Shanta Gold Limited (LON:SHG) is to float its Singida gold mining asset in Tanzania on the Dar es Salaam stock exchange.
The gold miner wants to raise US$20mln to develop Singida, with the IPO expected to take between 6-12 months.
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Shanta Gold will retain at least 51% ownership of Singida and will operate the project with the money to be used to start production and for exploration to expand the resource.
An internal study at the end of last year estimated gold production of 26,000oz per year for six years at an upfront cost of US$19mln.
Cash costs were projected at US$794 per oz.
Eric Zurrin, chief executive, said using asset-level financing unlocks value for Shanta Gold shareholders while also allowing it to retain a controlling interest.
“He added he had been encouraged by the initial feedback from institutional investors across East Africa who are seeking US dollar-linked investments in support of industrialisation.
“The IPO will also offer Tanzanians a rare investment opportunity within their own mining sector.”