CGNPC subsidiary provides $214 million loan to Epangelo Mining Company to facilitate its acquisition of a 10% stake in Husab Uranium Mine (Linked to Project ID#1425 and #61252)

On January 30, 2012, China Development Bank (CDB) provided a $2.115 billion loan to Taurus Mineral Limited, of which $1.175 billion was used to acquire the Hushan uranium mine (湖山鈾礦, Lake Mountain) from Extract Resources (Pty) Ltd. Taurus Mineral Limited is a subsidiary 100%-owned by Miraculum Mineral Limited, a joint venture between China General Nuclear Power Corporation Uranium Resources Company (CGNPC-URC) (60%) and China-Africa Development (CAD) Fund (40%). CGNPC-URC is a wholly owned subsidiary of China Guangdong Nuclear Power Group and CADFund is an equity investment fund 100%-owned by China Development Bank Corporation. Extract Resources (Pty) Ltd is an Australian company that owned Swakop Uranium (Pty) Ltd, a project company that it established to explore, evaluate, develop, and produce uranium oxide at the Husab Uranium Mine. Taurus Mineral Ltd. made an official acquisition offer to Extract Resources (Pty) Ltd on February 14, 2012. Then, on April 13, 2012, Extract Resources (Pty) Ltd announced that its securities would be removed from the official list of ASX Limited, meaning that Taurus Mineral Limited had successfully acquired a 98.37% ownership stake Extract Resources (Pty) Ltd (and by extension the Hushan uranium mine). After Taurus Mineral Ltd. became the majority shareholder in Extract Resources (Pty) Ltd and thus the majority shareholder in Swakop Uranium (Pty) Ltd, it provided a $214,920,326 loan — through Extract Resources (Pty) Ltd -- to Epangelo Mining Company (a Namibian state-owned company) to facilitate its acquisition of a 10 percent stake in the Husab Uranium Mine. This loan agreement was finalized in November 2012 and its face value was increased to $258,920,326 in 2015. The loan carries a 15 year maturity and an interest rate of 6.155% (calculated by adding the average LIBOR rate from November 2012, .155, with a 6% margin= 6.155%). It is to be repaid by Epangelo Mining Company with future dividends from the Husab Uranium Mine Development Project over a 15 year period. The purpose of the Husab Uranium Mine Development Project (also known as the Husab Uranium Project) is to make Namibia the second largest uranium producer in the world. Project ID#61252 captures the $1.175 billion loan from CDB. This project records the $258,920,326 loan from Taurus Mineral Limited via Extract Resources (Pty) Ltd. The Husab Mine is currently under construction and was scheduled to produce its first uranium in the first quarter of 2016. Commencement of mining operation has already started as of 8 March 2014. The mine was scheduled to commence cold commissioning in 2015 but the process has been delayed due to commissioning-related problems.

Additional details

1. The all-in interest rate that applies to this loan (6.155%) was estimated by taking the average LIBOR rate during the month (November 2012) when the subsidiary loan agreement was finalized (0.155%) and adding a 6% margin. 2. The CADFund component of this investment is captured via Project ID#68595.

Number of official sources

5

Number of total sources

17