Epangelo to pay back N$2 billion with dividends from Husab stake

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Edgar Brandt

Windhoek-Epangelo Mining, the state-owned mining company, says it will pay back over N$2 billion it borrowed to acquire a 10 percent stake in the Husab Uranium Mine, by using the dividends it receives from the Husab mining operation.

Husab Mine in the Erongo Region produced its first drum of yellowcake (uranium oxide) at the end of December 2016 and is set to reach full production this year. Once in full operation, Husab will be the largest open-pit uranium mine in the world.

According to Epangelo Mining’s CEO, Eliphas Hawala, the repayment period depends on the revenue generated, which in turn is a function of the uranium price and quantity of uranium produced at Husab.

“There is no legislation that provides for automatic participation of Epangelo in any mining venture, but transactions are carried out on a commercial basis. We have been lobbying for certain minerals to be declared strategic and for Epangelo to have a stake in these minerals on behalf of the Namibian people (at no cost).

“We are a private company that is wholly-owned by the Republic of Namibia… but we do not make government policies. Our mandate is to execute whatever policy is in force at the moment,” said Hawala in response to questions sent by New Era.

LÄNGER HEINRICH MINE

He reiterated that there is no legislation conferring rights to Epangelo, when asked whether the company would be interested in acquiring a 10 percent stake in the Länger Heinrich Uranium Mine, owned by Paladin Energy.

Paladin, which owns 75 percent of the issued share capital of Länger Heinrich Mauritius Holdings, the holding company of the Langer Heinrich Mine, which was recently requested by CNCC Overseas Uranium Holdings to determine the fair market value of its stake in the mine, indicating it may pursue an option to acquire this interest.

This follows Paladin’s announcement regarding its restructuring proposal and a potential option in favour of CNNC Overseas Uranium Holdings, which could give the company the right to acquire Paladin Energy’s interest in the Länger Heinrich mine “in certain solvency-related scenarios”.

Paladin Energy said the process of determining fair value would be the first step in a process that may lead to the exercise of the potential CNNC option.

In January, Paladin Energy said it would restructure its balance sheet, which will in turn reduce its debt obligations and extend the maturity of its debt. The company added that in the absence of further progress with the potential sale of a 24 percent interest in Länger Heinrich, the purpose of the restructuring is to address the upcoming maturity of its outstanding US$212 million convertible bonds, which are due on April 30.

The uranium miner said in July 2016 that it plans to sell a portion of its interests in two of its projects to raise in excess of US$200 million.

As part of Paladin Energy’s strategic initiatives with regard to partnerships, investment, funding and transactions, the company had proposed the sale of 24 percent of its Länger Heinrich Mine, as well as the potential sale of an Australian mining operation.

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