Osino Resources Corp (Osino) says limitations of the Namibian domestic market in securing funding from local institutions were a key factor in seeking external financing for the development of its Twin Hills project.
This comes as the gold exploration company is close to finalising its acquisition by Chinese company Yintai Gold Co in a N$5.3 billion cash deal.
“We tried to raise money from Namibian institutions in September last year and managed to raise around 1/10th of what we were aiming for,” Osino Founder CEO Heye Daun said in his first comments on LinkedIn following the Yintai deal announcement.
He said this was because of the capital-intensive nature of mine development, with the Twin Hills project’s overall capital cost estimated at approximately N$7 billion (C$494 million, including C$46 million contingency and C$24 million capitalised pre-strip).
“Developing a gold project is a highly capital-intensive undertaking and this type of capital is just not available in Namibia. The project needs major capital to get built, and this type of capital is just not available in Namibia. It is thus logical that the project will get developed by a foreign entity, which in this case happens to be Chinese. Look at Swakop Uranium and Rossing Uranium, both very ethical, capable and responsible mining companies operating in Namibia. Both companies invested when no-one else wanted to. I think both companies have been good for the Namibian society and economy. I think Yintai and Osino will be no different,” Daun said.
He said despite the imminent acquisition by the Shenzhen Stock Exchange listed company, Namibians and the country’s economy will indirectly benefit through the development of the mine through jobs and taxes.
“When Osino’s Twin Hills project gets developed, Namibians will benefit (they already are) from procurement of goods and services, salaries and taxes, training, et cetera. All of this will be forthcoming regardless of which foreign entity ends up developing the project,” he said.
“All that counts is that the development is done in a responsible and patriotic (giving Namibians the opportunities first, where possible) manner. This will happen with Yintai soon being in charge.”
He said the Yintai deal will also benefit Namibian shareholders, with the company having dual-listed on the Namibian Stock Exchange (NSX) in August last year.
“By the way, already a significant part of Osino is owned by Namibians, in shareholding, and they are benefiting that way, too,” he said.
Yintai emerged with a superior offer after Dundee Precious Metals in December had entered into a definitive agreement to acquire Osino Resources for N$4 billion.
As part of its offer, Yintai Gold has offered an immediate cash infusion for Osino of N$193 million (US$10 million) for operations and working capital needs and the reimbursement in full of the termination fee paid to Dundee Precious Metals Inc (DPM).
Osino’s portfolio consists only of gold-related assets located in Namibia, primarily the Twin Hills Gold Project in central Namibia as well as exploration projects in Ondundu and Eureka. The Yintai deal is still subject to Chinese outbound investment approvals and Namibia regulatory approval.
