Wrap Text
Quarterly Activities Report for Period Ended 31 December 2019
Orion Minerals Limited
Incorporated in the Commonwealth of Australia
Australian Company Number 098 939 274
ASX share code: ORN
JSE share code: ORN
ISIN: AU000000ORN1
(“Orion” or “the Company”)
Quarterly Activities Report for Period Ended 31 December 2019
HIGHLIGHTS
- Prieska Project Mining Licence executed:
o Following the grant of the Mining Right to Repli in August 2019, notarial execution of the Mining Right was
completed in December 2019.
- Prieska Project water treatment trials, optimisation studies and operational readiness activities well
advanced:
o Positive water treatment and mine dewatering field trials nearing completion, with the results continuing
to demonstrate the potential to improve on the Prieska Project development execution timelines.
o Process plant value engineering works completed, confirming that SAG milling can further simplify the
process flowsheet.
o Plant layout changes will reduce the plant footprint area, contributing to a lower capital cost of
development.
o Key supply contracts negotiations under way, with two key Memorandum of Understandings signed, in
preparation for the Prieska Project construction approval.
- Prieska near-mine exploration:
o Soil samples collected over 17 priority areas selected from the Airborne Electro Magnetic (SkyTEMTM)
survey, covering the near-mine prospecting rights and regional sampling commenced.
- Australia - Fraser Range, Western Australia drilling in progress:
o IGO Limited (ASX: IGO) completed three diamond drill holes on nickel-copper targets on the Orion – IGO
Fraser Range Joint Venture tenements.
o Area D discovery reported by neighbouring company, Legend Mining Limited (ASX:LEG). Area D is
located just 16km south west of IGO:ORN Pike prospect.
- Corporate:
o Subsequent to Quarter end, Orion commenced a partnering process which contemplates the
introduction of a strategic project-level equity partner/investor in the Prieska Project. Macquarie Capital
appointed financial adviser to run the formal partner financing process on behalf of Orion.
o $9.5M capital raising initiatives completed during the Quarter:
- $7.75M raised via placements to sophisticated and professional investors; and
- Share Purchase Plan attracted strong support from eligible shareholders, raising $1.75M.
o Subsequent to Quarter end, private equity group Tembo Capital extended the term of the $3.6M Loan
Facility to 25 June 2020, confirming its continued support of Orion.
Operations Report
Orion Minerals Limited (Company or Orion) strives to achieve a sustainable balance between intense
operational effort and a strong focus on safety, health, environment and community.
Health and Safety, Environmental Management and Community Engagement
Health and Safety
No accidents or injuries were recorded during the Quarter. The hours worked for the Quarter and financial year
to date are shown below:
Table 1: Hours worked at the Areachap Projects (South Africa).
Hours Worked
Category of Work
Quarter Financial Year to Date
Exploration 13,385 27,254
Mine Re-Entry 2,841 6,310
Contractors 1,390 1,758
Total 17,616 35,322
The Lost-Time Injury Frequency Rate (LTIFR) per 200,000 hours worked is 2.17 for the 2019 calendar year.
Environmental Management
Work continued during the Quarter to secure approvals to commence mining operations at the Prieska Copper-
Zinc Project (Prieska Project), which is located within the Square Kilometre Array Radio Telescope Project (SKA)
area. The Electromagnetic Capability plan (EMC), a key requirement for the requisite approvals to be granted,
was approved by South African Astronomy Management Authority during the Quarter.
The EMC Committee that was formed last Quarter is progressing with the licencing workstream. The EMC
Committee is focusing its work on submitting permitting applications for the existing electronic equipment on site,
before the end of June 2020 in line with Government Gazetted instructions.
Subsequent to this, permitting of the planned equipment included in the proposed Prieska Project layout, will be
undertaken in order to have these permits in place prior to completion of mine development and the
commencement of mining operations.
Community and Stakeholder Engagement
The second meeting of the Orion Siyathemba Stakeholder Engagement Forum (OSSEF) was held at the Prieska
Project site in Copperton on 17 October 2019. The meeting was preceded by a familiarisation tour for the OSSEF
members of the surface and underground infrastructure. The OSSEF is the platform for representative community
interest groups to keep them appraised of developments at the Prieska Project.
During the Quarter, the Company initiated the recruitment process for a permanent Community Social
Development (CSD) Trainee to represent Orion in Siyathemba (to be based in Prieska). An appointment will be
made during Q1 CY2020 and the appointee will be trained and developed to fulfil the CSD role by Beulah
Africa, an established community development consultancy with significant mining industry experience.
Engagement with the community in the town of Vanwyksvlei, located approximately 60km south-west of
Copperton, continued during the Quarter with the extension of the introductory mining familiarisation short
course, facilitated by accredited service provider, Mathome Training and Development (Pty) Ltd, to this town.
Two, week-long courses were held, with participation and successful completion by 84 high school graduates. As
with the courses held in Siyathemba during Q2 CY2019, participants earned credits towards industry-recognised
mining-related qualifications. This brings the total number of successful course completions by Siyathemba and
Vanwyksvlei school leavers in 2019 to over 350.
The first Siyathemba Community Annual Sports Day was held successfully in Prieska in early December. The event
was the first event organised by a joint CSI Forum, which was initiated by Orion Minerals and includes three other
companies operating in Siyathemba: Copperton Wind Farm, Garob Wind Farm and the Mulilo Prieska Solar
Community Trust.
Attracting nearly 600 residents from the Siyathemba community, the Sports Day was held at the Prieska High
School Grounds, with netball played at the Prieska Primary Netball Courts. Sixteen teams participated in soccer
and netball matches on the day.
Gate entry fees raised proceeds which will be used to fund sports days in Marydale and Niekerkshoop during Q1
CY2020. Local businesses in the hospitality industry participated by setting up food stands and kiosks at the
event. A community teacher, photographer and physiotherapist volunteered their services on the day, another
reflection of the charitableness within the Siyathemba community.
The event also entailed the purchase by the CSI Forum of fifty food hampers which were distributed to 50 families
(10 per ward within Siyathemba), identified by the Department of Social Development and the Hospice, as
being in need.
Overview
During the Quarter, Orion continued work on its highly prospective South African projects, including focusing on
optimisation works, following the completion of the Prieska Project Bankable Feasibility Study (BFS) in June 2019
and exploration activity including soil sampling at the near-mine prospects and regional project, Masiqhame.
In the Fraser Range (Western Australia), Orion’s joint venture partner, IGO Limited (ASX: IGO), undertook
diamond drilling on nickel-copper sulphide targets identified from geophysical surveys.
Exploration and Mine Development
Areachap Belt Projects (South Africa)
Prieska Copper-Zinc Project
Project Overview
The Prieska Project continues to be the focus of the Company’s activities and is now at an advanced stage, with
a maiden Ore Reserve estimate and a BFS completed (refer ASX release 26 June 2019). Post-BFS activities
undertaken during the Quarter, included a focus on optimisation studies and preparations for mine construction
and securing project funding, with the intention to have the requisite licences to operate the mine in place by
end of Q1 CY2020, so that project construction can commence during 2020, subject to project funding.
Prieska Project Bankable Feasibility Study
Optimisation
Value engineering and optimisation studies being undertaken since the completion of the BFS are delivering
positive results, with key studies in progress including:
- Whittle Enterprise Optimisation – as outlined in the September 2019 Quarterly report, this process is
examining the Prieska Project’s entire business case with special focus on underground mining and the
ore processing plant activities. As the optimisation workstream has progressed, many options are being
developed and more time is being spent on this workstream which is now expected to be completed
before the end of January 2020. Thereafter, selected optimisations will be incorporated into updated
operating plans to determine a final business case, which will support the updated BFS Report, targeted
for completion in early Q2 CY2020.
- Value Engineering on the process plant – this workstream has been completed and a semi-autogenous
grinding (SAG) milling option has been selected to replace the previous ball mill design. As expected, this
has reduced both capital expenditure and forecast operating costs. A number of changes have been
made to the plant layout which has reduced the plant footprint area, also contributing to a lower capital
cost. The overall capital saving is estimated to be approximately $15M (ZAR150M), while the operating
cost saving is in the region of $0.80 (ZAR8.00) per tonne treated.
- Trials are nearing completion on water treatment which is expected to supplement forced evaporation
from the shaft de-watering process. Based on the trials completed to date, one last stage of fine tuning is
being tested that is expected to further improve the overall reverse osmosis process. This work is expected
to be completed early Q1 CY2020. The results will contribute to an optimised water handling strategy to
deal with the water pumped from the underground workings.
- The combination of the above activities will result in a revised Prieska Project business case being
compiled by the end of Q1 CY2020 and reviewed by independent experts during Q2 CY2020
Underground Mining Contract
In September 2019, Orion and Byrnecut Offshore (Proprietary) Limited (BOPL) concluded a Memorandum of
Agreement envisaging an alliancing agreement for underground mine development and production at the
Prieska Project. BOPL is involved in mining contracting work internationally and has previously operated in South
Africa.
Progress is being made with BOPL towards finalising an alliance agreement that will include underground mining
development and production services. With the expected successful completion of the alliance agreement
negotiations, these metrics will be incorporated into the revised Prieska Project business case and updated BFS
Report, as referred to above.
It is also envisaged that BOPL will supply and maintain the mining fleet and bring its experience in mining training
and upskilling of local employees as part of its operating model.
Process Plant Operations
During the Quarter, a Memorandum of Understanding was concluded with Minerals Operations Executive (Pty)
Ltd (Minopex), a process plant contracting company based in South Africa, that currently operates 46 plants
globally. Orion is aiming to appoint Minopex as the process plant contractor. If appointed, Minopex will bring
trained labour and management with the associated operating experience and procedures to the Prieska
Project, enabling a rapid production ramp-up.
Minopex will then continue running the plant, leveraging off its group level technical skills and utilising its bulk
purchasing power to source the most competitive pricing for the plant’s operating consumables. The details of
the engagement agreement are currently being negotiated, with the Company aiming to include the financial
terms of the engagement agreement into the updated BFS Report.
Mining Right Applications
The Mining Right was granted on 23 August 2019 to Repli Trading No. 27 (Pty) Ltd (Repli), for an initial term of 24
years, with notarial execution completed on 11 December 2019. The Repli Water Use Licence approval is being
processed by the Department of Water and Sanitation and is expected to be granted before the end of Q1
CY2020.
The granting of the Vardocube (Pty) Ltd (Vardocube) Environmental Authorisation is imminent, while the Mining
Right is anticipated to be granted during Q1 CY2020. No Water Use Licence is required for the Vardocube
applications.
Infrastructure
Power Supply – The Eskom approval letter for the 15MVA temporary power from the Cuprum sub-station was
received by the Company during the Quarter. This level of power supply will cover the construction phase of the
Prieska Project which will now proceed into detailed electrical design. As previously reported, at the last Eskom
Technical Evaluation meeting, the self-build upgrade to the Cuprum sub-station was approved for the 40MVA
power required for the operational phase of the Prieska Project. Orion is waiting on the formal approval letter
from Eskom.
Water Supply – The water use agreement was previously submitted to the Siyathemba Municipality and
approved in principle. Orion is awaiting the final agreed water tariff from the Municipality which is expected
during Q1 CY2020.
Deep Sulphide Resource
Following the previous Quarter’s work, re-assessment of the Inferred Mineral Resources, estimated to be 10.2Mt at
1.14% Cu and 4.08% Zn (and making up 36% of the estimated combined Indicated and Inferred Deep Sulphide
Resource of 28.7Mt at 1.16%Cu and 3.77%Zn)1, continued.
The Company’s focus remains to determine the most efficient way to upgrade these resources to an Indicated
Mineral Resource level of confidence. The Indicated Mineral Resource (18.5Mt at 1.17%Cu and 3.60% Zn) makes
up 64% of the total resource in the current mine plan (Figure 1).
Figure 1: Plan of the Deep Sulphide Mineral Resource showing the Inferred Resources included in the current mine plan.
A drill plan, designed to convert the Inferred Deep Sulphide Mineral Resources included in the mine plan to
Indicated Mineral Resources was formulated in late October 2019. The drill plan includes limited drilling on strike
extensions on the south eastern limits of the current Mineral Resource. Drilling both from surface and from
underground platforms was considered, with the following were taken into consideration:
1. the cost of drilling from surface compared with the cost of drilling from underground;
2. the Company’s intention to undertake all underground drilling from existing drives or drives that are in
the current mine plan;
3. areas enclosed by stopes planned in Indicated Resource areas will be covered by grade control drilling
once mining starts. These areas were excluded from the drill plan; and
4. areas adding the lowest cost per tonne to upgrade from Inferred to Indicated Mineral Resource were
given priority.
The results show that drilling from surface (aiming to convert 2.6Mt from an Inferred to Indicated Mineral
Resource level) would cost three times that of drilling from underground, therefore rendering the cost of a
surface program impractical. The underground drill program will consist of 14,200m to be drilled in 41 diamond
1 Mineral Resources reported in ASX release of 15 January 2019: “Prieska Total Resource Exceeds 30Mt @ 3.7% Zn and 1.2% Cu.
Following Updated Open Pit Resource” available to the public on www.orionminerals.com.au/investors/market-news. Competent Person:
Orion’s Mineral Resource: Mr. Sean Duggan. Orion confirms it is not aware of any new information or data that materially affects the
information included above. For the Mineral Resources, the company confirms that all material assumptions and technical parameters
underpinning the estimates in the ASX release of 15 January 2019 continue to apply and have not materially changed. Orion confirms that
the form and context in which the Competent Person’s findings are presented here have not materially changed.
drill holes. The estimated cost (including drilling and assays) will be in the order of $2.2M (ZAR22M). Exploration
drilling will focus in the south eastern section of the mine while the north western section will be covered entirely
in the grade control drill program (Figures 2 and 3).
Figure 2: Oblique view of the Deep Sulphide Resource showing the planned drill layout.
Figure 3: Oblique view of the south eastern section of the current Deep Sulphide Mine Plan showing the planned drill layout.
Near-Mine Projects
The near-mine projects are those projects within prospecting rights held by Repli, Repli (Doonies Pan),
Vardocube and Bartotrax (Pty) Limited (Bartotrax).
Volcanic Massive Sulphide (VMS) deposits worldwide tend to occur in clusters and, apart from the giant Prieska
Deposit, five smaller deposits occur on the near-mine project areas. These include Annex, explored by
Anglovaal between 1969 and 1981; three deposits on Doonies Pan (Kielder) explored by Newmont South Africa
between 1976 and 1979 and referred to as the PK1, PK3 and PK6 Deposits and the recently discovered Ayoba
mineralisation (Figure 4).
Figure 4: Surface plan showing the prospecting rights over and adjacent to the Prieska Project, and the location of the Annex, Kielder (PK1, PK3
and PK6) deposits and Ayoba Prospect.
Several Airborne Electro Magnetic or SkyTEMTM (AEM) anomalies were identified for follow-up work (refer ASX
release 25 February 2019). Programs of soil sampling and geological mapping were completed over the AEM
anomalies during the Quarter.
Soil Sampling
During the Quarter, 2,120 soil samples were collected (Figure 5). The samples were screened to -80 micron and
analysed using a handheld XRF analyser. Sample results will be reported once received from the lab and
reviewed by the Company. The results will be incorporated in the prioritisation of the AEM anomalies prior to
ground time domain electromagnetic surveys and diamond drilling. All of the AEM anomalies identified for
follow-up have now been covered by soil sampling and geological mapping, bringing the total number of
samples collected on the Near Mine Prospecting Rights to 6,064.
In addition, regional sampling, designed to cover the entire Prospecting Rights areas, is in progress.
Figure 5: Aeromagnetic maps covering the Near Mine Prospecting Rights with soil sample surveys completed.
Regional Exploration (South Africa)
Overview of Regional Activity
The Company maintains a substantial and prospective land holding in the Areachap Belt (Figure 6). The
Areachap Belt is analogous to other Proterozoic mobile belts hosting major VMS and magmatic Ni-Cu-Co-PGE
deposits.
VMS deposits almost always occur in clusters or “districts” associated with volcanic spreading centres, with four
such centres having been identified in the Areachap Belt. In addition to the Near Mine Project, the Company is
also prospecting for VMS deposits on the Masiqhame Prospecting Right (Figure 6). The Kantienpan and Boksputs
Zinc-Copper Deposits are the two most prominent known VMS deposits on the Masiqhame Prospecting Right.
Similarly, world-class nickel deposits tend to also occur in clusters both on prospect and regional scale. Within
these intrusive centres, a small number of the intrusions tend to host the best mineralisation depending upon the
intrusion magma-flow dynamics and timing of magmatic sulphide immiscibility and transport. Several mafic
intrusive bodies with nickel and associated metals are known on the Namaqua Disawell Prospecting Rights
(Figure 6).
The setting of mineralisation has been confirmed to be analogous to other orogenic-hosted, deep-seated
magma conduit complexes such as Kabanga (Tanzania), Nova (Australia), Ntaka Hill (Tanzania), Akelikongo
(Uganda), and Limoeiro (Brazil). Conduit style mineralisation is currently the top priority global target for
magmatic Ni-Cu-PGE sulphide exploration.
Figure 6: Regional geology map of the Areachap Belt showing prospecting rights held by, or currently under option to, the Company, and noted
mineral occurrences as per published data from South African Council for Geoscience.
Namaqua Disawell Project Area
Overview
The Jacomynspan Deposit (Figure 6) was discovered by Anglo American Prospecting Services (AAPS) in 1971.
Resource-definition drilling was carried out to a depth of 900m over 1.3km strike distance by AAPS, with
disseminated nickel-sulphide mineralisation having been intersected with widths varying between 30 to 70m
(refer ASX release 14 July 2016). Two other Ni-Cu deposits, Area 4 and Rok Optel, were investigated during the
1970s by AAPS, Newmont, Phelps Dodge and Hoch Metals. Subsequent and prior to the Company obtaining the
prospecting and mining rights, various companies including Anglovaal, Glencor, Gold Fields and Namaqua
Nickel explored the area. African Nickel and the Company conducted AEM surveys over the Prospecting Right
(refer ASX release 1 February 2018).
The Company followed up a number of AEM anomalies with ground time domain electromagnetic surveys and
prioritised the Rok Optel and Area 4 prospects for follow-up work (Figure 7, refer ASX release 3 July 2018). The
Company drilled four diamond drill holes at Rok Optel while the Area 4 targets still remain to be tested (refer ASX
release 24 October 2018). No field work was carried out during the Quarter.
Figure 7: Simplified geology map of the Namaqua – Disawell Prospecting Rights showing the localities of known Ni-Cu prospects.
Masiqhame Project Area
Contiguous to the north of the Namaqua-Disawell Project, this project is defined in terms of the Masiqhame
tenement holding and includes the Kantienpan and Boksputs Zn-Cu VMS deposits (Figure 6).
With its known VMS deposits, numerous Cu-Zn mineral occurrences and regional geological setting, the area
offers potential for new VMS Cu-Zn and magmatic Ni-sulphide discoveries. It is common for VMS districts to have
small Cu-Zn deposits clustering close to a large deposit where on the Masiqhame Prospecting Right, the larger
deposit is still to be discovered.
Soil sampling and mapping were undertaken during the Quarter. A total of 1,250 soil samples were collected
over magnetic anomalies underlying the Koegrabe Cu-prospect (Figure 8). The total number of soil samples
collected from the Masiqhame project to date amounts to 4,659, with Kantienpan and Boksputs completed in
the previous Quarter. Results from the samples taken will be reported on once received from the lab and
reviewed by the Company.
Figure 8: Aeromagnetic map of the Masiqhame Prospecting Right showing detailed soil sample grids completed.
Marydale Gold-Copper Project (Witkop)
In addition to the Prieska Project, the Company has exploration rights over the Marydale Gold-Copper Project
located 60km north of the Prieska Project.
Work has commenced on evaluation potential for small scale or exploratory gold mining on the Witkop gold
project. The work is being undertaken in collaboration with Orion’s BEE Partner Black Star Pty Ltd and Gariep
Mining (Gariep), their subsidiary, who have extensive small scale mining experience and own an extensive
surface and underground mining fleet of equipment. Orion is evaluating a potential joint venture mining
opportunity with Gariep for the project.
Work during the Quarter was focussed on geological modelling of mineralisation in the area historically drilled by
Anglo American and subsequently followed up with trenching and drilling by Orion (refer ASX release 17 August
2016).
Samples of drill core were also selected and submitted for metallurgical test work.
Australian Projects
Fraser Range – Nickel-Copper Projects (Western Australia)
Orion maintains a sizeable tenement package in the Fraser Range Province of Western Australia which IGO
Limited (ASX: IGO) is currently earning into via a Joint Venture Agreement (refer ASX release 10 March 2017).
Orion has been informed by IGO that drilling of three holes, with one on each of the Pike1, Hook 1 and Hook 2
mafic intrusive nickel-copper sulphide targets on tenement E28/2367 were completed during the Quarter.
Intersections reported mafic intrusive bodies intruded into a volcanic sequence with minor sulphides and
graphitic horizons. Follow-up drilling is planned to continue in Q2 CY2020.
During the Quarter, Legend Mining (ASX:LEG) reported the discovery of a zone of massive sulphide nickel-
copper mineralisation, named Area D, which is located 16km south west of the Pike Prospect (Figure 9). The
Area D intrusive is reported to be hosted by graphitic sediments similar to those reported at Pike & Hook.
Figure 9: Aeromagnetic map showing the location of the Pike and Hook Prospects in the Frazer Range 16km northeast of Legend Mining’s Area D
nickel discovery.
Walhalla Gold and Polymetals Project (Victoria)
No field or exploration work was carried out on the Victoria Project during the Quarter.
During the Quarter, the Company continued to progress its two exploration licence applications over
prospective areas of Walhalla. The exemption granted by Earth Resources Regulation over the area formally
licenced as MIN 5487, remains in place with the Company’s re-applications for a mineral licence over the area
of this previous mining licence well advanced. The Company’s aim is to maintain tenure over this area and to
protect the Company’s gold mineral resources.
Tenement Table
Ownership Change in Quarter Joint Venture Partner
Tenement Project
Interest
South Africa
NC30/5/1/1/2/10445PR PCM 70.00% --- ---
NC30/5/1/2/2/10244PR Marydale 70.00% --- ---
NC30/5/1/1/2/11841PR Vardocube 70.00% --- ---
NC30/5/1/1/2/11850PR Bartotrax 70.00% --- ---
NC30/5/1/1/2/20138MR Prieska 70.00% --- ---
NC30/5/1/1/2/11840MR Donnies Pan 70.00% --- ---
NC30/5/1/1/2/10032MR Namaqua-Disawell 18.50% --- Namaqua Nickel Mining (Pty) Ltd
NC30/5/1/1/2/10938PR Namaqua-Disawell 18.50% --- Disawell (Pty) Ltd
NC30/5/1/1/2/11010PR Namaqua-Disawell 18.50% --- Disawell (Pty) Ltd
NC30/5/1/1/2/12292PR Masiqhame 49.00% --- Masiqhame 855 (Pty) Ltd
Western Australia
E28/2367 Fraser Range 30% --- IGO Limited
E28/2378 Fraser Range 30% --- IGO Limited
E28/2462 Fraser Range 30% --- IGO Limited
E28/2596 Fraser Range 30% --- IGO Limited
E39/1653 Fraser Range 35% --- IGO Limited & Geological Resources Pty Ltd
E39/1654 Fraser Range 10% --- IGO Limited & NBX Pty Ltd
E69/2379 Fraser Range 10% --- IGO Limited & Ponton Minerals Pty Ltd
E69/2380 Fraser Range 10% --- IGO Limited & Ponton Minerals Pty Ltd
E69/2707 Fraser Range 10% --- IGO Limited & Ponton Minerals Pty Ltd
Corporate
Cash and Finance
Cash on hand at the end of the Quarter was $5.2M.
Tembo Convertible Loan Facility
Subsequent to Quarter end, on 24 January 2020, Orion announced that Tembo Capital Mining Fund II LP (Tembo
Capital) has continued its support of Orion through an extension to the term of the $3.6M Loan Facility from 25
January 2020 to 25 June 2020.
In January 2019, Orion announced that a $3.6M unsecured convertible loan facility had been agreed with
Tembo Capital (Loan Facility). Under the terms of the Loan Facility, Tembo Capital may elect for repayment of
the balance of the Loan Facility (including capitalised interest and fees) (Outstanding Amount) to be satisfied by
the issue of fully paid ordinary shares (Shares) by the Company to Tembo Capital at a deemed issue price of
$0.026 per Share (subject to receipt of Shareholder approval if applicable). The Outstanding Amount must be
repaid by 25 June 2020 (previously 25 January 2020), or if Tembo Capital elects to receive Shares in repayment
of the Outstanding Amount in lieu of payment in cash, the date on which the Shares are to be issued to Tembo
Capital (or such later date as may be agreed between Tembo Capital and Orion) (refer ASX release 25 January
2019). At 31 December 2019, the balance of the Loan Facility was $4.20M (including capitalised interest and
fees).
Project Financing
During the Quarter while progressing BFS optimisation studies, Orion has been progressing debt and equity
funding discussions with a number of parties. Orion has also received unsolicited approaches from interested
parties which could potentially enhance project value through the provision of technical and/or financial
support.
In light of the potential of some of these approaches to increase overall project returns and limit Orion’s
requirement to provide equity financing, subsequent to Quarter end, on 23 January 2020 Orion announced that
it has commenced a formal partnering process to engage with these interested parties and which
contemplates the introduction of a strategic project-level equity partner/investor in the Prieska Project.
Orion has engaged Macquarie Capital to act as the Company’s financial adviser in relation to the transaction.
In addition, Orion’s appointed debt advisor, Endeavour Financial, has received formal expressions of interest
from seven banking institutions, several construction groups, and product offtake finance groups.
Orion is targeting to complete the partnering process during Q3 CY2020, following completion of the value
engineering and optimisation process and the delivery of an updated BFS Report, targeted for completion in
early Q2 CY2020. It is also anticipated that the financing process will be finalised following completion of the
value engineering and optimisation studies and updated BFS Report.
Capital Raising
Placement - $7.7M
On 24 October 2019, the Company announced that it received commitments from investors to raise
approximately $5.5M by way of placement of fully paid ordinary shares (Shares) at $0.025 per Share. Following
the announcement, the Company received additional commitments from investors, increasing the amount
raised by the Company to $7.7M, by way of the placement of 308.7M Shares at $0.025 per Share (Placement).
As part of the Placement Tembo Capital confirmed its continued support of Orion, through subscribing for $2.5M
in the Placement.
On 1 November 2019 and 5 November 2019, the Company issued a total of 254.8M Shares in the Company at
$0.025 per Share, to raise $6.4M, following the receipt of funds from investors for Placement commitments.
On 22 November 2019, the Company issued 53.9M Shares in the Company at $0.025 per Share, to raise $1.3M,
finalising the Placement.
Share Purchase Plan
In addition to the Placement announced on 24 October 2019, the Company also announced a share purchase
plan (SPP) providing shareholders an opportunity to increase their shareholding in the Company as it continues
to advance its Prieska Project development opportunity. The SPP offered eligible shareholders the opportunity to
participate in the Company's capital raising on substantially the same terms as the Company's Placement (issue
price will be $0.025 per Share) (refer above).
The SPP opened on 30 October 2019 and closed on 6 December 2019 and attracted strong support from eligible
shareholders, with applications totalling $1.75M received. On 12 December 2019, the Company issued 70.05M
Shares subscribed for under the SPP.
The Company intends to utilise proceeds raised from the Placement and SPP for BFS optimisation studies and
early works at the Prieska Project, with the remainder earmarked for exploration on the Company’s tenements in
the Northern Cape of South Africa and working capital.
BEE re-structure share issue
In April 2019, Orion entered into an Memorandum of Understanding (MoU) with each of the existing Black
Economic Empowerment (BEE) participants (being the Mosiapoa Family Trust (Mosiapoa), Power Matla (Pty) Ltd
(Power Matla) and African Exploration and Mining Finance Corporation (SOC) Ltd (AEMFC) in its South African
subsidiaries (being Repli, Vardocube, Bartotrax and Rich Rewards Trading 437 (Pty) Limited (Rich Rewards). In
terms of those MoU, the existing BEE participants agreed to exchange their shares in Orion’s South African
subsidiaries for approximately 134M JSE-listed Orion Shares.
In September 2019, a major component of the BEE restructure was implemented. In terms of these transactions,
Mosiapoa and Power Matla exchanged their shares in Repli, Rich Rewards and Bartotrax (as applicable) for
48.48M and 37.58M Orion Shares, respectively, at a deemed issue price of $0.0314 per Share.
On 29 November 2019, Orion issued 47.83M Shares in the Company at a deemed issue price of $0.0314 per Share
to AEMFC and Mosiapoa (together, Residual BEE Investors). The Shares were issued to the Residual BEE Investors
as consideration for the repurchase by Vardocube, of shares held by the Residual BEE Investors in that company,
finalising the BEE restructure. The Shares were issued pursuant to shareholder approval obtained at the
Company's annual general meeting held on 28 November 2019.
Annual General Meeting and General Meeting
The Annual General Meeting of shareholders of the Company was held at the offices of Clayton Utz, Level 27,
QV. 1 Building, 250 St Georges Terrace, Perth, Western Australia on 28 November 2019. All resolutions put to
shareholders at the meeting were carried on a show of hands.
A General Meeting of shareholders of the Company was held at the offices of Clayton Utz, Level 27, QV. 1
Building, 250 St Georges Terrace, Perth, Western Australia on 23 December 2019. All resolutions put to
shareholders at the meeting were carried on a show of hands.
Expiry of Unlisted Options
During the Quarter, the following unlisted options expired:
Exercise Price Exercise Price Number of Options
31 October 2019 $0.05 100,466,749
30 November 2019 $0.045 250,000
30 November 2019 $0.06 250,000
29 January 2020
ENQUIRIES
Investors Media JSE Sponsor
Errol Smart – Managing Director & CEO Nicholas Read Rick Irving
Denis Waddell – Chairman Read Corporate, Australia Merchantec Capital
T: +61 (0) 3 8080 7170 T: +61 (0) 419 929 046 T: +27 (0) 11 325 6363
E: info@orionminerals.com.au E: nicholas@readcorporate.com.au E: rick@merchantec.co.za
Date: 29-01-2020 08:56:00
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