US copper group Ivanhoe Electric raises $170mn in IPO

Mining magnate Robert Friedland has notched up the biggest US initial public offering since May, raising almost $170mn from the sale of shares in his copper exploration company Ivanhoe Electric.

Overcoming a regulatory delay and a recent sharp decline in metals prices, Ivanhoe Electric priced the sale of 14.4mn shares at $11.75, the bottom of the $11.75 to $12.50 indicated range, late on Monday night.

In afternoon trading in New York on Tuesday the shares were down 4.2 per cent at $11.25, putting a value on the miner over just over $1bn. The shares are also listed in Toronto. Friedland is the company’s chief executive and a 10 per cent shareholder.

Rising inflation and interest rates have sent a chill through the US IPO market with many businesses reversing plans to go public.

Ivanhoe Electric, which has the rights to large copper projects in Arizona and Utah, is one of just six companies to complete an IPO in North America during the second quarter, according to Refinitiv.

The biggest was eyecare company Bausch & Lomb, which raised $630mn in May. Overall just $1.8bn has been raised from new issues in the past three months in North America.

Ivanhoe Electric was set to price its IPO on Friday, but a delay in getting final sign off from the US Securities and Exchange Commission saw the process pushed back until late on Monday.

The price of copper, used in everything from household appliances to electric vehicles, slumped to a 16-month low of below $8,400 a tonne last week as recession fears gripped the market.

Friedland, who is also executive chair of Ivanhoe Mines, is one of the most flamboyant characters in the mining industry and has an almost unrivalled record of discovering big deposits.

These include Oyu Tolgoi, a huge copper mine in Mongolia’s Gobi desert, and the Kamoa-Kakula operation in the Democratic Republic of Congo.

In its IPO filing, lossmaking company Ivanhoe Electric, which boasts the world’s biggest miner BHP as a 5.5 per cent shareholder, said it would focus on developing mines from mineral deposits principally located in the US, “in order to support American supply chain independence and to deliver the critical metals necessary for electrification of the economy”.

“We believe the United States is significantly under explored and has the potential to yield major new discoveries of these metals,” the prospectus said.

The company also said it has developed a cutting edge geophysical surveying technology with a greater range than traditional systems to unlock new mineral deposits.

BMO Capital Markets and Jefferies were lead bookrunners on the IPO.