ITOCHU CORP's Tokyo office. Credit: Itochu

ITOCHU CORP's Tokyo office. Credit: Itochu


EXCLUSIVE: Inside Friedland's Exploration Unit

Issue 87, June 2014

“He who has an operating team and access to capital,” US-born mining billionaire Robert Friedland recently told an audience in London, “has a chance of really building something. Right now, the cheapest exploration you can do is to just look at all the companies that have found something and make a deal.”

Within Friedland’s group, Ivanhoe, the process is underway. Late last year, HPX TechCo., a privately-held surveying specialist controlled by Friedland, swallowed the Toronto listing of Concordia Resource Corp., a hotchpotch of early stage assets. The new company, Kaizen Discovery, received assets injected by HPX including copper projects in Australia and the Congo, plus cash and a super-charged board, including several Friedland stalwarts.

In April, it also launched an all-stock takeover of West Cirque Resources, encompassing a portfolio of copper projects in British Columbia. Kaizen’s chief executive, Matthew Hornor, in his first interview on the company’s strategy, says it is the first of many deals.

Keeping Promises

“I think it would make sense to roll up a very large number of projects,” Hornor says, forecasting “two or three acquisitions a year at the company level. As we grow in size, we can take on larger and larger projects and go after different targets.”

In February, Kaizen signed a strategic partnership with Japanese trading giant Itochu, granting it c.6 per cent of Kaizen’s stock for C$5.1m ($5m), plus off-take, anti-dilution and project earn-in rights. The partnership gives Kaizen access to huge amounts of capital, Hornor says, held by Itochu and other Japanese trading houses hungry for metals to feed the country’s industrial complex, but shy of the vagaries of dicey mining stocks.

At the age of 20, Hornor, now 43, went on an exchange programme to Japan after reading in the Wall Street Journal that there were only 20 bilingual corporate finance lawyers in the whole of Japan. “I fell in love with the place: the people, the food, the culture. However they work, people keep their promises.”

He read law and economics at two universities in Japan and joined the Tokyo office of law firm Paul Hastings, representing Japanese firms abroad and advising US banks buying Japanese loan portfolios. A personal friend of Friedland’s (who spends much of his time in Tokyo), Hornor accepted an offer to head Ivanhoe’s Beijing office in 2005 and has been with the group since.

Itochu Corp.

“I started my relationship with Japan 23 years ago,” Hornor explains. “That’s how long it takes for them to believe you are not just a fly-by-night company, that you’ve committed your life to being part of their culture. All of that really matters. Unfortunately, most of these things are lost on the Western world.”

In 2010 and 2011 he secured a $290m investment by an Itochu-led consortium into Friedland’s Platreef project, South Africa. With Kaizen valued at C$79m ($72m) and Itochu at ¥1.9tn ($19bn), the market is yet to realise...

Continue ➤

“I think it would make sense to roll up a very large number of projects.”


Kaizen Discovery: Matthew Hornor's Copper Ambitions

Running into a building when others are running out is never an easy call, says Kaizen's CEO


Kaizen Eyeing
South American
Copper Assets

Itochu-backed Kaizen is
"transacting and being active
in a very inactive market"


Japan's Trading
Houses Feeling

Mitsui, Itochu & Mitsubishi positioned for major move on the mining markets in 2015



O'Keeffe's Buying Opportunity in the Labrador Trough

Two forces are at work in the Labrador Trough and they appear to be working together

Thiam: Guinea's
$200m Technocrat
from UBS

Mining minister on UBS & the $200m bribe he's accused of accepting by Rio Tinto