Orion Minerals Ltd (ASX:ORN, JSE:ORN) has repaid a legacy loan facility to finalise key conditions imposed on a multi-pronged funding strategy for its flagship Prieska Copper Zinc Project in South Africa’s Northern Cape Province.
The explorer has paid $1.9 million (ZAR23.9 million) in cash for a ZAR14.25 million loan facility undertaken by subsidiary Prieska Copper Zinc Mine Proprietary Ltd (PCZM) from the Anglo American (LON:AAL) sefa Mining Fund (AASMF) in 2015.
Importantly, the loan repayment has secured the release of a 29.17% stake in PCZM pledged by Agama Exploration and Mining Proprietary Ltd as security for the loan.
Finally free
The repayment of the legacy loan finalises the key conditions for the drawdown of a ZAR250 million ($21 million) Industrial Development Corporation of South Africa Ltd (IDC) convertible loan facility and a $10 million Triple Flag Precious Metals (TSX:TFPM) Corp funding arrangement.
Both the IDC and Triple Flag loans form part of a broader funding strategy for the near-term development of the Prieska Copper Zinc Project and Okiep Copper Project in the Northern Cape Province.
They are expected to be available for drawdown in tranches in the current quarter, subject to fulfilment of standard draw-down conditions.
Works in progress
The funds will enable Orion to complete the bankable feasibility study (BFS) for early mining works and commence mine dewatering at the Prieska Project.
The early mining works are well advanced, with targeted completion in late 2023.
Meanwhile, the dewatering project is also well advanced, with underground storage dams and pump site construction completed, and the shaft platform installed to facilitate pump installation.
Delivery of the first large scale pumps and piping are imminent.
Critical milestone
Orion managing director and chief executive officer Errol Smart said: “The repayment of this legacy loan facility with AASMF is a very important milestone for Orion and our development strategy.
“While quite technical in nature, the release of the security associated with this 2015 funding arrangement is a critical milestone that will allow us to draw down the new funding sources we have put in place with the IDC and Triple Flag.
“The third leg of our new funding strategy is the recent placement and associated options package underpinned by (new cornerstone investor) Clover Alloys and existing shareholders Tembo Capital and Delphi Group.
“This clears the decks for us to move forward with our broader funding and development strategy for PCZM, as recently announced.”
Orion announced in March that it is raising $13 million in a two-tranche share placement to sophisticated and professional investors to accelerate the development of the Northern Cape Province base metal production hubs.