ASCOMASCOM expands its regional mining business with the acquisition of a strategic 9% stake in GMA Resources, a UK-listed gold exploration and production company that owns 52% of a promising exploration and production operation in Southern Algeria

ASCOMASCOM

ASCOMASCOM is Citadel CapitalCitadel Capital's Platform Company for investment in the regional mining sector.

The deal comes as part of ASCOMASCOM's strategy to grow its precious metals mining division and expand its mining operations throughout North and East Africa. GMA, whose shares are traded on the London Stock Exchange's AIM (AIM:GMA), has a controlling 52% stake in ENOR, a highly-promising Algerian gold exploration and production operation located in the country's southern Tirek-Amesmessa region.

"The acquisition was a perfect fit for ASCOMASCOM as the company looks for regional expansion opportunities," said Karim Sadek, Managing Director at Citadel CapitalCitadel Capital, the region's leading private equity firm with investments worth more than US$8.3 billion. "We already have five gold mining concessions in Ethiopia and are in the process of negotiating additional concessions in Sudan and Egypt. Acquiring a stake in GMA was the perfect opportunity for us to expand our presence in Algeria, a country where Citadel CapitalCitadel Capital and ASCOMASCOM see outstanding growth potential in a number of sectors."

Citadel CapitalCitadel Capital's platform investments in cement production and construction and engineering, among others, are already very active in Algeria. Although founded in Cairo, the firm today maintains a second office in Algiers headed by Managing Director Alaa El-Afifi. Citadel CapitalCitadel Capital will have investments of some US$ 800 million in Algeria by the end of 2009.

The ENOR concession is a 1,425 square kilometer plot of land located in mineral rich-region southern Algeria. ENOR, an Algerian operating company, is 48% owned by Sonatrach, the state-owned Algerian oil and gas company.

ENOR produced 18,500 ounces of gold from the concession in 1H09.

Under the terms of its deal with GMA, ASCOMASCOM will have the right of first refusal on the sale of additional equity in the company until August 2010. ASCOMASCOM will also have the right to appoint one member to the GMA board.

Commenting on the deal, APM CEO Kenneth Crichton said, "The acquisition has just taken us one step closer to our goal of becoming a regional leader in the mining of precious metals. The fact that GMA has a production facility located directly within the concession raises our level of confidence in what future exploration will reveal."

Crichton, a 23-year veteran of the global mining industry, was hired by ASCOMASCOM in February to consolidate and streamline APM's operations in the region.

"We are pleased to have been able to conclude this funding and to have attracted an important strategic investor such as APM," said GMA CEO Douglas Perkins in a company statement.

Research to date suggests that ENOR's property offers considerable potential for the development of additional prospects that would be amenable to the open-pit mining techniques being deployed on the site.

With an established and experienced operating and exploration team already in place, ENOR shareholders have approved management's gold exploration plans. The company is now quickly working to identify new resources, with the intention of starting work on a five-year expansion plan. This provides the ASCOMASCOM group with a unique opportunity to invest in GMA during a phase of planned growth and expansion.

The deal will allow the ASCOMASCOM group to acquire 42,636,624 newly issued ordinary shares at 4.5 pence per share to be paid over four tranches spread over the coming four months. The transaction is structured through Valencia Services Ltd BVI, a wholly owned subsidiary of ASCOM Precious Metals Mining S.A.E. in which Asec Company for Mining - ASCOMASCOM owns 99.9%.

A regional mining, quarrying and mining services company, ASCOM specializes in the management of quarry operations for the cement industry as well as the exploration of precious minerals. The company now has mining and service operations spanning from Egypt to Ethiopia, Syria, the United Arab Emirates, Algeria and Sudan. ASCOMASCOM is a Citadel Capital company and provides mining services and raw material supplies to more than 65% of the Egyptian cement industry.

Citadel CapitalCitadel Capital is the leading private equity firm in the Middle East and North Africa. The firm focuses on building regional platform investments throughout the region in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity Specific Funds. Citadel CapitalCitadel Capital's 17 OSFs now control Platform Companies with investments worth more than US$ 8.3 billion in 14 industries, including mining, cement, transportation, food and energy. Since 2004, the firm has returned more than US$ 2.4 billion in cash to investors, more than any other private equity firm in the region.

-Ends-

For more information, please contact:
Ms. Ghada Hammouda
Head of Corporate Communications,
Citadel CapitalCitadel Capital (S.A.E.)
ghammouda@citadelcapital.com
Tel: +20 2 2791-4440
Fax: +20 22 791-4448
Mobile: +20 16 662-0002

Maryam Keblawi,
SAHARA Communications
Tel: 971 4 3298996
Fax: 971 4 3298995
Mobile: +971 50 4779923
Email: maryam@saharagcc.com
www.saharagcc.com

© Press Release 2009

 

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