Egypt’s Naguib Sawiris vends La Mancha shares into new, $1.4bn gold-focused fund

Naguib Sawiris, La Mancha

GOLD bull Naguib Sawiris, the Egyptian entrepreneur who helped bankroll Endeavour Mining, announced today the creation of a fund primarily pointed towards the development of junior mineral gold resources.

The fund is currently invested in $1.4bn of assets comprising of Sawiris existing investments previously held in La Mancha Holding. The new vehicle – La Mancha Fund – also has its first co-investor consisting of $100m from a “strategic investor”.

Sawiris will chair La Mancha Fund which will be registered in Luxembourg as a long-only fund focusing on the gold sector, but which will also take in potential mining opportunities in the supply of electric vehicle batteries.

“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,” said Sawiris in a statement. “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,” he added.

La Mancha Fund will be advised by La Mancha Capital Advisory (LMCA).

La Mancha Fund will buy “significant stakes” in junior mineral resource companies with strong managerial and geological potential to implement a three- to five-year value creation strategy. It will seem to streamline existing businesses and develop both organic and external growth options.

This has been La Mancha Holding’s modus operandi for the last eight years starting with an initial investment in Evolution Mining, an Australian-listed gold producer.

The key moment for La Mancha, however, was an investment in Endeavour Mining which recently joined the world’s top ten largest gold producers following mergers with SEMAFO and Teranga Gold Corporation.

It currently has a 19% stake in Endeavour as well as a 35% stake in another gold producer, Golden Star Resources, the strategy for which is yet to fully materialise. Both Endeavour and Golden Star operate in Africa.

In November, La Mancha signed an ‘Expression of Interest Agreement’ with the Government of Nigeria, a place Sawiris considers to have prospective gold resources. He also thinks Sudan and South Sudan offer huge potential.

Talks to buy a 51% stake in Egypt’s government-owned Shalateen Mining Company were put on hold towards the end of 2020 after roughly nine months of negotiations.