Sawiris buys $500 m bid in gold firm

Egyptian billionaire Naguib Sawiris, bought a stake in Canadian gold producer La Mancha Resources in a 500 million Canadian dollar(US$493m) deal, emphasizing a radical shift in his investment strategy, according to analysts. The pact comes amid growing market talk of recovery on the price of the yellow metal. Sawiris, founder of Orascom Telecom Holding, and ranked by Forbes as Egypt’s second-richest person, with a net worth of around US$3.1 billion, has confirmed the deal but didn’t give any further comments as the transaction was not yet complete. It was announced on Friday that he had bought French nuclear reactor maker Areva’s stake in the gold mining firm through his company Weather II Investments. “The company represents an extremely attractive opportunity with a geographically diverse portfolio of assets offering exposure to growth and development stage projects,” Sawiris told Arabian Business on Sunday. Meanwhile, Shares in La Mancha rose by 52.44 per cent after the deal was announced on Friday, closing at C$3.43 (US$ 3.38). That is below Sawiris’ offer to buy La Mancha for C$3.50 per share, which was agreed by the corporation’s board. The intended purchase of the gold miner has been arranged with the firm Weather Investments II, which is managed by Sawiris. La Mancha, which is listed on the Toronto Stock Exchange, runs four gold mines in Africa and Australia. Ibrahim Masood, a senior investment officer for asset management at Mashreq, told The National on Sunday that gold had proved to be a stable long-term investment in the past decade. “It has had an amazing 10-year run,” he said. Despite a drop in the gold market this month, a report issued yesterday by Emirates NBD pointed to a recovery late last week. “Strong buying emerged [partially in sympathy with silver], which puts gold back on the road to recovery,” the UAE bank said in its Precious Metals Report. Gold prices have declined by about 1.4 per cent this month but rose on Friday as a result of a positive trading accredited to good economic growth indicators in China.