Egypt’s Sawiris family creates $1.4 bn gold mining fund

 Egypt’s Sawiris family creates $1.4 bn gold mining fund

La Mancha Holding S.à.r.l., a firm controlled by the Sawiris family that runs Orascom, has created a long-only fund dedicated primarily to gold mining and has roped in a strategic investor to raise $100 million.

The first closing of the Luxembourg-based La Mancha Fund SCSp, which will be advised by La Mancha Capital, has just been completed. This involved transfer of La Mancha’s existing gold mining assets under the fund and roping in the unnamed strategic partner.

The fund has assets of over $1.4 billion and is assessing a number of new opportunities. It will be open to other qualified investors in due course, the firm said.

“Creating a fund is the natural consequence of what we have been doing since we vended-in our operational assets into Evolution and Endeavour in 2015. Transitioning to a fund structure and welcoming new investors is timely when we are seeing opportunities in a gold mining sector which is fragmented and needs further consolidation,” said Naguib Sawiris, chairman of the board of La Mancha.

The fund’s main investment aim is to provide exposure to the gold and precious metals mining sector but it will also have the flexibility to invest in electric vehicle battery metals. It will invest primarily in a concentrated portfolio of long-only listed equities but may also consider investing a small proportion of its assets in private equity holdings.

It will seek to acquire significant stakes in mineral resource companies with managerial and geological potential to implement a three- to five-year value-creation strategy.

La Mancha was a gold mining company established in 1996 and listed in Toronto. It was first acquired by Areva in 2006 and by the Sawiris family six years later. From 2012 to 2015, it turned around, expanded and operated three gold mines (in Australia, Sudan and Ivory Coast.

In 2015, it sold the Ariab Mining Company while bringing the Australian Mungari mine under Evolution Mining and the Ity mine in Ivory Coast under Endeavour Mining, in exchange for a significant stake and board representation in each company.

From 2015 onwards, it supported these two firms by providing more than $600 million of additional capital. For the last three years, La Mancha has continued to expand its portfolio with new investments.

Vivek Sinha

The Capital Quest