Second Mali gold mine scores backing from former Olam exec

The family office of Indian businessman Gagan Gupta has agreed to fund a second gold mine in Mali, providing a boost to a government that’s been at loggerheads with mining investors in recent years.

Eagle Eye Asset Holdings Pte. Ltd. has struck a $120 million deal with Cora Gold Ltd. to support the development of the Sanankoro gold project in southern Mali. The Singapore-based firm is already backing the construction of a larger mine being built nearby by Toubani Resources Ltd.

Eagle Eye is doubling down on the West African nation, even as its military-led government has spent much of the past three years locked in disputes with foreign companies that own the country’s largest gold mines. Those rows centered on claims of alleged back taxes and revised legislation that hiked royalties and the state’s share in joint ventures. Mali is Africa’s second-largest producer of the precious metal, according to the World Gold Council.

While companies such as Resolute Mining Ltd. and B2Gold Corp. continued operating by reaching financial settlements with the authorities, the standoff with Barrick Mining Corp. – which runs the vast Loulo-Gounkoto mining complex – deteriorated to such an extent that the Canadian firm temporarily lost control of the asset last year.

Gupta is the founder and chief executive of Arise Integrated and Industrial Platforms, an operator of industrial parks that’s active in more than a dozen African countries. A former Olam Group Ltd. executive, his businesses are ramping up investment in mining and minerals processing ventures across Africa, including Sierra Leone’s first commercial gold mine, a bauxite project in Cameroon, copper exploration in Zambia and an iron ore mine in the Republic of Congo.

Eagle Eye — which is owned by Gupta’s family office – will fund Sanankoro through a streaming deal entitling the company to purchase about 30% of future gold production for 20% of the prevailing spot price, London-listed Cora said on Friday. The arrangement should “materially accelerate” the construction timeline once permits are secured, the statement said.

In October, the same investor agreed to be a major financier of Australia-based Toubani’s $216 million Kobada project, which is expected to enter production next year and targeting output of 162,000 ounces a year.

Eagle Eye is the top shareholder in both companies, owning 29.9% of Cora and 33.8% of Toubani.

(By William Clowes)