Africa-Press – Namibia. Trustco Group Holdings‘ shares have rallied over 140% in the past week after the company announced a $75 million coinvestment in its Meya diamond mining project in Sierra Leone.
Trading at 58c per share prior to the July 27 announcement, Trustco’s stock closed at 140c yesterday as investors cheered the transformative investment. This massive 140% increase has resulted in a boost of over N$808 million in shareholder value in just one week. Foreign shareholders gained N$ 453 million, the van Rooyen family N$ 310 million, while Trustco staff and other local shareholders are N$ 45 million richer. The deal aims to fast-track diamond production at the underground Meya mine.
“This momentous rally in Trustco’s share price shows investors recognise the immense value unlocked by our strategic investment in Meya Mining,” said Quinton Zandré van Rooyen, Deputy CEO of Trustco Group Holdings. “While reaching 140 cents per share shows market confidence, Trustco remains undervalued relative to our published Net Asset Value per share of 161 cents. With Meya rapidly scaling up high-margin diamond production, Trustco is poised to continue creating significant shareholder wealth as the market realizes the full extent of our upside potential,” he continued.
Meya holds a large-scale mining license spanning 129 km2 in Sierra Leone’s prolific eastern diamond fields with an estimated resource of 7 million carats with a more than US$300 per carat price. The capital will facilitate key enhancements like a new NIR waste sorter and expand plant capacity.
Analysts at investment management company, Covest Wealth 3.0, state that the deal provides cash flow for increased output while retaining upside potential through Trustco’s 19.5% stake in Meya. With first production achieved this month, the mine is set for sustainable high-margin diamond production, a solid investment for the company.
The rally in Trustco shares is indicative of investors’ optimism, being that the company will actualise significant value from its early-stage Meya investment. The robust investor response, with resultant share price spike, not only reflects confidence in the mine’s long-term potential but also the group’s diverse investments portfolio.
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