Madini aims to mine returns from African projects

Madini Minerals, a privately owned mining investment company, is slowly but surely adding to its portfolio of projects, moving into countries where others may be reluctant to go.

Madini, which is based in Mauritius — and is considering a listing there — has an office in Johannesburg from where it launches itself into the rest of Africa, with investments in Zimbabwean gold, Rwandan tin and tantalum and Sierra Leone gold and iron ore.

It is looking at another investment brought to it by one of its backers in Ghana in what CEO Iain Macpherson described last week as a “historically operational gold mine”. He declined to give further details.

Madini’s strategy was to seek out financially distressed mining projects that were either close to production or in production and bring cash from wealthy individuals or a commodity trading company in exchange for offtake rights, Macpherson said.

It is close to finalising terms with a commodity trading company to make an investment in an early-stage tin and tantalum company operating in Rwanda.

The most recent investment has been a $400,000 injection to buy 26% of cash-strapped, London-listed Sula Iron & Gold, which has an iron and gold prospect in Sierra Leone.

Madini has taken operational control of the company and appointed Roger Murphy, who has investment banking experience, as Sula’s CEO.

It will appoint a second Madini executive, most likely Macpherson who has built a number of mines, raised capital and listed companies, to the Sula board.

“We’re only looking at the gold in Sula. The iron is a distraction and we will get rid of it,” Macpherson said. China’s Shandong is mining the Tonkolili deposit, which is contiguous to Sula’s iron deposit.

The $400,000 will be spent on the first of two drilling campaigns and to renew the licence over the tenement. Madini wants to define up to 3-million ounces of gold at the Ferensola deposit.

Madini is about a month away from agreeing a term sheet on one of six tin prospects in which there is a scoping study in place drawn up by SA’s SRK. The tin and tantalum prospect will attract funding of $1.5m to deliver a bankable study within 20 months. Madini has 26% of the company that owns the prospects and has operational control of the projects.

In Zimbabwe, Madini has invested in a small, privately owned and financially distressed gold company with assets around Bulawayo.

Madini reckons that for an investment of $2.5m to fix the plant and upgrade shafts, it could generate 2,500oz of gold a month at below an all-in cost of $700 per ounce, giving it attractive margins with the gold price above $1,270 per ounce.

Chinese investors are in talks to invest $11m, buying the majority of the gold resources to the north of Bulawayo, leaving Madini and its partner the balance to the south of the city.