State-owned mining company Epangelo is interested in acquiring shareholding in Länger Heinrich Uranium Mine, provided there is sufficient information indicating that Epangelo would not be incurring losses after purchasing shares in the mine.
A daily paper recently reported that Paladin Energy, the owner of Länger Heinrich Uranium Mine in the Erongo Region, is hoping to raise some US$200 million (about N$2.84 billion) through selling shares in the mines, including a 24% stake in Länger Heinrich.
Managing director of Epangelo Eliphas Hawala yesterday said as far as affordability is concerned, that is not a problem, as the company can raise the required capital to purchase the shares.
“We do not have capital of our own, but as mentioned that is not a problem. The purchase can be funded through debt,” Hawala said in response to questions posed to him by New Era.
“My understanding is that the company buying up the new shares is one of the current shareholders of Länger Heinrich,” he said, adding that this company has pre-emptive rights in case any shareholders wish to sell.
He said this is a common practice, particularly when a company is looking for cash.
Asked how much Epangelo Mining is worth, Hawala said it is difficult to put a value on such assets at this stage, as the mining company is still at an exploration stage of its licensed areas.
However, Hawala said, he can safely say they have used more than N$2 billion in debt financing to acquire shares in Swakop Uranium and Navachab Gold mine.
“These are long-term projects and it is early days to know if the company will be recovering our investments or not,” he opined.
Nevertheless, he said these investments are “ring-fenced”, which means they will not result in government having to cough up any guarantees or bail-outs, “as we have used shares as security for the loans.”
Hawala says in terms of other assets, such as properties, vehicles, licences and others, Epangelo’s assets are in the region of N$30 million.
Asked in what mining companies or activities Epangelo owns stakes, Hawala said the government-owned mining company currently has 10 percent shares in Swakop Uranium, the owner of Husab mine, 7.5 percent shareholding in Navachab Gold mine and also 10 percent in Manila Investment, a company that owns Kombat Mine.
He said Cabinet has also approved the transfer of Weatherly shares (owner of Tshudi Mine) to Epangelo Mining Company.
Further Cabinet approved the transfer of Samicor (the owner of LL Phosphate stationed in Lüderitz) shares to Epangelo Mining. He said the shares in Samicor amount to 8 percent, while the shares in Weatherly have been fluctuating at between three and six percent, depending on the trading of other shares in and out of Weatherly.
According to Hawala, it is only a matter of how fast the legal process will take before these shares are transferred to Epangelo Mining.
Asked what challenges the company faces, Hawala identified the main challenge as funding, as according to him, the mining company was not adequately capitalised from the start.
“This has a knock-on effect when it comes to recruiting of sufficient professional staff and carrying out exploration activities on all our priority EPLs (exclusive prospecting licenses),” he said.
Nonetheless, he said, the company is upbeat about what they have achieved so far and have learned to work much smarter and innovatively, even with the limited budget.
“I can safely say that having less money has been a problem, but it also taught us how to fend for ourselves when push comes to shove,” he added. “For instance”, he said, “we tendered to supply aggregate to TransNamib for their rail that is according to him is embroiled in controversy.”
“We have access to the aggregate they need through operations in Kombat, as well as in Navachab,” he said. He said unlike in the past, government does not need to beg for this material, as Epangelo can make it available at a highly competitive rate.
In return, he said, that would relieve the taxpayer from having to bail out or subsidise the company. “We can work for our own upkeep,” he said.
Hawala said Navachab aggregate, of which they own 7.5 percent, is also being used to construct the road between Okahandja and Windhoek.
“We want an opportunity to cash in on that material,” he said, adding that the trick is to ensure that Epangelo is capitalised, so that it can eventually extricate itself from government’s budget.
Epangelo Mining Company is a private company with the government of the Republic of Namibia as the sole shareholder.
The company’s primary objective is to be a premier local, regional and global mining asset management company and to occupy a significant position in major commodity businesses, inclusive of uranium, diamonds, copper, gold and various precious metals.