La Mancha launches ‘deep value, long-only’ fund for gold mining investments

Egyptian billionaire Naguib Sawiris has set up a US$1.4 billion fund for gold mining investments held within his Luxembourg-based La Mancha investment firm.

Sawiris said the new vehicle, named La Mancha Fund SCSp, will be a ‘deep value, long-only fund’ dedicated to gold mining and open to new investors. The fund aims to take stakes in junior miners with ‘strong managerial and geological potential’, while encouraging consolidation through mergers and acquisitions.

“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 said.

The likes of Barrick Gold and Newmont Corporation have cemented their positions at the top end of the gold mining sector via acquisitions in recent years, but there remains a large quantity of gold producers below them that have not received adequate attention from mainstream investors.

La Mancha Fund SCSp will hold Sawiris’ stakes in Endeavour Mining (the largest gold producer in West Africa), Ghana-focused Golden Star Resources and African mineral royalty firm Altus Strategies. It also includes a $100 million investment from an unnamed strategic partner.

The fund will also seek to improve the environmental, social and governance (ESG) performance of the sector and broaden its appeal. It will also leave room for a smaller investment focus on battery metals needed for electric vehicles.