The IPO Buzz: Ivanhoe Electric Returns

Ivanhoe Electric, Inc. (IE proposed) is now planning to go public next week. The deal was postponed on Thursday morning (June 23) without any explanation –  hours ahead of its expected pricing that night. The Canadian copper and gold mining company’s deal is the first big IPO since mid-May. BMO Capital Markets, Jefferies and J.P. Morgan, the joint book-runners, now plan to price the deal on Monday night (June 27,  2022) to trade Tuesday on both the NYSE American and the Toronto Stock Exchange. (Editor’s Note: This column, published Monday evening, June 20, 2022, was updated on Friday afternoon, June 24, with news of Ivanhoe Electric’s rescheduled pricing date. The column was updated earlier in the week as well.) 

The IPO consists of 14.39 million shares at a price range of $11.75 to $12.50. Ivanhoe Electric’s IPO would raise $174.5 million, if it’s priced at the mid-point of $12.13.

Bankers launched the deal on Friday morning, June 17 – hours ahead of the start of the long U.S. holiday weekend. The U.S. stock market was closed Monday (June 20, 2022) for the federal holiday in observance of Juneteenth (June 19, 2022), which marks the end of slavery in the United States.

Principal stockholders include some Fidelity Contrafund entities, according to the prospectus. Fidelity is listing this IPO on its calendar for clients.

Some IPO investors say they’re wary of this deal, citing Ivanhoe Electric’s net losses and their concerns about valuation – especially against the backdrop of a bear market.

Ivanhoe Electric was founded in 2010 by mining billionaire Robert Friedland, 71. He made his name with the development of the Voisey’s Bay nickel mine in Labrador (Canada) and the Oyu Tolgoi copper and gold project in Mongolia. (Worth noting – This story published Sunday, June 19, 2022: Mining billionaire Robert Friedland launches IPO for Ivanhoe Electric – The Globe and Mail) Friedland’s business empire ranges from Ivanhoe Mines and Ivanhoe Capital to SK Global Entertainment and Ivanhoe Pictures. He was an executive producer of “Crazy Rich Asians,” the 2018 rom-com hit.

Ivanhoe Electric’s principal executive offices are in Vancouver, British Columbia. But its two major mining projects are in the United States – specifically the Santa Cruz Copper Project, about an hour’s drive south of Phoenix, Arizona, and the Tintic Copper-Gold Project, about an hour’s drive south of Salt Lake City, Utah.

“We have the option to acquire 100 percent of the mineral rights constituting the Santa Cruz and Tintic projects,” the prospectus says.

The company has not generated any revenue yet from its mining activities, which are in the E&D (exploration and development) stage. It also owns a vanadium flow battery business that serves the electric grid and the telecom industry and a geophysical data-processing business that caters to the oil and gas industry.

Ivanhoe Electric is not profitable. For the 12 months that ended March 31, 2022, the company had a net loss of $70 million on revenue of about $9.86 million.

Total debt was $82.22 million, as of March 31, 2022.

In the prospectus, Ivanhoe Electric says its mission is “to support American supply chain independence and deliver the critical metals necessary for electrification of the economy.”

The company wants to be an American supplier of copper, gold, nickel, silver, cobalt and other metals or minerals deemed essential for the transition from fossil fuels to renewable energy.

The world is facing a shortage of copper, due to the shift to electric vehicles (EVs) and clean energy, the prospectus says. Electric vehicles use up to four times the amount of copper needed to produce an ICE (internal combustion engine) car or truck, according to an IDTechEx report produced for the International Copper Association. Solar power and wind power require a lot more copper than fossil-fuel and nuclear plants, according to the prospectus.

Most of the world’s copper, for example, is produced in non-OECD countries, including many deemed to be “authoritarian” such as Russia and China, the prospectus says.

A SPAC and a Chinese Deal 

SK Growth Opportunities Corp. (SKGRU), a SPAC affiliated with South Korean conglomerate SK, priced its IPO on Thursday night (June 23) for a Friday (June 24) debut on the NASDAQ: 20 million units at $10 each to raise $200 million. Deutsche Bank Securities was the sole book-runner. This is the 70th SPAC IPO priced so far this year. SK Growth Opportunities’ stock opened Friday at $9.95 and ended its first day of trading at $9.92 – below its $10 IPO price and technically a broken deal – on volume of about 13.01 million shares.

The small-cap IPO of Golden Sun Education Group Limited (GSUN), the holding company for a  Shanghai-based tutoring company, was priced Tuesday night (June 21): 4.4 million shares at $4.00 – the low end of its $4.00-to-$5.00 price range – to raise $17.6 million. Golden Sun Education’s stock started trading Wednesday (June 22) on the NASDAQ – jumping to $19.00 at the opening trade and closing at $16.30 – up a whopping 307.5 percent on its first day. Network 1 Financial Securities was the sole book-runner.

*Mobilicom Limited (MOB proposed), an Israeli company, was scheduled to price its IPO on Wednesday night (June 22) to trade Thursday on the NASDAQ. But the deal did not get done. The timing of Mobilicom’s small-cap IPO is now “to be determined.” This is a deal of 2.2 million ADS at $4.65 to raise $10.0 million. ThinkEquity is the sole book-runner. 

Last Week of June

Two small-cap IPOs are expected to get priced during the week of June 27.

Next week’s IPO Calendar may grow as filings flow into the SEC – and as bankers wrap up the second quarter on Thursday, June 30th.

Stay tuned.

(For more information on these companies, please see our:

IPO Calendar – Click on the company’s name and the hyperlink will take you to the company’s IPO Profile, which includes a link to the prospectus.)

(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)

Disclosure: Nobody on the staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute change.