La Mancha enters into strategic partnership with Endeavour Mining

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Image credit: La Mancha website

La Mancha Group has formed a long-term strategic partnership with Canada’s Endeavour Mining Corporation.

Image credit: La Mancha website
Image credit: La Mancha website

The partnership agreement with Endeavour follows the signing of a long-term strategic partnership with Evolution Mining in Australia.

“In 2012, our shareholder entrusted us with growing his US$500 million investment in La Mancha. Today, upon completing our portfolio restructuring with the third transaction since the start of the year, I am proud to demonstrate that we have created value in an environment where gold equities and the gold price have declined by over 65% and 30% respectively since the privatisation in 2012,” said Sebastien de Montessus, CEO of the La Mancha Group.

“We have transformed the initial portfolio, which consisted of minority stakes in small mines with limited mine life visibility, into the largest holdings in Evolution, now the second largest Australian gold producer, and Endeavour which has the potential to be a leading African producer. Finally, we have removed geopolitical overhang through the opportunistic sale of our Sudanese Hassai mine for circa US$100 million, which gives us the financial flexibility to pursue our growth ambitions in Africa and Australia.”

Adertisement

According to the official announcement, in return for a 30% interest in Endeavour Mining, La Mancha will contribute its 55% interest in the Ity mine in Côte d’Ivoire, along with its Ivorian exploration assets, and US$63 million of cash.

Endeavour will issue 177.1 million of its shares to La Mancha as part of the strategic deal. Endeavour’s board of directors will be expanded to nine members, including two nominated by La Mancha – Sawiris and Sebastien de Montessus, who is currently La Mancha’s president and CEO.

“Despite Endeavour’s current low market valuation, we agreed to contribute Ity on similar valuation basis due to of the confidence we have in the quality of Endeavour’s assets, the re-rating potential of the combined entity, and in the interest of accomplishing our shared vision of building a leading African-focused gold producer,” said de Montessus.

“Furthermore, we firmly believe that our Ity operation will strongly benefit from the synergies of being part of an enlarged West African operating platform, with the demonstrated construction expertise from a team with a strong presence in Côte d’Ivoire.”

La Mancha will now focus on capturing growth opportunities in both Australia and Africa through its two strategic alliances.