News

January 19, 2009

Mano River Resources Charts A New Course In Gold, Iron Ore And Diamonds, Backed By Russian Money

By Alastair Ford

These days, says Luis da Silva, “you have to fight that bit harder for every dollar that you try to raise”. There are plenty of people out there who are finding this out the hard way right now, either watching as their companies gradually slip away from them – what price Cambridge Mineral Resources anybody? – or else biting the bullet and accepting financing terms that would have been unthinkable two years ago – well done to Metals Exploration and Freegold Ventures for facing up to new realities. Luis da Silva has been working hard too, to fund Mano River, the company he joined back in February 2007, and which he took charge of in October of the same year. But the issues he’s been facing are slightly different. That’s because since early 2008 Mano River has been cosying up to a rather wealthy Russian partner - Severstal. The Severstal financing of Mano River has been complex, tough to negotiate, and has its own quirks, but when all’s said and done it has left Mano, one of the Aim market’s venerable old-timers, looking rather more secure than some of its arriviste peers.

Severstal is, as Luis is at pains to point out, one of the most transparent of the Russian conglomerates to London eyes, due to the listing on the London stock exchange of its GDR.  Thus we can work out in fairly easy back-of-the-envelope fashion that the man pulling the strings at this giant integrated mining and steel concern, Alexey Mordoshov, is sitting on theoretical losses that have racked up to around US$20 billion since the credit crunch began. Ouch! - that mighty financial pain...