TORONTO (Reuters) - Canada’s Ivanplats Ltd, an Africa-focused miner, is pricing its initial public offering at C$4.75 a share and is poised to raise at least around C$300 million ($306 million) from the listing, a source familiar with the situation said on Monday.
Ivanplats, led by one of the mining sector’s most well-known and colorful figures - Robert Friedland, outlined a long-awaited plan to list on the Toronto Stock Exchange in early September.
The company’s main assets include Kamoa, a high-grade copper deposit in the Democratic Republic of Congo; Kipushi, a zinc and copper mine also in Congo; and the giant Platreef platinum, gold and copper project in South Africa.
The pricing of Ivanplats offering at C$4.75 a share comes in slightly above the lower end of the range of C$4.50 to C$5.40 a share that the company was seeking.
The source said the company will file its final long-form prospectus with regulators on Tuesday. The detailed regulatory filing will outline that the share offering may raise as much C$350 million, if the banks underwriting the deal exercise their over-allotment option and sell additional shares to investors.
Ivanplats was not immediately reachable for comment.
The company at one point mulled going public a year ago and raising roughly C$1 billion, according to sources familiar with the situation. But it moderated expectations in light of current market conditions and a bond issue that was done earlier this year.
The euro zone debt crisis, along with a sluggish economic recovery in North America and a pullback in emerging economies has fueled market uncertainty over the last year. This has hurt the fortunes of mining companies and led to sharp declines in share prices of miners.
Investor sentiment though has begun to show some signs of turning in recent weeks, thanks to a brighter economic outlook. The U.S. Federal Reserve recently outlined plans for a third aggressive program to lift the U.S. economy, while China has given the go-ahead to some 60 infrastructure projects worth over $150 billion.
These moves and the launch of the long-awaited Ivanplats IPO have provided a shot in the arm to the Toronto Stock Exchange and the TSX Venture Exchange that together are home to roughly 60 percent of the world’s publicly-listed mining companies.
Mining stocks have now started to bounce back after falling more than 40 percent over the past year and the S&P TSX Metals & Mining Index .GTSX151040 has risen more than 20 percent since July. This has given small Canadian miners - that rely on equity financings to fund their projects - the confidence to attempt to tap equity markets once again, following a year-long hiatus.
Ivanplats itself has said it plans to use the proceeds from its share offering to advance its Kamoa, Kipushi and Platreef projects.
Earlier this year, Ivanplats said it expects to produce platinum at negative cost at its Platreef complex, a move that could well shake up an industry that has been squeezed by stoppages, rising wages and power charges.
($1 = 0.9806 Canadian dollars)
Reporting by Krithika Krishnamurthy in Bangalore; Editing by Chris Gallagher and Muralikumar Anantharaman