal that Ivanhoe Electric is most exposed to, has also gotten crushed.
The IPO also got slammed by CNBC’s Jim Cramer, who urged viewers to stay away from it, saying this is not the time to bet on an extremely early stage copper company. Mr. Cramer, a former hedge fund manager and self-described clown, has a mixed record in long-term stock picking. Wharton researchers found that over a 17-year period, his stock picks produced an annualized return of just over 4 per cent compared to a 7 per cent gain by the S&P 500.
The Ivanhoe Electric IPO is the biggest in the United States since May and showcases once again the ability of Mr. Friedland to raise money no matter what the market.
Mr. Friedland is one of Canada’s best known financiers of early stage mining companies. Some of his companies have performed spectacularly well, while others have disappointed. He sold his Voisey’s Bay nickel project, which he discovered in the 1990s, to Canada’s Inco for $4.3-billion. Voisey’s is still producing today.
Mr. Friedland is also credited with discovering the vast Oyu Tolgoi copper project in Mongolia. Global mining giant Rio Tinto eventually developed the mine but had struggled mightily with the project, going billions over budget and encountering myriad technical problems.
In recent years, Mr. Friedland has built Ivanhoe Mines Corp. IVN-T from a development stage company into a major copper producer. Funded in large part by the Chinese, Ivanhoe put a large copper mine into production in the Democratic Republic of the Congo last year.
The IPO was led by BMO Nesbitt Burns Inc. and Jefferies.
https://www.theglobeandmail.com/business/article-robert-friedlands-ivanhoe-electric-pushes-through-hostile-macro/