ORION Minerals confirmed on Tuesday it had raised A$5.8m (R67m) through an issue of shares which was encouragingly supported by its key shareholders.
The capital raised is to advance development of its Prieska Copper Zinc Mine and Okiep Copper Project in South Africa.
Anthony Lennox, newly appointed MD and CEO of Orion Minerals said the funding enables the company to continue finalise its funding package for the projects, and press on with early development work at the Prieska mine’s so-called ‘Uppers’ section, in line with the project’s definitive feasibility study in March.
“In addition, it allows for ongoing activities to progress toward the development of the Okiep Copper Project,” said Lennox.
The raising comprises approximately 522 million shares issued at 1.1 Australian cents per share (13c/share). Firm commitments by key shareholders will secure A$3.3m of the total capital raise, the company said.
Two key shareholders are converting existing loans into equity at the same price as the share issue, said Orion. Chairman Denis Waddell’s Tarney Holdings will subscribe for A$0.5m worth of shares, converting outstanding amounts under a June 2025 unsecured loan agreement, subject to shareholder approval.
Long-term supporter Ratel Growth, controlled by former director Thomas Borman, will convert A$2.1m in loans provided in April 2025 into equity at the placement price.
A Share Purchase Plan will offer eligible shareholders the opportunity to subscribe for up to A$30,000 worth of new shares at the same price, targeting up to A$4m in additional funding, the company said.
In addition to funding Prieska’s Uppers development, the funds from the share issue will pay for dewatering and site works, optimisation studies at Okiep, and general working capital including finalising off-take related funding arrangements.
The share issue, one of many completed by Orion, was well flagged with the firm’s Australian listed securities subject to a trading halt last week.
The critical question for Orion in the long term, however, is how it will raise the big capital – estimated to be nearly R9bn – for its projects.
Commercial debt and an offtake agreement are almost certainly set to be considerations in answering this. The third leg is possible equity finance – probably the most expensive of the three options.
“There will always be an equity component,” said former Orion CEO Errol Smart in May. “You can’t get away from it. The key is to minimise it.”
This worry may be one factor for Orion’s share performance. The stock is 27% lower year-to-date and 35% down over the last 12 months.
