Canada’s Endeavour Mining Corporation (TSX:EDV) (ASX:EVR) (OTCQX:EDVMF) said Monday it has sold 30% of the company to La Mancha Holding in a friendly deal that will see the firm getting a majority stake in the Ity gold mine in western Africa, plus up to US$138 million in financial commitments in return.
La Mancha, a private investment company headed by Egyptian businessman Naguib Sawiris, is known in Canada for being one of the main funders of Wind Mobile, a competitor to the country’s largest wireless carriers, launched in 2009.
Vancouver-based Endeavour says the partnership puts it in line to produce 580,000 ounces annually from five African operations, including in Cote d’Ivoire, where the Ity mine is located.
“We are pleased to welcome La Mancha and Naguib Sawiris as our long term strategic partner with the shared vision of building a leading, Africa-focused gold producer,” Endeavour chief executive, Neil Woodyer, said in a statement.
Investors reacted positively to the news. Endeavour’s shares were up over 3% in Toronto at 11:23AM ET.
The deal, which remains subject to conditions and shareholder approval, would see La Mancha injecting $63 million in cash into Société des Mines d’Ity (SMI), which is the body that operates the Ity open pit mine, located 480 kilometres northwest of Cote d’Ivoire’s capital Abidjan.
West Africa-focused Endeavour will issue 177.1 million of its shares, worth about Cdn$106 million as of Friday, to La Mancha as part of the agreement. Endeavour’s board of directors would be expanded to nine members, including two nominated by La Mancha – Sawiris and Sebastien de Montessus, who is currently La Mancha’s president and CEO.
Montessus is likely to leave La Mancha to become president and eventually chief executive of Endeavour. Woodyer is expected to remain Endeavour’s CEO for now to later be part of the board.
La Mancha has also made an in-principle commitment to invest up to $75 million to support Endeavour’s growth.