(Bloomberg) -- India's Deccan Gold Mines Ltd. has rallied to its highest share price since 2008 after it went on a global buying spree following a struggle to mine locally.
Stock in Deccan has jumped more than 40% in July — far outpacing the 3.5% gain for the benchmark S&P BSE Sensex Index. India's sole lister gold miner purchased stakes in Kyrgyzstan's Avelum Partners LLC and Finland's Kalevala Gold Oy earlier this month.
Those acquisitions follow other deals in the past year, including a partnership with UAE's AK Corp. for a processing plant, and a stake in Geomysore Services (India) that secured the license for a gold mine in Andhra Pradesh state.
The Kyrgyzstan and Andhra Pradesh mines are expected to start full-scale production from next year, Managing Director Hanuma Prasad Modali said in an interview. “That will start giving revenue to the company,” he said, adding that the Finland assets will take another three years.
Deccan is planning to raise about $20 million in the next 12 months from institutional investors and high-net worth individuals, he said, adding its also open to selling a stake in the company.
Since its inception in 2003, Deccan has dug up only a few kilograms of gold on a pilot basis in India. Its state-level mine permits were slow to materialize and it endured legal battles after prospecting licenses it owned were scrapped by the government.
The Gold Miner Excavating Nothing But 13 Years of Red Tape
Frequent changes in mining policies have been a key challenge in India, deterring global companies like Rio Tinto Group from investing, Modali said. He urged the government to produce separate policy for precious metals.
Deccan is also exploring some small projects in Tanzania, but further acquisitions will only be considered after current assets start production, he said.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
