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We have recently facilitated workshop with our client where we discussed Gold Mining in Africa with industry experts, including market opportunities and risks landscape, regulation specifics by countries, operating model best practices and lessons learned shared by CEOs and C-level Executives of global gold producers who have already successfully expanded into Africa.
Africa has become undisputed leader in gold production, accounting for one third of global extraction volumes and reaching 1000 t p.a. extraction in 2023 (+30% growth over the last 10 years).
Many international major gold producers are already present within the continent. Many potential investors, including intensified interest from Chinese companies, are actively looking for available opportunities in African's gold market.
Africa is very diverse continent not only from the resource base perspective, but also from geopolitical, macroeconomic, regulatory and other aspects critically important to consider by potential investors. So, when considering investing in Africa Gold Mining, it is important to look at both resource base opportunities (available assets and their characteristics) and country risks. As in each investment story, it is risk-reward game. Plus investor unique competencies to manage risks and increase intrinsic value of the asset.
What would you prefer if you had two options – (1) Invest in high quality gold mining asset at low price due to elevated political risks, double down on GR, wait for local geopolitical situation to improve and exit or (2) Pay premium for good asset in countries with relatively low political risk and gradually improve operational efficiency to get lower, later, but less risky exit premium?
