Orion raises R92m for copper studies amid spike in SA optimism

Errol Smart, CEO, Orion Minerals

ASX- and JSE-listed junior copper miner Orion Minerals (Orion) is raising a further A$7.7m (about R92.3m) through the issue of 513 million shares at 1.5 Australian cents (ZAR 18c) a share in a placement to “sophisticated and professional investors”.

The issue is at a discount of 18% to the level of 22c a share at which Orion was trading on the JSE last week immediately prior to the voluntary suspension of the company’s shares ahead of this announcement.

According to Orion CEO Errol Smart the money raised is to be used “principally to progress the development of the Prieska copper/zinc mine and permitting and acceleration of the infrastructure development for early production in respect of the Okiep copper project and ongoing exploration drilling at Okiep”.

Orion also announced it would introduce a share purchase plan “to provide eligible shareholders with the opportunity to subscribe for new shares in parcels starting from R2000 up to a maximum of R365,000 at an issue price of 18c a share.”

The aim is to raise another R60m “and provide existing shareholders with the opportunity to participate in this capital raise at the same offer price as the shares issued under the placement”.

“With our two bankable feasibility studies for Prieska and Okiep now imminent, and ongoing drilling recently delivering very impressive copper intersections at Okiep, this capital raise allows work to continue on preparation for commercial mining and exploration while the optimum debt funding arrangements are negotiated with funding institutions.”

Smart commented last week at the London Indaba investment conference that he had been “inundated” with calls from potential investors following the outcome of the recent South African general elections indicating increased interest over investing in the country.

Following completion of the bankable feasibility studies Orion is likely to be launching larger capital raises in addition to the “funding arrangements” being negotiated as it sets about building concentrator plants at both Okiep and Prieska to get these mines into commercial production.