
ORION Minerals said today it had raised A$3.6m (R44m) through a share purchase plan where the majority of the backing was from the South African market.
Local investors contributed $A2.8m or R33.6m of the total funds raised described by Orion chairman Dennis Waddell as “a great result” that “reflects Orion’s positive standing in the local community”.
It is infamously difficult for junior mining companies to raise money from South African investors, especially in the retail market. The capital raise success is down to Utshalo which used its user-friendly digital channels to improve access for local investors.
“The proceeds of the SPP (share purchase plan) take the total amount of the recent capital raising to $11.3m – a fantastic outcome particularly considering the current volatile conditions in global markets,” said Waddell in an announcement today.
Earlier this month, Orion placed about A$7.7m in new shares with sophisticated and corporate investors.
Proceeds from the capital raising will go to paying for bankable feasibility studies into Orion’s Prieska Copper Zinc Mine (PCZM) and Okiep Copper Project (OCP), both in South Africa’s mineral-rich Northern Cape province, said Waddell.
On July 19, Orion’s MD and CEO Errol Smart said his firm’s share price would only reflect its true value when the feasibility studies had been completed. “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.”
Shares in Orion have traded up nearly 12% so far this year. On a five year basis, the stock is down about 34%, however. This is despite the rapid rise in the copper price over that period amid expectations of a massive supply deficit in the future.
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, said Smart.
PCZM is targeting an initial 12-year mine producing 22,000 tons of copper metal and 70,000 tons of zinc metal a year, according to a presentation on Orion’s website. A scoping study for OCP indicates pilot phase production of 102,000 tons of copper in saleable concentrates annually, the presentation said.