Epangelo misses out on Otjikoto
Despite widespread panic in the mining industry following the establishment of state owned Epangelo mining company which was set to have a stake in all strategic minerals in the country, the company is in the lurch once again after failing to secure a stake in the Otjikoto Gold project.
Canadian Junior gold miner, B2Gold recently snatched a 92% interest in the Otjikoto Gold Project in a deal in which all of the issued and outstanding common shares of Auryx were transferred to B2Gold including a cash payment of US$0.001 for each Auryx share.
The other 8% shareholding in Otjikoto is owned by black economic empowerment group, EVI mining led by Dr Leake Hangala, Joshua Kaitungwa and businessman Sidney Martin.
In November last year, Epangelo was again left out in the cold after reports emerged that Swiss-based commodities trader, Glencore had been offered Exxaro’s 50.04% stake in Rosh Pinah Zinc and Lead mine in a deal worth US$56 million.
Epangelo MD, Eliphas Hawala told the Economist this week that the state owned mining company did not have money to buy a stake in the Otjikoto gold project. He said: “They (Auryx Gold Corp.) came to approach us. They gave us the terms for our involvement and we don’t have the money so we are moving on to other projects.”
Although he refused to disclose the terms of the offer from Auryx citing confidentiality, Hawala said it was rather cheaper to develop their own projects instead of buying developed projects. “We have our own EPLs that we are exploring for Gold and other minerals. If you buy existing projects, they are more expensive because there has been development already but if you have your own EPL all you need to do is sampling, desktop studies and drilling which is much cheaper.
“Auryx has done that and now they are selling, so why must you now buy at that level instead of getting your own EPL and do what Auryx is doing?” Hawala questioned.
The Epangelo MD said they were granted 17 EPLs in November for various minerals, including gold while 18 are still pending. “So we are now doing those things that I have mentioned (sampling, desktop studies and drilling) and then promote them (the projects) to investors.”
Meanwhile, briefing journalists in Windhoek last Friday, Clive Johnson, President and CEO of B2Gold said the B2Gold Board of Directors have already approved a budget of US$38 million for exploration and project development that includes: developing a technical feasibility study; increasing staff in both Windhoek and the areas around the project; capital expenditures for long lead time items; additional exploration designed to extend the mine life (remembering that the Preliminary Economic Assessment included a mine of more than 10 years) and capital construction projects that can be completed to expedite the project.
The company also announced that it will “amplify” its mining license application around June. The initial application was sent to the Ministry of Mines and Energy in September 2010.