‘Friedland envy’ haunts Diggers & Dealers

KALGOORLIE, 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 Mining Forum in Kalgoorlie, as to whether he will turn up or not.

This year the executive chairman of Ivanhoe Mines (IVN-T, IVN-N) came, drew a full house and then vanished out the back door to board his jet for Melbourne, leaving the local media once again hung out to dry.

The big media contingent from what is called the “chook pen” (an Australian expression for a chicken 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 outlined the multimillion-dollar advances in the development of Ivanhoe and Rio Tinto’s (RTP-N, TIO-L) huge Oyu Tolgoi copper-gold project in Mongolia, but it caused little excitement.

Neither did the new line on the grand Mongolian coal project of Ivanhoe’s associate company, SouthGobi Energy Resources (SGQ-V, SGQRF-O), seem to sway the masses. Calling Ovoot Tolgoi the “Beluga caviar of coal,” Friedland said Australian coal miners should be worried because the deposit’s proximity to China would give SouthGobi a big share of the market.

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.

Delegates may have been a little envious of Friedland’s ability to raise A$125 million on international markets to launch Ivanhoe Australia (IVA-A) in early August as a A$2 par stock — 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 most IPOs — which only seven months ago were listing at a rate of up to three a week. Raising more than A$5 million for anything right now is considered by many an impossible dream.

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

In May, Ivanhoe Australia bought a 19.9% stake in its jointventure partner at its Queensland copper-gold projects, Exco Resources (EXS-A), prompting speculation that it could be a takeover target.

Friedland and his team were in Melbourne the day after his presentation for the August 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$1.80.

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