The financing is linked to the gold miner’s ESG (environmental, social and governance) performance – specifically its carbon emissions and its commitment to promote more women into senior roles.
Gold Royalties said it is taking its offer directly to Elemental’s shareholders after its two previous approaches to the junior failed to engage Elemental’s board of directors.
Burkina Faso produces 34 tonnes of artisanal gold per year, but only 300kg was formally exported in 2019 due to a lack of traceability and lower export taxes in neighbouring countries.
The shift to risker and less liquid assets strengthens the case for an allocation to gold, given its unique combination as a highly liquid diversifier, that can reduce portfolio volatility, the World Gold Council says.