March 5, 2013 / 8:13 PM / 4 years ago

PDAC-Mining legend Friedland looks to burnish his image

6 Min Read

TORONTO, March 5 (Reuters) - Leave it to the irreverent Robert Friedland to brighten the mood of a mining conference in the throes of a deep, collective depression.

The outspoken financier, known for his talent for picking winners in a risky business, made a rare public appearance on Monday to trumpet his latest venture, Ivanplats Ltd.

It was a star turn by a man apparently unburdened by self-doubt or any lack of confidence in the industry's resilience.

Friedland's company, one of a handful of initial public offerings in the mining industry last year, owns South Africa's Platreef, a project rich in platinum, palladium, gold, rhodium, nickel and copper.

Ivanplats owns the "largest mechanizable, ethical precious metal discovery in the world," Friedland said at the Prospectors and Developers Association of Canada convention in Toronto, promising that the geological nature of the deposit would allow for more humane working conditions than those in rival South African mines.

"We've discovered something that is very good," he said, "We're quite confident that the nickel and copper values are double what we would need to recover, gold, platinum, rhodium and palladium at a negative cost."

Friedland's sheer enthusiasm seemed out of step with the predominant mood at this year's PDAC, where talk has often focused on the dearth of financing for mining projects amid cost overruns, multi-billion dollar writedowns and stagnant metal prices.

Friedland sees a big opportunity for Ivanplats to fill a coming void in the market, with the majors hunkering down and shelving major projects after several ousted their CEOs.

"We're in a world where all of the CEOs of major miners have had their heads cut off ... So these major mining companies are now being run by people who are inherently risk averse," said Friedland. "That means there is going to be less metal around in five years."

Friedland, who also gave the keynote address at the Canada-Southern Africa Chamber of Business on Tuesday, vowed that the industry would emerge from its funk, as the rise of mega-cities around the world drives metal demand.

"The whole planet Earth is going urban," he said.

Living Legend

No matter how controversial his remarks, Friedland's reputation alone wins him a ready audience.

Now 62, Friedland, made a name in 1996 by selling a then-undeveloped Canadian nickel-copper project called Voisey's Bay for C$4.3 billion ($4.2 billion).

He solidified his near-legendary status within the mining industry with Ivanhoe Mines, a vehicle he used to promote and build the massive Oyu Tolgoi copper-gold mine in Mongolia. Last year, mining giant Rio Tinto acquired a majority interest in Ivanhoe, now called Turquoise Hill Resources.

That deal allowed Friedland to concentrate on Ivanplats, taking it public in 2012 in one of the most closely followed IPOs of the year. The partial offering, which raised about C$300 million, pegged the value of Ivanplats at over C$2.5 billion.

The Chicago-born billionaire is known almost as much for his showmanship as for his track record in spotting the potential of some of the world's biggest deposits.

In keeping with style, Friedland peppered his convention speech with jocular asides and digs at other mining companies.

"I remember Bre-X quite well," said Friedland, referring to a multibillion-dollar mining scam during the 1990s. "It was a 100 million ounce deposit, but (Platreef) is much bigger than that and it has the distinct added advantage of being real."

Friedland, a Boston-area native who now lives in Singapore, said Platreef contains some 75 million to 100 million ounces of precious metals.

"Ethical Platinum"

He said Platreef was superior to some of Anglo American Plc's costly, deep underground platinum mines, where critics say that extreme heat and a cramped environment make working conditions difficult.

"Anglo is like a man with one foot in a bucket of ice and another foot in a bucket of hot coals," he said, suggesting the rival South African miner faces a dilemma in trying to sell platinum produced under such conditions. In addition to jewelry, platinum is used to make catalytic converters for cars.

"If you're the Toyota Motor Company, you can't sell a yuppie a Prius in California based on this activity," said Friedland. "You already have the concept of ethical diamonds ... similarly we now have the concept of ethical platinum, so this is going the way of the dodo bird."

Friedland has promised that Ivanplats will shake up the mining sector, as the Platreef operation can be fully mechanized and would not require thousands of workers to work in inhospitable conditions deep underground.

The Platreef project is 90 percent owned by Ivanplats. A consortium of Japanese companies paid about $290 million to acquire the remaining 10 percent.

Copper Bonanza

Friedland also praised Ivanplats' Kamoa copper project in the Democratic Republic of Congo, which he believes could turn out to be the "richest copper discovery in the world."

"This little puppy is only a couple of years old and it is quite a spirited little discovery, and it is definitely a candidate to surpass El Teniente," he said, referring to Chilean miner Codleco's massive underground copper mine.

Despite the attributes of Ivanplats' projects and Friedland's promotion skills, the company's shares have not escaped the downdraft that has weighed on the mining sector this year. Ivanplats shares, which rose as high as C$5.45 early this year, have fallen back to C$4.09 a share.

Friedland said Ivanplats is now "scheming" on ways to push its share price higher, hinting that the company may explore a deal to sell a small stake in Kamoa - potentially boosting its valuation.

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