Miner to list on the NSE as it seeks exploration funds

Mayfox Mining chairman Manga Mugwe at his Industrial Area office in Nairobi/ Photo/Diana Ngila

What you need to know:

  • Mayfox is eyeing the Growth Enterprise Market Segment of the bourse.
  • Kestrel Capital has been appointed the advisors for the planned listing.
  • RSM Ashvir are the financial advisors while Kaplan & Stratton are the legal advisors.

Mayfox Mining, a Kenyan gold exploration company, is planning to list on the Nairobi Securities Exchange (NSE) by the end of the year.

The miner is eyeing the Growth Enterprise Market Segment (GEMS), possibly making it the first exploration firm to list on the bourse.

Mayfox said listing will allow it get access to a wider and deeper pool of funds that it needs for further exploration in Turkana County, where it is exploring for gold deposits.

“Furthermore, a listing will allow us the chance to raise additional capital locally through the money markets as we progress towards mining. We view this as a step forward in both opening and developing investor appetite and the nascent exploration and mining industry,” Mayfox chairman Manga Mugwe told the Business Daily.

Kestrel Capital has been appointed the advisors for the planned listing. RSM Ashvir are the financial advisors while Kaplan & Stratton are the legal advisors.

Kestrel was also the transaction advisor for Stockport Exploration’s Sh100 million cash call of November 2013. Stockport Exploration is a Canadian firm prospecting for gold in Western Kenya.

The Mugwe family are the majority owners in the company through mineral exploration investment fund Mayfox Mining Mauritius Limited, while European investors make up the remaining shareholding.

Investors entering Mayfox will be coming in at the initial stages of exploration.

The company has been carrying out aerial surveys, which have identified 18 spots that show possible gold deposits, but more concrete data will be determined by the end of the year after which drilling can begin.

The Murulim Hills, Kalempus Field and Lapur Range sites in Turkana County are estimated to also have copper, nickel, lead and uranium deposits.

The long time between exploration and shipment of minerals also means that investors and the government will have to wait at least until 2017 before Mayfox can begin reporting revenues.

“Exploration in Turkana is very costly and time consuming given the lack of infrastructure and remoteness. This will make exploration longer and more challenging. We would be looking at constructing a mine, 2-3 years from now,” said Mr Mugwe.

Australian mining firm Base Resources shipped out its first shipment of titanium in January after it began developing its Kwale Sands project in June 2011.

Mayfox did not indicate how it is planning to raise the amount it needs for the venture but other explorers have raised less than Sh100 million from the market.

Red Rock Resources, a UK firm, has raised close to Sh85 million through equity and a bond to fund exploration in Western Kenya.

Eric Musau, a research analyst at Standard Investment Bank, said the amount of money explorers can raise will depend on results from the surveys, which will tell how much deposits lie beneath.

“Once you have the data then you go and get the financing,” said Mr Musau.

African Barrick Gold and Goldplat are other firms exploring for gold in the Western region.

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