Mali holds a treasure trove for gold investors

Gold bars

Gold mines in Mali are an underexploited treasure trove for commodity investors, the supervisory board chairman of German-listed Pearl Gold told Reuters in an interview.

"Mali is certainly one of the most promising locations for gold mining at present," Robert Goninon said.

"Other countries like Guinea, Ivory Coast, Burkina Faso, Mauritania and Ghana offer lucrative gold mining opportunities too, but Mali's political stability and legal framework sets it apart from its neighbours," he added.

Regulation in Mali ensures that both nationals and non-nationals can exploit deposits under the same conditions -- a privilege not always granted to foreign investors.

Pearl Gold, a holding company listed on the Frankfurt stock exchange at the end of 2010, focuses on investments in West African exploration and mining corporations, especially in the field of gold and other precious metals.

It has a market capitalisation of around 230 million euros.

The group already holds a 25 percent stake in Malian company Wassoul'Or S.A, which operates the Kodieran mine that it believes to contain about 1.75 million ounces of recoverable gold.

"Our short-term aim is to start industrial-scale gold production in Kodieran," Goninon said.

Pearl Gold is also eyeing other mines as acquisition targets, he said, but declined to name specific mines or companies.

Goninon said the company aims to climb into the more regulated sector of the bourse, the General Standard, by the end of the year and is also weighing the option of a capital increase.

"We chose Frankfurt as a trading platform because of its reputation for efficiency," he said.

If Pearl Gold successfully passes into the General Standard, it would be the first natural resources company on that index in Frankfurt.

Goninon said the rally in the gold price is not likely to end.

"Gold has looked like a bubble a number of times in the past, but it has always been able to consolidate," Robert Goninon told Reuters on Friday.

Unlike the Swiss franc, which has similarly lured investors as the euro wilts due to the continent's peripheral debt crisis, gold will not lose value due to its immunity to inflation, Goninon said.

"Money can just be printed, while gold is a finite resource, meaning it will retain its value," he added. Reuters