ITOCHU CORP's Tokyo office. Credit: Itochu

ITOCHU CORP's Tokyo office. Credit: Itochu

 

EXCLUSIVE: Inside Friedland's Exploration Unit

Issue 87, June 2014

Continued from Page 1 ➤

...that their agreement represents real capital, Hornor believes. “It allows us to go hunting together for interesting projects worldwide. In this market, that’s a very powerful partnership to have.”

“What we provide is a platform to secure natural resources going many decades into the future. It’s a structure built on trust and goodwill,” Hornor repeatedly emphasises. “The Japanese know that we’re partners to them to the end. Due to that, we’ve been able to negotiate sizeable financing packages.”

Typhoon

The structure makes Kaizen (which means ‘continuous improvement’ in Japanese) a funnel or due diligence valve for Japanese capital investing in mining assets: whilst Kaizen provides the listing, the share market currency for paper deals and feet on the ground in Vancouver, Itochu would provide the capital, buying in at a project level and funding Kaizen’s exploration campaigns.

Itochu, Hornor indicates, will front capital for a stake in West Cirque’s projects in British Columbia. “Unless we have support from our Japanese partners, we don’t want to court a project or a company. We’ve said what we can say, which is that we expect them to be supportive.” Because of its access to Japan, “it’s a quicker decision to yes for the Japanese to invest in Pacific Rim projects.”

Beginning with Aspen Grove, exploration at West Cirque’s projects will deploy HPX’s proprietary surveying technology, dubbed Typhoon. HPX has three Typhoon devices, electrical transmitters that use bursts or pulses of current to punch through rough terrain, one in Australia, one in the Congo and one in production for Aspen Grove. More will be produced “as needed.”

Future Deals

Though the two companies work closely together, Hornor says there are advantages to keeping Kaizen and HPX separate. “There are sometimes benefits to having a private entity negotiate deals,” he says. HPX has so far plied its technology in Namibia, the Congo and Chile. “It’s easier for Kaizen to go after targets that have been beaten up in the market, offer them our publicly traded currency and then bring in Japanese investors to support the project.”

Takeover targets seem willing, he says, indicating a market bottom and offering up discoveries for “a fraction” of their sunk cost. “Frankly, a lot of management teams now are struggling financially and are happy to negotiate deals with us that ultimately benefit shareholders on both sides.”

“After we’re successful bringing the Japanese in at the project level, once people see the overall amount and understand that the Japanese really are there, the market, I think, will start to appreciate what’s possible and how the platform really works. We’re coming up under the radar for a lot of people, but we think it’s going to be wildly positive.”

Friedland Protege

Hornor dismisses suggestions that Ivanhoe has an unconventional corporate culture. “If you’re talking about the meditation and Steve Jobs and all the rest of it, none of that is part of our corporate culture.” RDF, a mind-game attributed to Friedland and Apple Inc. founder Jobs, he says is “irrelevant” to how Ivanhoe works, though he does talk of “chameleon consciousness”, integrating with local groups to avoid being viewed as “ugly Americans.”

Hornor also rebuffs questions as to whether he is a Friedland protege. “I’ve been given terrific opportunities within the Ivanhoe group,” he says. “Robert is recognised as a legend in his time. He is a dream mentor, from whom I’ve learned a great deal during the past nine years.”

“The market will start to appreciate what’s possible and how the platform really works.”

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