Uranium exploration and development company Madison Minerals CEO Duane Parnham believes the Namibian Ministry of Mines and Energy’s (MME’s) recent approval for the transfer of two exclusive prospecting licences (EPLs) proves that fears surrounding the nationalisation of the country’s mining and exploration assets are unfounded.
On June 6, the Namibian MME approved the transfer of EPL-8531 and EPL-8115 to Madison’s 85% majority-owned Namibian subsidiary PennyWort Investments, with the remaining 15% owned by Namibian partners.
EPL-8531 hosts the historical uranium resource published by consulting firm SKR Consulting UK in November 2015, which will be subject to a planned drill program that will seek to expand the reported resources over a 5 km target identified by surface mapping and geophysics.
“Namibia has shown that it is open for investment and has a proven policy that’s working for it. So any talk of nationalisation, I kind of brush it off as being rumour or hearsay. I don’t believe the government would attempt to take control,” Parnham said
This comes after Namibian Mines and Energy Minister Tom Alweendo told Namibian lawmakers on May 29 that the nationalisation of the country’s mines and exploration assets was being considered.
“We are making a case that local ownership must start with the State, which holds ownership of our natural resources. The proposed State ownership should take the form of the State owning a minimum equity percentage in all mining companies and petroleum production, for which it does not have to pay,” Alweendo said.
The Minister’s comments caused a stir, with the shares of uranium developer ASX-listed Paladin Energy, for example, dropping 20% in value on May 30, followed by a temporary suspension of trading.
Paladin owns a 75% controlling stake in the large-scale Langer Heinrich uranium mine, which has been mothballed since August 2018. The mine is to be restarted soon thanks to a A$180-million restart effort.
Paladin has since clawed its way back from the near A$400-million valuation drop, following Alweendo’s June 2 clarification that Namibia did not intend on nationalising its mines – at least in the traditional sense.
“The government has no intention to seize any stake from existing mineral or petroleum licence holders and remains committed to upholding the sanctity of contract,” he said in a statement.
Alweendo said Namibia would rather consider taking stakes in any mineral or petroleum licenses that may be issued in the future. This would be done through a public enterprise on behalf of the Namibian people, who are unable to directly invest in such projects.
Parnham believes all of this fuss is unnecessary, stating that his lengthy history of working in the country has secured his faith in its stability and security as a mining jurisdiction.
“I’ve always maintained a minimum 15% local partner participation in all the deals that I’ve done in Namibia over the last 22 years. It’s an unwritten rule.
“You need to have a mindset as a businessman going into Namibia; if you want to do work there and acquire projects to be part of that community, then you want to empower your local partners in your project,” he says.
EPL-8531 and EPL-8115 are in the renowned Erongo province, also known as the uranium province, where Madison already holds rights to EPL-7011 and has an agreement to acquire a 24% direct interest in mining license (ML) 121.
In addition to EPL-7011, EPL-8531, and EPL-8115, Madison has a binding agreement with an arm’s length vendor to acquire a 90% direct interest in ML86A and EPL-8905, with 10% free carry in favour of the vendor.
Madison’s land holdings near the well-known Rössing and Husab uranium mines have been consolidated under the property names Madison North and Madison West, with the goal of building upon mineable uranium resources by expanding currently known uranium zones and making new discoveries.
The acquisition of ML86A and EPL-8905 connects the Madison North and Madison West projects, resulting in a 427 km2 contiguous land package that is highly prospective for leucogranite-hosted uranium mineralisation, Parnham explains.