South Africa Junior Mining Fund

completed

NAMF will invest in junior mining ventures and promote junior mining activities in Southern and Central Africa. It will invest in pre-feasibility stage (after the resource has been identified), feasibility study stage, and early stages of production in junior mining projects. The fund will also invest in small-size spin-offs from restructured/reorganized mining companies. In Canada and Australia, for example, junior mining companies play an important role in bringing new resources into production - they are more effective at grassroots exploration than majors. In South Africa, the development of mineral resources has been dominated by large mining houses with limited participation by junior mining companies. This is due to limited access to mineral rights and lack of access to capital. In February 2000, the South African government together with some South African mining companies and aspirant mining juniors launched the Bakubung Initiative (BI). Its objective was to promote junior mining activities in South Africa. They set out to do so in three ways:Provide input into the revision of South Africa''s mining legislation (the new Minerals Development Bill);Facilitate the creation of mining funds to invest in junior mining companies; andFacilitate the set up of a mentor group, consisting of persons with extensive mining and financial experience, that would provide junior mining entrepreneurs with training and advice, transferring knowledge and skills.NAMF, together with the parallel establishment of a mentor program to support prospective investment projects, is the result of initiatives (2) and (3) above.Through the above initiatives, South Africa plans to transform its mining sector - to revitalize it and make it more representative. Junior mining ventures are expected to play an important role in this process. The fund will focus initially on South African opportunities but selective opportunities in the Southern and Central Africa will be considered. By investing in NAMF, IFC will provide long-term funding to junior mining ventures. It will also signal to other providers of funding, especially venture capitalists and the local stock exchanges, to consider investing in junior mining ventures. IFC will assist the fund develop environmental and social guidelines/policies to be used in the evaluation of investment proposals. IFC will assist and support the development of the mentor group.