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Wednesday, 28 July 2021

La Mancha fund aims to raise USD 300-400 mn investments

La Mancha’s fund targets USD 300-400 mn contributions: Sawiris-run La Mancha is open accepting new investors in its new USD 1.4 bn mining fund, aiming to attract investments worth USD 300-400 mn, Chairman Naguib Sawiris told Al Arabiya in a phone interview yesterday (watch, runtime 7:19). The company announced this week that it is transforming itself into a fund, reaching a USD 1.4 bn first close with its current gold mining assets and a USD 100 mn contribution from an unnamed strategic investor.

Why the new fund? Sawiris has plans for new acquisitions in the gold mining industry, which represent a big share of the net worth of the Sawiris family. La Mancha already has 20-30% stakes in four listed companies, namely Endeavour Mining, Golden Star, Altus Strategies and Evolution Mining.

The strategy: La Mancha aims to both buy and restructure small and medium-sized businesses then merge them with larger entities in a bid to raise their production capacity and cut administrative costs, Sawiris said. These include listed companies valued at USD 200-300 mn which own one or two small mines and are in financial distress. The fund may also look for stakes in smaller mining outfits with “strong managerial and geological potential to implement a 3-to-5-year value creation strategy.”

The fund will be mainly focused on Egypt, thanks to the new amendments to the Mineral Resources Act, Sawiris noted. He wants to acquire more gold exploration licenses, after his Altus Strategies subsidiary Akh Gold won four licenses for nine blocks in the Eastern Desert earlier this year.

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