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Singida Resources planned IPO on final stages

SINGIDA Resources, a gold mining company in Singida Region expects to list on the Dar es Salaam Stock Exchange in July once their application is approved by the regulator.

The gold miner, a subsidiary of Shanta Gold to list on Dar es Salaam Stock Exchange (DSE)’s alternative market to raise up to 30 million US dollars (about 70bn/-).

We are currently addressing a few issues raised by CMSA (the Capital Market Securities Authority), on the prospectus,” said the Managing Director of Arch Financials and Investment Advisory, the leading adviser of Singida Resources in the initial public offer (IPO), process, Iyen Nsemwa.

He said they were expecting to re-submit the prospectus within two weeks from yesterday. “Issues raised by CMSA are normal and we’ll resubmit the prospectus in two weeks.

“The project promoter, Shanta Gold, wants the IPO to go as soon as possible as some investors are ready to buy,” he said. Mr Nsemwa said the firm wanted to go ahead with the IPO immediately since mining of the gold at Singida field waits the funding from the public.

CMSA Principle Public Relations Manager Charles Shirima told the ‘Daily News’ that they are waiting for the gold firm to return the prospectus for final approval if no further issues arise.

“They [Singida Resources] have reached a final stage. Though final approval is subject to how they have addressed the issue raised,” Mr Shirima said.

Singida Resources will list the entire 30 million US dollar IPO at value of 500/- a share on DSE’s Enterprise Growth Market (EGM). Shanta will retain at least 51 per cent ownership of Singida and will operate the project.

Proposed IPO proceeds would finance the upfront capital to bring Singida mine into production and provide additional funds for exploration targeting resource expansion.

If listed, Singida Resources will be the first mining firm to raise fund locally and listed on DSE either markets. Shanta Gold, the owner of Singida Resources, said in a statement that they are focused on bringing the mine into production through “an asset-level financing.”

The project’s economics showed average annual production from open pit mining of 26,000 oz for an initial sixyear, while pre-production Capex requirement of 16 million US dollars and 3.0 million US dollars for working capital and Net Present Value (NPV), of 31 million US dollars and Internal Rate of Return (IRR), of 67 per cent at an 8.0 per cent discount rate and using the current gold forward curve as at early last December.

Shanta’s flagship New Luika Gold Mine in Chunya, in Mbeya commenced production in 2012 and produced 81,872 ounces in 2018.

MULTIPLE taxations, countless regulatory authorities and lack of ...

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Author: ABDUEL ELINAZA

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