Friedland’s son going public with African uranium play
It is awfully tough for a mining company in the beatendown uranium sector to raise money these days. But it doesn’t hurt if the executive chairman has the last name “Friedland.” That’s Govind, not Robert. Govind Friedland’s company, appropriately named GoviEx Uranium Inc., has filed a final prospectus for an initial public offering on the Canadian Securities Exchange. It is a small deal, expected to raise between $1.5 million US and $5 million, with up to 2.3 million shares being issued at $2.15 each.
There are more than 117 million shares outstanding today, though only 24.5 per cent of them will be converted into freely-trading stock following the IPO. Vancouver-based GoviEx will use the proceeds to fund work on its Madaouela project in Niger.
Govind is the son of legendary mining financier Robert Friedland, and he has spent plenty of time working for his father’s companies. But he also made a name for himself with his uranium exploration work in Niger.
Between 2007 and 2011, GoviEx raised roughly $100 million in private funds to pursue uranium opportunities in the West African nation, according to the IPO prospectus. The company attracted big-name investors like Cameco Corp. and Toshiba Corp. in that period.
Govind Friedland is based in Hong Kong and is a graduate of the Colorado School of Mines. He provided business development services to his father’s companies in the Asia Pacific region, and was part of the regional exploration team that made the Voisey’s Bay nickel discovery in Labrador in 1996. He owns 30.5 million GoviEx shares.
“(Govind) possesses a unique multicultural background having lived much of his life in Asia immersed in the mineral exploration industry,” the prospectus says.
GoviEx is trying to raise money during a brutal bear market for uranium.
The sector has fallen far out of favour since the Fukushima nuclear disaster in 2011, and the spot price recently sunk to $29 a pound, the lowest level since 2005. However, industry insiders maintain that the outlook is bright, as demand is expected to outpace supply in the years ahead.
From GoviEx’s standpoint, this is a good opportunity to go public as the Canadian IPO market has picked up in recent weeks. Upcoming offerings include Journey Energy Inc., Kinaxis Inc., and Aurigen Capital Ltd. And investors around the world are excited about the IPO of Alibaba, the Chinese e-commerce giant.
The Madaouela project can produce 2.5 million pounds of uranium a year for 18 years, according to a technical report. But the capital cost to get it into production is a hefty $339 million.