Following the hugely successful virtual conference at the beginning of February, Investing in African Mining Indaba delivered the second part of its 2021 online-only experience on March 30-31. The Virtual Investment Programme aimed to provide an exclusive digital space for deal making in lieu of the various meeting rooms and coffee stalls inside the Cape Town International Convention Centre, where investors usually connect and strike deals in ‘normal’ years gone by when the Indaba has rolled into town. Ahead of the specially curated event, Mining Indaba’s team of investor relations experts made sure to match projects and investors that fulfilled the criteria of both parties, citing a motivation to ‘connect you to the right people’. In addition to these investment opportunities, the event also provided access to two CPD-certified analyst-led roundtables with Nedbank CIB and Investec CIB as well as the famous Investment Battlefield final, following a series of competitive qualification rounds in the weeks leading up to the Virtual Investment Programme.
On March 31, Nedbank CIB’s lead analyst Arnold Van Graan moderated an exclusive gold roundtable discussion featuring four of the biggest names in the African mining sector, namely: Barrick Gold president and CEO Mark Bristow, Sibanye Stillwater boss Neal Froneman, Christine Ramon – interim CEO of AngloGold Ashanti and Perseus Mining managing director and CEO Jeff Quartermaine.
The heavily South African weighted panel were asked to discuss the recent downward movement in the gold price, after the turbulence and uncertainty of 2020 saw gold exceeding US$2,000 an ounce for the first time in its history.
But as COVID-19 vaccines have started to rollout at varying speeds across the world, the gold price stooped as low as $1,684 per ounce in March, despite ongoing monetary stimulus checks being pumped into economies around the world on an unprecedented scale.
Mark Bristow made a defiant response to the prospect of a bear market for gold. “I don’t see a bear scenario unfolding,” he told the panel. “Gold shares are still underperforming relative to their underlying value.
“The last year has been like the global financial crisis (GFC) period on steroids. But the big difference with today is that the money being printed is going into the hands of Joe Bloggs, but back then it was going into banking institutions.”
Linking the conversation back to the gold market, the ever straight-talking Bristow referenced the generalist trend towards what he described as ‘investment fads’. The latest rise in cryptocurrency investment has been suggested as one of the reasons for the sluggish gold price, with Bitcoin supposedly eating into gold’s appeal as an alternative form of currency.
In the face of increasing digital investment options, Bristow reiterated the importance of Barrick becoming more relevant to investors following the $18 billion merger with Randgold Resources in January 2019. “We were becoming irrelevant as an investment class,” he admitted. “That was the biggest driver of the deal.
“The other driver is, if you want to be a world class public business, you have to be global. We have that now with Barrick. We’ve followed a much more conservative approach and invested in improving our assets worldwide.”
Carrying on this thread, Jeff Quartermaine discussed the growth strategy behind Perseus’ portfolio of three open pit gold operations across West Africa. “We’re based in several countries, so we’ve been able to spread risk across the region,” he said.
Perseus poured first gold from its third mine – the Yaouré project in Côte d’Ivoire – in December 2020. The ASX-listed miner expects annual gold production to increase to more than 500,000 ounces per year by 2020.
“The task of growing should not be difficult providing we remain disciplined,” Quartermaine said. “Our explorationists have been busy identifying targets and now we can put our money where our mouth is. Very soon the fruits of our endeavours will come to market.”
The principles of ‘ESG’ are something Perseus has taken seriously since it started building mines in Africa nearly two decades ago. “We are guests in other people’s countries, Quartermaine continued. “If we can’t be responsible then we have very little to offer and don’t deserve to be there, frankly.”
These thoughts were echoed by AngloGold’s Christine Ramon, who delved deeper into the global mining giant’s long term decarbonisation strategy. “Climate change is a key priority at all levels of company,” she said. “We actually exceeded our 2008 target of cutting our emissions by 30% over 15 years.
In fact, the overall emissions of AngloGold’s portfolio decreased by almost 50% over the 15-year period – an impressive feat given emissions reductions targets were not commonplace at the time it was set.
“We achieved this by selling off high greenhouse gas (GHG) emitting assets and improving the energy efficiency of our remaining projects. After the sale of some South African assets last year, we will take another significant step towards reducing our GHG emissions,” she said.
Changing tack slightly, Sibanye-Stillwater CEO Neal Froneman discussed the importance of diversification in the African mining space, seeing recent gold companies moving into copper and other battery metals as analogous to previous diversification trends from gold into platinum group metals (PGMs), chiefly in South Africa.
“When you recognise the role that electrification will play in the future of the global economy, it becomes clear how important battery metals and PGMs are going to be,” he said. “However, gold remains a commodity of interest and there are more material gold transactions than battery metals at the moment.”
Coming full circle in the conversation, Froneman spoke on the global economic recovery from COVID-19 and how it might affect the gold sector long term. “It looks like we might be moving into more stable economic times, albeit with very significant stimulus packages which won’t be felt for several years, in terms of inflation. I remain bullish on gold and firmly believe it will be in a very good place in a few years time,” he concluded.
Mining Indaba Virtual Investment Battlefield final:
In the weeks leading up to the Virtual Investment Programme, 12 representatives from African exploration and development mining companies went head-to-head in four qualification heats to determine the finalists of Mining Indaba’s 2021 Virtual Investment Battlefield.
The precious metals exploration round was clinched by Antler Gold VP of operations Christopher Drysdale. A few days later in the precious metals development round, Cora Gold CEO Bert Monro also impressed the judges enough to earn a place in the final on March 31.
On the battery and energy materials side of the competition, IronRidge Resources COO Len Kolff made it through a closely fought contest in the exploration heat, while Gratomic Inc CEO and president Arno Brand succeeded with a strong pitch in the development stage round.
From there, the four winning participants reconvened to pitch their projects once again to a panel of esteemed judges in the Investment Battlefield final, which took place in front of a live virtual audience of global investors and financiers.
In the end, IronRidge’s Len Kolff produced another winning pitch on the AIM-listed junior’s Ewoyaa lithium pegmatite discovery in Ghana. It was a close-run contest, with Antler Gold’s Christopher Drysdale finishing as runner-up based on the company’s gold prospects in Namibia. However, the judges were ultimately sold on IronRidge’s exposure to the growing green economy through its high–grade lithium project. Congratulations to Len and all entrants in this year’s virtual Investment Battlefield!