Orion Minerals Ltd (ASX:ORN, JSE:ORN) has signed a definitive agreement for a ZAR 250 million (~A$21 million) a senior secured convertible loan facility with the Industrial Development Corporation of South Africa Limited (IDC) to fund early mining work and pre-development at the Prieska Copper-Zinc Mine.
“The Prieska Copper-Zinc Mine represents an important, long-life base metals asset in South Africa that promises to deliver high socio-economic returns in the Northern Cape,” IDC senior project developer Nico van Aardt said.
“We are delighted to be on board as a development funding partner, unlocking this high-impact project.”
The loan and capitalised interest can be converted into shares in Orion’s holding company PCZM based on pre-money valuation of ZAR 1.2 billion for PCZM.
Follows Triple Flag agreement
Orion also recently signed a definitive agreement with Triple Flag for a US$87 million funding package, with terms including:
- US$80 million (A$116 million) of Precious Metal Stream funding to be advanced against the delivery of 84% of future gold and silver by-product production, with each stream rate reducing to 50% after certain milestones.
- Orion will also receive payments of 10% of the delivered precious metal value at spot gold and silver prices at the time of delivery.
- An additional A$10 million (~US$7 million) to be advanced against calculated payments equal to 0.8% of gross revenue from future mineral sales.
“This is a hugely exciting time for Orion, with the company now entering the final stages of our early development studies and preparing for the imminent transition to development,” Orion Minerals managing director and CEO Errol Smart said.
“The combined pre-development funding being provided by Triple Flag and the IDC for Prieska now totals over ZAR 371 million (~A$31 million).
“This will provide funding for Orion to carry out demonstration trial mining and allow dewatering to commence from underground mine workings.
“Both of these work streams are critical to our Early Works BFS, which we expect to complete by mid-2023, and mark the official start of development at PCZM.
“I would like to take this opportunity to sincerely thank our development partners and our dedicated team for their hard work and tenacity.”
This loan, combined with the A$10 million funding arrangement with Triple Flag, will support the completion of a feasibility study for early mining at the project, as well as early mining works and mine dewatering.
Orion expects to action its first drawdown of funds soon, in the first quarter of this calendar year.