IMANI’s Key arguments:
1. Rising gold prices and rising gold production in Ghana should lead to our royalties being valued higher but this deal because it is choosing the stock market listing approach has ended up undervaluing the resource by more than 65%. This is because investors on the stock market have other instruments to tap into gold’s positives.
2. Hence we propose that the deal be done through a beauty parade where we invite several royalty streaming companies to bid directly. We have examined dozens of transactions in recent times and have concluded that Ghana shall make more through a beauty parade than through the stock market.
3. Also, the legal terms of the transaction are still skewed against Ghana. Despite the AG’s attempts, skewed provisions remain. Ghana will have very little say in the company’s choice of investment options.
4. We should strongly limit the total amount of royalties we want to sell upfront in order not to simply defer our debts to succeeding next years due to revenues from minerals plummeting as a result of this transaction. Dividends are tiny and unreliable. Royalties are more stable.
Please see full statement IMANI_Alert_Agyapa_Royalties_Aug_2020_final.pdf