Friedland regains control over large chunk of Ivanhoe shares

Ivanhoe Mines executive chairman Robert Friedland in 2014 at the site of the initial Kamoa discovery: Image: Govind Friedland via CEO.ca

Robert Friedland issued a news release on Monday after the market close under Canada’s so-called early warning financial market requirements that he’s regained control over a large chunk of shares in Ivanhoe Mines.

According to the press release issued from Singapore where Friedland is based, the billionaire financier has “regained direction and control” over 25m common shares that were previously pledged as security for a loan. The shareholding is worth C$84m (US$63m) at today’s ruling price.

According to the press release Friedland now effectively controls 14.4% of Ivanhoe Mines:

The 25,000,000 common shares constitute 2.1% of the 1,194,039,162 common shares of Ivanhoe Mines currently issued and outstanding.

Mr. Friedland’s controlled affiliate, Newstar Advantage Ltd. continues to be the registered owner of 135,570,260 common shares (which includes the 25,000,000 common shares released from the pledge by the Lender and over which Mr. Friedland now exercises direction and control) and Mr. Friedland continues to directly own 34,454,717 common shares, which in aggregate total 170,024,977 common shares, representing in aggregate approximately 14.2% of the common shares currently issued and outstanding.

Mr. Friedland also may be deemed to own 2,525,000 common shares issuable on exercise of previously granted options, and as a result may be deemed to own, in aggregate, 172,549,977 common shares, representing approximately 14.4% of the 1,196,564,162 common shares then issued and outstanding on a partially-diluted basis.

Shares in Ivanhoe Mines were down 2% in regular trading on the Toronto Stock Exchange affording the company with advanced projects in the Congo and South Africa a $4.1bn market capitalization. Two Chinese companies Zijin and Citic Metal own 13.9% and 26.4% in Ivanhoe respectively.

Zijin, China’s No.1 gold producer and Ivanhoe’s partner in the massive Kamoa-Kakula copper deposit in the DRC, first acquired a stake in the Vancouver-based miner in 2015.

Citic Metal followed suit last year, becoming Ivanhoe’s largest shareholder. Its ownership will fall to 26.4% with today’s transaction.

The combined funds from the two Chinese companies, the Vancouver-based miner said at the time, are enough to allow it finance Kakula and Kipushi mines to commercial production, and significantly advance, or achieve, production at the company’s Platreef project in South Africa.

Friedland, who made his fortune from the Voisey’s Bay nickel project in Canada in the 1990s, has been working on Kamoa-Kakula for ten years.

The mining legend believes the project, in which Zijin also owns a 36.9% direct interest, will become the world’s second-largest copper mine.

According to an independent pre-feasibility study (PFS) released in February, if all phases are completed the operation is expected to reach peak annual production of more than 700,000 tonnes of copper.

Initial production from the Kakula mine, the first of at least three copper mines planned at Kamoa-Kakula, is scheduled for late 2021.

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