New Africa Mining Fund (NAMF) has raised $100m for its second venture capital fund from development organisations as it taps companies and other investors to try and gain a further $200m in commitments.
Neil Gardyne, principal at NAMF, said: "By NAMF II’s second closing on 31 January 2012, we hope to have a total commitment of up $300m; a priority for us between now and then is to attract more investors of the calibre of those already committed, namely the Development Bank of Southern Africa; African Development Bank; International Finance Corporation; Swiss Investment Fund for Emerging Markets; and DEG KFW Bankengruppe."
Like its predecessor, NAMF I, NAMF II looks to provide risk capital for junior mining companies with projects (excluding diamonds and uranium) in Africa, that can demonstrate a minimum 35% return on investment. NAMF II will have a life of eight years with capital commitments made over the first five years and returns concluded by the end of the eighth year.
Gardyne said: "Our commitment to World Bank performance standards, aligned to the Equator Principles, and to the Extractive Industries Transparency Initiative (EITI), means we must see those junior miners in which NAMF II is invested delivering the likes of jobs, infrastructural development and contributions to the treasury and forex [foreign exchange] reserves of their host countries."
The 10 African mining projects in which NAMF 1 was invested ultimately delivered an internal rate of return of 39%. Key investments included JSE- and AIM-listed Petmin Limited, which has developed the successful 1.1M ROM tpa Somkhele anthracite mine in South Africa’s Kwazulu-Natal province, and Zambian copper miner Kiwara plc. Vancouver-based First Quantum subsequently acquired Kiwara and is developing its Kalumbila copper deposit in north-west Zambia.