Epangelo Mining was formed to hold shares in the mining sector on behalf of the government, has been selling its exclusive prospecting licences to raise money.
It is a private company incorporated in the Republic of Namibia under the Companies Act (Act 61 of 1973).
Epangelo became operational by Cabinet Resolution 20th/27.10.09/001, which Resolution also appointed the first Board of Directors on 27 October 2009.
The Government of the Republic of Namibia is the sole shareholder. The Company was declared a Public Enterprise in May 2013 under the Public Enterprises Governance Act 2006 (Act 2 of 2006).
Epangelo CEO Eliphas Hawala told the parliamentary workshop at Swakopmund in late May that the state-owned company has been finding it challenging to get EPLs and has had to buy just like any other entity.
When Epangelo was established in 2008 to explore mineral resources on behalf of the government, it had 40 EPLs. In its 2020/2021 annual report, Epangelo said it had 29 active EPLs and two EPL applications, but at the end of March 2021, only 12 EPLs remained.
Currently, Hawala said Epangelo has about 10 EPLs.
According to Epangelo’s annual reports, the company lost 10 EPLs from 2018/2019 to 2019/2020 due to non-renewal.
During the 2019/2020 financial year, the company applied for and was granted two licenses (EPL 6361 and 6362) for base, rare, and precious metals prospecting.
The EPLs are in the Opuwo District in the Kunene region (prospective for the exploration of base metals and precious metals), and one EPL is located offshore in the Lüderitz district (for diamond exploration).
The company also has stumbled upon a gold deposit in the Daures constituency whose value is estimated to be about N$70b. Epangelo will only have a 20% stake when the mine starts production.
Hawala said they did not know if they could continue selling EPLs to raise money or if the government has to develop legislation that would compel mining companies to give the government automatic shareholding.
Epangelo has five special purpose vehicles used to form joint ventures. There is the JG Investments Sixteen (Pty) Ltd; JG Investments Fourteen (Pty) Ltd; JG Investments Five (Pty) Ltd; JG Investments Three (Pty) Ltd; and JG Investments Four (Pty) Ltd.
The company has 10% shares in Swakop Uranium through the Epangelo Husab Uranium and another 7,5% in QKR Namibia through JG Investments (Two) (Pty) Ltd. QKR owns the Navachab Gold Mine.
Epangelo owns 8% of Sakawe Mining Corporation (Pty) Ltd, 10% of Manila Investments (Kombat Mine) and 5% of Yellow Dune Uranium Resources, which is a subsidiary of Reptile Uranium Namibia and Epangelo which owns EPLs 3498/3499.
Epangelo’s 2020/2021 report shows that JG Investments Three Proprietary) Limited. JG Investments Five (Proprietary) Limited. G Investments Fourteen (Proprietary) Limited had been dormant for about four years.
Hawala said even with the 10% Epangelo has in Swakop Uranium, they had to borrow N$2b from a Chinese partner to buy the shares, while the EPL belonged to somebody else.
Swakop Uranium was a subsidiary of the Australian company Extract Resources, which had 43%, Kalahari Resources had 42,7%, Rössing had 14,22%, and the Japanese company Itochu owned 10,30%.
Extract Resources founded Swakop Uranium in 2006 and discovered the mine on EPL 3138 in 2008.
The mine was called the Rössing South until November 2010, when Extract Resources decided to rename it to Husab Uranium Project to distinguish it from Rössing Uranium Mine.
In one of the local languages, Husab loosely translates to a place of a water hole.
The mines ministry approved Extract Resources’ mining licence 171 in 2011 when the environment ministry also granted the company an environmental clearance certificate.
In December 2011, Taurus Minerals, a subsidiary of China state-owned China Guangdong Nuclear Power Corporation, acquired Kalahari Minerals’ shares in Swakop Uranium.
Taurus Minerals subsequently acquired Extract Resources’ shares in Swakop Uranium in April 2012.
The mines ministry, however, wrote to Extract Minerals that out of its 100% shares, Epangelo should own 10%.
Epangelo Mining had no money and had to secure a N$258 920 326 (US$1,9b) loan with no government guarantee. The government only paid N$5m in transaction costs.
Taurus Minerals and Epangelo signed a cession and pledge agreement to protect the loan.
“We went in to get 10% on behalf of the government; it took us about a whole year to negotiate because we don’t have the funding,” Hawala said.
Husab mine’s life is estimated to be 20 years if further exploration is done.
In 2017, Hawala told New Era that 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.
“At the moment, there is a vacuum; we don’t know if we have to continue on the commercial route where we are to give away our shares in exchange for money or whether there would be some legislation,” he said.
Hawala said they were pushing for legislation to be put in place to give the government an automatic share in at least the strategic minerals so Epangelo would not have to compete with rich people.
Epangelo’s 2021/22 annual report says given the sharp drop in the price of natural uranium and the volatility of the Namibia Dollar exchange rate, the company has not received any dividends.
The QKR/ Navachab deal
He further said they also borrowed money to buy the 7,5% shares of QKR Namibia for the ownership of Navachab Gold Mine in October 2014.
Former JP Morgan Chase banker Llyod Pengilly’s QKR Corp bought Navachab Gold Mine from AngloGold Ashanti for US$110 million in June 2014.
Five months later, QKR Corp agreed to sell 7,5% to Epangelo for an undisclosed amount. QKR Corp, however, agreed to finance the loan, which Epangelo said they would pay off using their dividends.
According to the agreement, Epangelo is supposed to receive 10% of its dividends two years after the start of operation. In addition, Epangelo has one seat on the QKR Namibia board.
Kombat Copper Mine
Epangelo has a 10% stake in Trigon Metals, which now owns the Kombat Copper mine. Ongopolo Mining owned the Kombat mine until 2006 when Weatherly Mining acquired it. The mine was flooded in 2008, leading to the abandonment of operations.
A South African company, Grove Mining, took over in 2009, but in 2012, the company was ready to sell to Kombat Copper. Manila Investments, owned by businessman Knowledge Katti’s Havana Investments and Epangelo, acquired 10% each of Kombat Copper.
On 28 December 2016, Kombat Copper changed its name to Trigon Metals.
In one of its annual reports, Epangelo says the other shareholders in the Kombat Copper Mine are Trigon (80%) and Sinco Investments Twenty-Nine (10%).
Restarting Kombat Mine has not been easy for Trigon Metals since 2017 when it started preparing to reopen the mine.
The mine started operations in October 2021 after 14 years of dormancy. In August 2022, Trigon suspended operations at Kombat, saying it wanted to reduce costs by revising its mine plan. Operations at Kombat restarted in May 2023.
Weatherly Resources
Before Epangelo was formed, the government had a 2,6% stake in Weatherly International, which owned Tschudi copper mine near Tsumeb.
These shares were transferred to Epangelo. Other shareholders in Weatherly were Orion Mine Finance (24,6%), Logimna (7,3%), Polo Resources (5,2%), Christopher Chambers (4,3%), while directors Craig Thomas, John Bryant and Alan Stephens had 0,46%, 0,07% and 0,03% respectively.
Other shareholders are Investment Holdings (2,5%), Pre-Weatherly Namibian (1%), Bank Windhoek (0,6%)
In January 2020, Orion cut down funding, citing unviability. At the time, Weatherly owed Orion US$140m. The company said operations would cease in March 2020, but Tschudi mine has been under care and maintenance since then.
Dundee Precious Metals
The Namibian government also had shares in Weatherly International through its subsidiary, Namibian Custom Smelters (NCS), regarding the ownership of Tsumeb Smelter. These shares were transferred to Epangelo.
In 2010, Weatherly sold the Tsumeb smelter to Dundee Precious Metals for US$33m. On 28 June 2013, Dundee Precious Metals Inc. renamed the Namibia Custom Smelters company to Dundee Precious Metals Tsumeb.
Epangelo said Dundee is their only profitable venture to date.
From the annual reports
The two companies formed a Special Purpose Vehicle (SPV), whereby Epangelo holds 20% of the shares and Minexus 80%. The joint venture allows the development of six EPLs, 4792, 4803, 5029, 6361 and 6362.
Epangelo also agreed with Hebron Prospecting on a framework whereby Epangelo was issued 10% shares in Hebron on a free carry basis. The joint venture allows for the joint development of EPLs owned by Hebron.
Hebron agreed to fund exploration. By the end of 2021, Hebron had paid a dividend of N$50,000 to Epangelo Mining.
Another merger was with Angra Fria Mineral Prospecting, whereby Epangelo was issued 10% shares in Angra Fria on a free carry basis. The joint venture allows for the joint development of EPLs owned by Angra Fria. Angra Fria provided all funding for exploration.
Tanga Resources Ltd has an option agreement to acquire 100% of the issues shares of Coldstone Investments Ltd, a Namibian registered company, which has a joint venture agreement with the Namibian government-owned Epangelo Mining Company Ltd, to earn up to 80% (with the ability to increase to 90%) of the highly prospective Joumbira zinc project in Namibia.
The acquisition of Joumbira represents an opportunity to secure an advanced, high-grade zinc-lead-silver project in the highly prospective and well-endowed Damaran Belt. The Company believes the acquisition will add significant growth potential to Tanga and expose shareholders to another high-grade project in an excellent African mining jurisdiction.
New Joint venture partnerships
Epangelo, during the financial years in question, was negotiating with Tanga Resources Limited and Resource 500V Limited.
Tanga Resources showed interest in three (3) EPLs 4818, 4833 & 7246, located in the Damaran Belt of Namibia, targeting gold skarn deposits.
The two parties agreed to collaborate on the above mention EPLs. On the other hand, a non-binding term sheet was signed between Epangelo and Resource 500V Limited.
This term sheet sets out the terms and conditions according to which Epangelo and Resources 500V agree to enter into a Joint Venture Agreement for the exploration and development of areas covered by EPL 4793, EPL 5261, EPL 5262 and EPL 5264; all these EPLs belong to Epangelo.
Drilling and Geochemical
Survey on EPL 4782 The EPL is registered under JG Investment Fourteen (Pty) Ltd, which is a joint venture company consisting of Epangelo Mining Company Propriety Limited (EMC) and Coldstone Investments (Pty) Ltd as shareholders.
In 2018 the Australian listed company Tanga Resources Limited acquired Coldstone Investments Limited and ultimately invested in drilling followed by geochemical sampling surveys on this project.
A drilling campaign kicked off in March 2018, funded by Coldstone. Seven diamond boreholes have been drilled and completed by mid-April 2018, totalling 886.70 m. The project has estimated ore reserves of about 4 million metric tons of zinc/lead/silver (at grades of 3.48% zinc, 2.47% Lead and 30g/t silver).
This drilling aimed to evaluate the nature of mineralisation and the potential size of the deposit. This result led the company to conduct alternative exploration methods, which involved collecting 100 samples (soils and rock chips) on EPL, and these samples were analysed for Zinc, Lead, Silver, Copper, Cobalt and Manganese in July-August 2018.
Epangelo signed a JV agreement with Damaran Exploration Namibia (Pty) Ltd. Since the inception of the JV between Epangelo and Damaran Exploration Namibia Pty Ltd (DEN) on the 4th of February 2019, DEN collected a total of 1,064 regional 500m by 500m soil samples, 172 rock samples and a second detailed soils grid of 100 by 25m (1,215 samples) followed by the year 2020 see figure 1. In addition, 14.28Km² of detailed geological mapping at 1: 10,000 scale has been completed as reconnaissance mapping.
Geological Mapping on EPL 4816 is registered under JG Investments Sixteen, owned by EMC and PAUA Investment Holdings Pty Ltd (PAUA). The primary target is similar to the Kopermyn deposit located in the Kamanjab district, Kunene region, which was mined from the early 1940s up to the end of 1961, a deposit that yielded approximately 3000t of copper ore averaging 7% copper and for the period 1953 to 1954, 620 t of hand-sorted concentrate assaying 25% copper was exported to Germany.
