First of all, you should know that this publication believes that a transaction could be concluded between Robex and African Gold Group. It is also necessary to consider that a third company, such as La Mancha, could intervene in a role of financial support. I suggest you refer to my previous publications to understand the approach used to arrive at these conclusions. Even if everything is still theoretical, I am confident that in the coming weeks, everything will become clearer. Regarding African Gold Group, it is probably the company with the most mature license, in line with the Robex business model. That is to say, a permit whose geology is favorable for low-cost exploitation. Its Kobada permit is located in southern Mali, such as the Nampala permit. Therefore, a gold mining operation at Kobada would be subject to the same tax, environmental and social laws. In a context of consolidation, AGG could benefit from the experiences of Robex in connection with the Malian administration, all of its local suppliers and financial institutions.
African Gold Group also has an excellent management team and an experienced board of directors capable of effectively running a gold mining operation such as Kobada. Considering the mineral resources identified in the last 43-101 as well as the latest estimates, we can also believe that additional mineral resources will be discovered in the future.
Regarding the financing of a factory, market conditions are obviously not very favorable for AGG. Considering Danny Callow’s legitimate goal of creating shareholder value, not all fundraising opportunities are of equal value. Therefore, one must remain realistic about the likely outcomes, whether one is on the side of African Gold Group or on the side of Robex.
About La Mancha, it is a private company owned by Mr. Naguib Sawiris. The latter is a major financier in the gold sector and his investments are mainly located in Africa. He is in favor of the consolidation movement of the gold mining market and is the main shareholder of Endeavor, Altus, Golden Star and others… He is also considered a visionary man who shows great daring in his investment choices. Finally, Mr Sawiris and Mr Cohen are two personalities who know each other well and whom I am convinced of their mutual respect.
Regarding Robex, I would like to share with you my last thought. To achieve this, a pause was necessary because important parameters and accumulated over the years were considered. The most important of all parameters is that Team Cohen accidentally became a gold miner. I'm sure these people are happy and energized by what they're doing, but the fact remains that Team Cohen's involvement in Robex is at odds with Fairchild's business model. This model consists of investing and supporting various companies in different sectors. Consequently, my reflection allowed me to believe that the Robex business model could also be reoriented.
It is pertinent to believe that running a gold mining plant located in Mali is not an easy task and time consuming for the Cohen team. It is also relevant to believe that running a second factory would require even more time. Considering this, coupled with the fact that African Gold Group has all it takes to administer the Kobada permit operation on its own, I believe that a different association is not a crazy idea.
Robex could take the opportunity to reorient its business model to move more towards supporting and financing gold projects in Africa. And African Gold Group could thus be the first company to benefit from Robex's services. This type of partnership would allow AGG to obtain the financing to build its plant while retaining its independence. And on the Robex side, to increase its revenues through partnership agreements leveraging its expertise as a low-cost operating company and financial asset manager.
There are countless gold projects in Africa that could result in the construction of a factory if favorable financial terms were available. Among these projects, several have similar geology at Nampala and Kobada, which have low gold grade and therefore considered riskier or simply not attractive. By exploiting the Nampala permit, the Cohen team was able to demonstrate the high profitability of this type of permit and the possibility of building small and medium-sized factories there.
In my opinion, coaching and funding is an under-exploited market in this segment and it has a lot of potential for the Cohen team. Kobada is a high quality license but I very much doubt that Robex will have the opportunity to acquire similar licenses on a regular basis to ensure its growth. In return, Robex could benefit from its expertise acquired in the gold sector and its ability to understand financing needs at different stages of development. Participation agreements could be concluded in an incalculable number of projects and would make it possible to obtain income generated by royalties, gold streaming, interest, and others ... It is in this context that a financial partner, such that La Mancha, takes on all its importance. A partner with whom trust is already well established and who knows how to seize opportunities quickly when they arise.
Gradually, Robex’s income could come from different sources and eventually be spread over several African countries, where the geology is favorable for low-cost exploitation. The ultimate goal is stable income and a decreasing level of risk, which would be a favorable environment for regular dividend payments.
In conclusion, I believe that we should not just limit ourselves to imagining that Robex can buy the Kobada permit with the aim of building and operating a factory there. There are different ways to profit from the gold sector and now is a good time to think about it. Trying to better understand the successes Mr. Cohen has achieved during his career is in my opinion a good approach in trying to anticipate the direction Robex might take.