Ghana suspends mining IPO sale

Ghana has temporarily suspended the sale of $750 million of shares in a gold mining funds.

Citing sources close to the development, Bloomberg reports that the delay followed the government of Ghana’s review of the rules and the processes that dictate mineral royalty payments.

The fund is expected to come as a special purpose vehicle and conduct an initial public offering through a dual-listing on the London Stock Exchange and the local bourse

Bloomberg further reports citing the fund will be structured to receive royalties and pay dividends from these inflows and that prompted the government to reassess whether its systems are sufficiently robust to secure all income due, they said.

The West African nation, Bloomberg reports selected Bank of America Corp. to lead the plans for the dual listing in London and the local bourse.

The sale of the shares which was scheduled for this month has been postponed to March, according to sources with the knowledge of the development.

The proposed listing could be London’s largest mining share sale in more than two years after En+ Group raised $1.5 billion through a sale of global depository receipts in November 2017, reports Bloomberg.

Gold prices increased by 4 percent in the first quarter of 2018, averaging US$1,329 per troy oz attributable to stronger investment demand, rising inflation, and a weakening US dollar. Gold prices are projected to increase from US$1,293 per troy oz in 2017 to an average of US$1,346 per troy oz in 2018 before declining slightly to US$1,302 per troy oz in 2019. 

AngloGold Ashanti Ltd., Newmont Corp., and Gold Fields Ltd. are among the mining companies with assets in Ghana.

Ghana is the largest producer of gold in Africa with its output of 4.8 million ounces in 2018 surpassing South Africa’s 4.2 million ounce total for the first time. 

Ghana’s gold output jumped 12% in 2018, according to data from the country’s Chamber of Mines. 

“It’s an important part of our portfolio and, geologically we see really good potential to continue to expand,” Chief Executive Officer of Newmont Gary Goldberg said in an interview. “We’re very happy operating in Ghana.”