LA Mancha Fund which holds the assets of Naguib Sawiris, the Egyptian entrepreneur and gold bull, is to invest $10m in a graphite mining development firm.
La Mancha will take a 19.9% interest in SRG Mining which is developing the Lola Graphite Project in Guinea. The acquisition has been agreed at a 20% discount to SRG’s share price. La Mancha will become one of SRG’s largest shareholders.
“This investment represents a significant further step in La Mancha’s strategy of broadening and diversifying the fund’s portfolio of battery metals developers and producers,” said La Mancha in a statement. The stake in the graphite mine will be held in addition to the fund’s investments in gold miners.
The fund, which was created in July last year, is currently invested in $1.4bn of assets comprising of Sawiris existing investments such as Endeavour Mining which were previously held in La Mancha Holding.
The proceeds invested by La Mancha will be used to advance Lola, with this first tranche of funding enabling the detailed engineering needed to allow Lola to be construction-ready by the end of 2022. At that stage, La Mancha will assess the viability of the fund participating in a further fund raising that would finance SRG through to production, it said.
SRG is also looking at the development of a downstream processing facility in Europe to supply anode material to battery manufacturers. The vertically integrated strategy will capture the maximum value from the supply chain, said La Mancha.
“La Mancha Fund’s growing portfolio now includes a nickel and a graphite developer, with a wide range of further investment opportunities in energy transition commodities that are under active consideration,” said Vincent Benoit, chief investment officer at La Mancha.
“The fund’s investment in SRG represents a further investment in the EV commodities space, continuing the fund’s strategy to support the development of the mines that are required to reach net zero,” he said.