Allied Gold Corp. planning UK listing later this year as part of $500m capital raise

London Stock Exchange LSE

ALLIED Gold Corporation is planning to list in London in an effort to take advantage of the relatively scarce investment options for gold investors there, said Reuters.

The newswire said the gold producer, which has assets in West Africa, was aiming to raise $500m to fund its plans. Allied Gold declined to provide details.

“As we deliberate internally on … the various options for funding our future growth and the market conditions for gold which are currently quite favorable, it would be inappropriate to speculate on which specific paths we may choose to follow,” it said in a statement.

Allied Gold is backed by US private equity firm Orion Mine Finance Group, and has hired investment banks for a London listing later in 2021. Orion Mine Finance, UBS declined to comment and JPMorgan was not available to comment, said Reuters.

Gold mining companies pursuing initial public offerings (IPOs) are trying to capitalise on a sustained rally in the price of spot gold, which is hovering around an all-time high above $2,000 an ounce reached in August 2020, the newswire said.

The precious metal serves as a hedge against inflation, stoked by policy support measures in advanced economies in response to the COVID-19 pandemic.

For investors, it is an opportunity to hold more gold shares in London, where only a handful of gold mining companies are listed. Another Africa-focused miner, Randgold Resources, delisted in 2018 after its merger with Canada’s Barrick.

Keen to tap new investors amid renewed interest, Canadian companies Yamana Gold, and Wheaton Precious Metals, have both added a London listing in recent months and Endeavour Mining is preparing to do the same in June, said Reuters.