November 27, 2018 / 2:14 PM / 15 days ago

La Mancha plans to expand its African footprint, buy Barrick gold mines

LONDON (Reuters) - La Mancha Group plans to buy more underground gold mines in Africa and is ready to snap up mines that Barrick Gold (ABX.TO) and Randgold Resources (RRS.L) will sell after their merger, its billionaire chairman Naguib Sawiris said on Tuesday.

“(The Barrick disposals) might be in geographies where we are very strong and that makes sense for us,” Sawiris told reporters on the sidelines of the Mines and Money conference in London. “We can extend the mine lives.”

Sawiris said he was looking for mines with lives of at least 10 years and with output of 150,000 to 250,000 ounces per annum.

La Mancha is a private gold company with investments in Toronto-listed Endeavour Mining (EDV.TO), Australia’s Evolution Mining (EVN.AX) and in August bought a 30 percent stake in Ghana-focused Golden Star Resources (GSC.TO).

Golden Star will look for assets in east Africa and mainly Sudan, Sawiris said.

Canada’s Barrick has said it will sell some non-core assets following its $6.1 billion takeover of Africa-focused Randgold in a deal set to close on Jan. 1.

Sawiris said the mining industry still needed some consolidation even after the Randgold-Barrick deal which will create the world’s top gold producer.

“We believe today is the problem is the whole mining industry needs consolidation and the proof to that the two big ones decided to merge but what about the smaller ones,” Sawiris said.

“There is more sense and more urgency for the smaller mining companies to come together than for the bigger ones.”

Sawiris also said he could pursue a secondary listing for Endeavour Mining (EDV.TO) or one of the gold companies he plans to invest in Africa on the London Stock Exchange.

Sawiris said he would not work with Chinese companies in gaining a bigger footprint in Africa as China had “closed its borders” to investors.

Reporting by Zandi Shabalala; Editing by Jan Harvey and David Evans

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