Robert Friedland long ago perfected the ability to wring more money out of a mining project than anyone expected.
More than 15 years ago, Mr. Friedland was struggling to sell an unloved ore body on a Pacific Island. There were no takers, and Mr. Friedland lowered his price to $8-million. Still Mr. Friedland couldn't find a buyer.
Then suddenly, a rival executive showed interest in the project, and came to Mr. Friedland's office for a meeting.
“The guy says ‘I'm going to offer you $15-million,'” recalls Ian Telfer, now head of Goldcorp but once a colleague of Mr. Friedland's at a junior gold miner.
“Friedland was absolutely stunned. Couldn't believe it. He turned his chair around to look out the window because he said he was starting to laugh. Then he turns around and says ‘I won't sell it for a penny less than $30-million.'”
Soon, Mr. Friedland had a deal.
That salesman's touch, along with a measure of good fortune and a capacity for endless work, have helped to earn Mr. Friedland a fortune and a reputation as the best mining promoter there is. He helped cement that reputation Wednesday when he unveiled a partnership with Rio Tinto PLC to develop the Mongolian gold and copper mine that has been his passion in recent years.
The Mongolian saga has much more in common with the tale of the Pacific deposit than it does with the more famous epic of Voisey's Bay, the rich nickel deposit that Mr. Friedland's explorers stumbled upon by chance while they were seeking diamonds.
That find made Mr. Friedland hundreds of millions of dollars when he sold his company to Inco Ltd.
It took Mr. Friedland three years of slogging to find a backer for the Mongolian mine before London-based Rio Tinto agreed to pay $345-million for a 9.95-per-cent stake in Ivanhoe Mines Ltd., the Friedland-run company that has the rights to the copper and gold deposit.
The long search for a partner, amid conflict over taxes with the Mongolian government, tested Mr. Friedland's legendary ability to generate excitement about his projects. The 25-per-cent premium that the Singapore-based Mr. Friedland garnered from Rio Tinto over the market price of Ivanhoe shares shows that he hasn't lost his touch.
“Most guys out there that are promoters, even though they have the goods, they really can't brand their name or their company. They would have done a deal around $5 a share,” said Frank Holmes, chief executive officer of mutual fund firm U.S. Global Investors, which has a stake in Ivanhoe Mines. “The Robert Friedland factor is why you get $9 and change.”
If not for the well-documented events along the way, the path that took Mr. Friedland to Mongolia would seem like something out of a novel.
There was the youthful arrest for possession of LSD in 1970 in Maine, and the short stint in jail, followed by his move to the West Coast and time spent hanging out with Steve Jobs, later to become the founder of Apple Computer Inc. He studied Buddhism, travelled in India and spent time organizing aid for Nepal, meeting Wavy Gravy, the master of ceremonies at Woodstock, along the way.
Then came the move to Vancouver, where he started pushing companies listed on the Vancouver Stock Exchange, and helped to found Galactic Resources Ltd. Galactic helped to launch Mr. Friedland's fortune, but also gave him the nickname “Toxic Bob.”
At Galactic's Summitville mine in Colorado, cyanide used to extract gold started leaking into the environment. By 1990, Mr. Friedland had severed ties to the company. In 1992, the U.S. government's environmental regulator shut down the mine, and in 1993, Galactic declared bankruptcy.
Mr. Friedland then masterminded a venture that sought gold in Venezuela. Then it was on to Diamond Fields, which looked for gems in Africa, before stumbling on to the rich nickel lode at Voisey's Bay.
“Diamond Fields was sheer luck,” said Mr. Holmes of U.S. Global. “Diamond Fields was absolute horseshoes. They were looking for diamonds.”
Still, there's more than luck at play, argued Toronto investment banker Eugene McBurney, who has known Mr. Friedland for more than a decade and helped to raise millions for his projects.
“He goes places,” Mr. McBurney said. “He went to Africa when it was out of favour, he went to Venezuela when it was out of favour and he went to Mongolia when it was out of favour.”
“He's a doer,” Mr. McBurney added. “There are a number of people out there who don't get things done. They have a world-class ore bodies, but there's a certain inertia. There's no inertia about Robert Friedland.”
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