LONDON – West Africa-focused junior gold miner Toro Gold has hired boutique investment bank Raymond James to explore putting itself up for sale after shelving plans to list its shares in London, two sources with knowledge of the matter said.

But attracting buyers won't be easy for the company that has just one producing asset in Senegal and is targeting a valuation of up to $300-million, the sources added.

Toro Gold started preparing last year for a London listing, sources said at the time, but it is now exploring a sale as initial public offerings of small capitalisation miners are no longer generating interest, even to risk-seeking investors.

The company declined to comment and Raymond James did not respond to a request for comment.

Toro Gold started production from the Mako project in Senegal in 2018, eight years after discovery, with a total 157 000 oz mined. It is further exploring in Senegal, Ivory Coast and Guinea.

The company said on its website that it had achieved production ahead of schedule and under budget.

One of the sources said that the life of Toro Gold's producing mine is under ten years, which makes it less appealing to potential buyers.

The gold market has been undergoing a wave of consolidation, with the need to bolster shrinking gold reserves to boost growth and take advantage of stable gold prices providing impetus.

Newmont Mining Corp took over Goldcorp to create the world's biggest gold producer and Barrick Gold Corp agreed to buy Africa-focused Randgold Resources.

Producers who have good assets but face stagnant growth are seeking partners.

Small mining companies, however, often struggle to balance the heavy spending needed to get mines up and running with a lack of revenue, meaning some need regular capital injections.

For smaller companies, trying to find a buyer could prove more difficult as acquirers remain cautious due to high levels of investment these require to generate growth or become profitable.

London and Toronto-listed Atalaya Mining and private equity backed Chilean miner Mantos Copper have been on the block for many months, sources said.