ORION Mineral shares would start to perform once the company had completed the bankable feasibility studies for its Prieska and Okiep mines, and it had shown it was fully financed to deliver them.
That’s according to Orion CEO Errol Smart answering a string of questions over the company’s poor share price performance during an investment webinar on Thursday morning updating Orion’s position.
Since February 2021 the Orion share price has dropped from around 80 South African cents a share to as low as 15c before recovering to current levels around 19c after pitching its latest capital raising at 18c a share.
“The value comes from being fully-financed,” said Smart.
“Last year this time, when the market believed we were fully financed because Clover Alloys were telling us they were going to underwrite the financing of all of our mines, our share price was trading at twice what it is trading today.”
Clover Alloys subsequently declined to follow its option to take up further shares in Orion, but it remains an 8% shareholder. According to Smart, Clover is “supportive about our assets”.
He added: “Clover loves our assets and would like to invest directly into the asset level but, at the moment, we are not taking investments at asset level. “We want all of our shareholders to hold at the same listed equity level.
“So if I want to double this company’s share price I need to show funding in place to get certainty in the market.
“That’s my interpretation of what we are looking at now. The day we say we are fully financed and are building the mines and will be in production in 12 months, that’s when you will see the share price off to the races.”
If funded ‘today’ Orion could be in production at Prieska and Okiep in a year because all that was needed was construction of concentrator plants for each mine.
Asked about the status of fund-raising talks Smart replied: “We have assimilated a fantastic portfolio of assets and there are very few copper development and exploration companies in the world that can table what we are tabling as an opportunity.
“We have had a lot of the major companies coming to us asking – ‘how can we work together’. There are all sorts of discussions with all sorts of financiers happening,” he said.
Discussions were underway with customers which are prepared to finance the plant which would give them certainty of delivery. But Smart said he was unwilling to sign a life of mine offtake agreement. “That would be a very unhealthy situation,” he said.
Smart was asked about a consolidation of Orion’s issued share capital. “There is a very high number of shares in issue and I wish it could be smaller,” Smart replied. “Very clearly there will be a consolidation in future but it is not something for now. We cannot be distracted.”
