Founded by aspirant, 32-year old female entrepreneur OLEBOGENG SENTSHO, the Simba Mgodi Fund is an incubation fund designed to support emerging entrepreneurs in mining and mining services.
Run closely by Sentsho as CEO, it is blazing a critical trail in South Africa’s mining industry, writes CHANTELLE KOTZE.
By offering an innovative crowdsourcing-based funding model specifically aimed at youth and women-owned businesses, the Simba Mgodi Fund (SMF) provides entrepreneurs with the much needed start-up capital and seed funding that is most critical to their successful establishment but which is hardest to come by.
The aim of this fund is to invest in ‘miners of the future’ and simultaneously spark a wave of modern industrialisation in one the country’s most critical economic sectors.
Sentsho, who is also the founder and head of operations at Yeabo Mining, a strategic waste management company that processes tailing from old and abandoned mines with plants in and around Limpopo, identified the need for a mining-focused incubation fund when she herself hit a brick wall when trying to raise the capital required to establish her first business.
“In the current economic dispensation of South Africa we do not have the necessary pillars of credit to support investment – and unfortunately Greenfield projects, or mining start-ups are deemed too risky to invest in by traditional funders,” says Sentsho.
“Through the creation of SMF, I want to ensure that other young, aspirant mining entrepreneurs avoid having to face the funding challenges that I did when starting my business, and so the SMF was born.”
Addressing the compelling challenge of funding in the mining industry head on, Sentsho turned to modern, innovative technology as a means to do so.
The SMF incorporates a crowdfunding platform as part of its business model, aimed at raising money from multiple smaller individual investors rather than one large investor, coupled with blockchain technology as a means to issue “stock” to investors that is protected by blockchain technology to record the transaction and ‘stock’ value,” Sentsho explains.
The SMF provides funding solutions for entrepreneurs, capital for large projects, debt financing for mining contracts and projects funding across four investment strategies:
Mgodi 1 is a standard financing model propelled by streaming contracts with large traders for upfront investment.
Mgodi 2 is a balanced strategy investing across a broad range of asset classes including property, machinery and infrastructure.
Mgodi 3 is a diversified income strategy that will focus squarely on contract finance over a minimum of three years. This strategy will seek attractive current income while providing broad diversification and high potential for growth of capital.
Mgodi 4 seeks attractive current income and long term preservation of capital through investment in mining ownership and acquisition of strategic assets for intensified capital growth.
The aim of the SMF is to grow the junior and small-scale mining sector in South Africa exponentially over the next five years, says Sentsho, who believes that the SMF could be instrumental in helping South Africa reclaim its stake as an important mining jurisdiction in Africa.
Claiming her stake as a young leader
Sentsho is passionate about investment, the African economy, mining and socially responsible business practices – passions that were apparent in her 10-minute presentation during the inaugural Leaders of Tomorrow competition held on Day 3 of the 2019 Investing in African Mining Indaba conference – aimed at recognising young leaders and innovators in the mining industry.
Competing against three other students, academics and young professionals all vying for the accolade, Sentsho was declared the winner of the competition – a title that affords her two hours of mentoring time from each of the competition judges, which included Tom Albanese (Franco-Navada director), Deshnee Naidoo (Vedanta Zinc International CEO), Adam Habib (University of Witwatersrand vice chancellor and principal) and Carol Cable (Brunswick partner and co-head of mining practice).
“We need disruption [in the mining industry],” she says, and calls on other young leaders to come forward and change the future of the industry for the better.
Sentsho believes that a more structured and Afro-centric approach to mining will grow the African economy and her objective is to create other industrialists throughout Africa who share the vision of a prosperous and economically active continent driven by Africans for Africans.
The right skills for the job
Sentsho serves as the head of the Mining and Technical Engineering Services Sector at the Progressive Youth in Business Organisation and also serves as the finance champion on the Deputy Minister of Mineral Resource’s Technical Secretariat for the evolution of Funding Models for Junior Miners in South Africa, providing her with both the technical and financial knowledge needed to understand the intricacies of funding junior miners.
Having studied Law at the University of the Witwatersrand gives her a unique edge as it allows her to structure deals with precision; cognisant in mining, law and finance. Sentsho is currently completing her Msc. in Mining Engineering at the University of the Witwatersrand.