“Friedland envy” haunts Diggers & Dealers

Perth, Western Australia — Over the past five years, master entrepreneur Robert Friedland has created a guessing game at Australia’s biggest mining conference, the Diggers & Dealers Forum in Kalgoorlie, and that is whether he will turn up or not.

This year the executive chairman of Ivanhoe Mines (IVN-T, IVN-N, IVN-Q) came, drew a full house and then vanished out the backdoor to board his jet for Melbourne, leaving a still-uneducated media in terms of the “Friedland factor” once again hung out to dry.

The big media contingent from what is called the “chook pen”* had waited out front of the Goldfields Art Centre to catch him, after they discovered he was refusing them a group interview — a custom for key speakers.

It seems journalists are no longer Friedland’s favourite people and he told delegates that newspapers were only good for wrapping three-day-old fish.

Back in the auditorium, Friedland had illustrated the multimillion-dollar advances in development of Ivanhoe and Rio Tinto‘s (RTP-N) huge Oyu Tolgoi copper-gold project in Mongolia, but it caused little excitement.

The new line on his grand Mongolian coal project also did not seem to sway the masses, after he said Australian coal miners should be worried because the deposits of Ivanhoe’s associate company, SouthGobi Energy Resources (SQQ-V, SGGRF-O), were close to China and would take a big market as this was the “Beluga caviar of coal.”

Ivanhoe Mines was launching its Australian listing Ivanhoe Australia (IVA-A) with all its copper-gold projects in Queensland, and had taken a 19.9% stake in joint-venture partner Exco Resources (EXS-A), so would it be a takeover target?

Diggers & Dealers was held during a negative phase for the Australian bourse, with many resource stocks staggering through softening commodity prices, diminishing investor confidence and some ordinary profit performances.

During the three-day program the Australian dollar slumped against the American greenback, and the gold price — an important barometer in Kalgoorlie — dived about US$70 per oz.

If anything, many delegates were envious of Friedland’s ability to raise A$120 million on international markets to launch Ivanhoe Australia as a A$2 par stock, and giving those investors only a 20% stake in the company.

The market malaise that has hit the mid-tier and junior resources sector has closed the door for IPOs that were listing at a rate of up to three a week seven months ago.

Raising more than A$5 million for anything is considered by many today to be an impossible dream.

Friedland and his team were in Melbourne the day after his presentation for the debut of Ivanhoe Australia on the ASX.

The shares traded down to A$1.56 on its first day and have since traded up to A$1.67.

There is no doubt cashed-up Ivanhoe Australia will have many joint-venture partners and distressed explorers knocking on its door.

* An Australian expression for a chicken pen.

–The author is a freelance journalist based in Perth, Western Australia.