Mar 16, 2022
 in 
Battery Metals

The $40B Sawiris Family backs SRG Graphite (TSX.V: SRG) By Acquiring a 19.9% Stake in the Company

The Sawiris family is an Egyptian family that owns the Orascom conglomerate, spanning telecommunications, construction, tourism, industries and technology. In 2008, Forbes estimated the family's net worth at $36 billion.

Onsi Sawiris (1930–2021) was the patriarch of the family. Various companies in the group are run by Onsi Sawiris' three sons:

  • Naguib Sawiris
  • Samih Sawiris
  • Nassef Sawiris

La Mancha Fund SCSp, a fund advised by La Mancha Capital Advisory LLP, has agreed to acquire a significant 19.9-per-cent stake in SRG Mining Inc.

Subject to final due diligence, execution of definitive documentation, and approval from La Mancha's investment advisory committee and the fund's manager, SRG will issue 22,442,941 common shares to the fund (or its designated affiliate) through a private placement at a price of 56 cents per share, yielding proceeds to SRG of approximately $13-million ($10-million (U.S.)). The fund will come to own 19.9 per cent of SRG's issued and outstanding common shares when the placement is completed, establishing it as one of SRG's largest shareholders.

Upon receipt of the proceeds, SRG will have cash and cash equivalents of approximately $17-million ($13-million (U.S.)) and no significant debt. SRG intends to use the proceeds to advance the company's large-scale Lola graphite project in the Republic of Guinea, to develop a fully integrated mine-to-market solution to supply active anode material to the European lithium-ion and fuel cell markets, and for general corporate purposes.

SRG will work closely with La Mancha, during the development phase of the project, to ensure the fund's continued participation in subsequent financings to advance SRG toward production.

"We are confident that La Mancha shares our development vision, and has the experience and access to financial resources to help us develop our large-scale Lola graphite project and second transformation strategy, creating value for SRG's stakeholders in the Republic of Guinea and our international shareholders," said Benoit La Salle, chairman of the board.
Naguib Sawiris, chairman of La Mancha's investment advisory committee, said: "La Mancha has seen significant successes in the gold industry, and this investment in SRG is a logical continuation of the fund's strategy to invest in commodities necessary to shift the energy system away from one dominated by hydrocarbons. The supply-demand dynamics for clean, future-facing metals and minerals could mean we are at the dawn of a new commodity supercycle. La Mancha is pleased to support SRG with this initial investment, and, depending on the outcomes of the development program, there is the potential for up to $50-million in subsequent financings to fund SRG through to production."

The fund's investment into SRG is subject to La Mancha's and the fund manager's internal approval processes, execution of definitive documentation, approval by the TSX Venture Exchange, and other customary closing conditions. Receipt of all necessary approvals and completion of the transaction are expected on or before March 31, 2022.

Upon closing of the private placement, SRG will grant the fund or its affiliate certain investor rights under an investor rights agreement. Among key provisions, the fund or its affiliate will have the right to nominate two directors to SRG's board. In addition, the fund or its affiliate will be granted anti-dilution rights to enable it to maintain its SRG ownership at 19.9 per cent.

About La Mancha Fund SCSp

The fund is a Luxembourg-based deep-value fund focused on investments in the precious metal and energy transition space. La Mancha advises the fund on strategic investments made in publicly listed and private exploration, royalty and mining companies with a global outlook. La Mancha is a long-term-minded investor, with a mandate to support mining companies to achieve sustained growth by providing long-term equity capital, as well as operational and board level expertise, to further portfolio company performance and expansion.

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