Billionaire hires Credit Suisse to list ‘cursed’ Kazakhstan gold mine

mineral resources

Billionaire hires Credit Suisse to list ‘cursed’ Kazakhstan gold mine

By SRI ⋅ May 12, 2008 ⋅

Robert Friedland, the Canadian billionaire, has appointed three banks led by Credit Suisse to organise a London and Toronto float for a Kazakhstan gold mine known in the City as “the curse” in London and Toronto.

The initial public offering valuing the Bakyrchik mine at $1bn-plus is welcome news for the Kazakh government following the failure on Friday of two of the country’s biggest miners to agree a deal that would have created a national champion. The deal collapsed when Kazakhmys rejected a £7bn offer from fellow FTSE-100 miner Eurasian Natural Resources Corporation (ENRC), branding it “derisory”.

Mr Friedland is determined to take advantage of the soaring gold price – nearing $900 (£461) an ounce last week – and his company, Ivanhoe Mines, wants to raise at least $200m by listing the east Kazakhstan mine in both Canada and the UK. This would represent 20 per cent of the company, diluting the shareholdings of Ivanhoe and its three Kazakh private sector partners.

Credit Suisse has been joined by Bank of Montreal and Canaccord Adams to organise the listing for the third quarter of this year. Mr Friedland had previously approached HSBC, CIBC World Markets and Morgan Stanley, but at least one of the banks was concerned by Bakyr-chik’s long history of problems.

Mr Friedland has owned Bakyrchik, which is the main asset of a joint venture called Altynalmas, since 1996 when he risked $65m on its potential. Bakyrchik’s nickname emerged as chemical difficulties caused Ivanhoe to struggle to extract the eight million to 14million ounces of gold reserves, which a source claimed would make it the largest gold mine to emerge from a former Soviet Union state.

By Mark Leftly (The Independent)