ORION Minerals said on Thursday it had increased funds from a capital raise announced earlier this week to A$7.7m (R89m) from A$5.5m.
The copper and zinc development firm said additional shares were taken up “sophisticated and professional investors”, some of them new to the company.
Appetite for the startup is a promising sign after years of toil. An agreement with Glencore worth $250m has been a catalysing effect.
Orion announced on Tuesday it was issuing shares for cash in order the continue early works on the ‘Uppers’ section of Prieska Copper Zinc Mine (PCZM), as well as dewatering of the deeper part of the orebody. Funds would also be put to continuing studies on another mine, Okiep Copper. Both projects are in the Northern Cape province.
A total of 515 million shares were issued at an issue price of 1.5 Australian cents per share, equivalent of 17 South African cents – a slight discount to the 18 SA cents at which the stock was trading on Tuesday. Orion is currently trading at 20 SA cents apiece.
Included in the initial A$5m placement is A$1m taken up by Tarney Holdings, an entity associated with Orion’s chairman Denis Waddell.
Tony Lennox, CEO of Orion said last month the funding deal with Glencore was “a watershed moment” for the company which has been developing PCZM for the best part of a decade. In terms of the deal, Orion would supply copper and zinc concentrates from PCZM to Glencore in return for a funding of between $200m and $250m.
First concentrate production from PCZM is expected by the end of 2026.
Copper is currently trading at $10,379 per ton (cash) up from $8,500/t in April and $9,800/t year-on-year, largely driven by the force majeure declared at Freeport-McMoRan’s Grasberg mine in Indonesia following a major accident last week.
According to BMO Capital Markets, copper is expected to stay at current levels in the long-term. “Copper has not historically been a cash machine given elastic demand and a decent capex response; however, we raise our long term copper price to $10,500/t given the rising burden of capex in cash outflows,” the bank said in a recent note.
It added that the cyclical upturn in metals had “plenty of room to run … with rate cuts and US dollar erosion aligning with supportive micro drivers”.
