South Africa orion minerals

Orion Minerals has announced that Tembo Capital Mining Fund II LP has continued its strong support of Orion by providing a new unsecured $1.0 million loan facility.

Under the terms of the Loan Facility, the Loan Amount, interest and any amount capitalised under the Loan Facility will be automatically set off against the amount to be paid by Tembo for the issue and allotment of ordinary shares in Orion Minerals to Tembo under any capital raising undertaken by Orion on or before 31 October 2020.

If Orion Minerals does not undertake a capital raising by 31 October 2020, Tembo may elect to receive Shares in repayment of the Outstanding Amount, at an issue price of the 10-trading day ASX VWAP of the Shares, prior to the date that Tembo issues a conversion notice to Orion.

Orion’s key focus is the completion of BFS optimisation studies for the development of the Prieska Copper-Zinc Project and preparations for mine construction.

Value engineering and optimisation studies being undertaken since the completion of the BFS in June 2019 are delivering positive results, with key studies now concluded and an updated BFS due for completion shortly.

Proceeds from the Loan Facility will be used principally to support Orion’s ongoing working capital requirements considering the current COVID-19 circumstances.

Read more about Orion Minerals

The key terms of the Loan Facility agreement are:

  • Loan Amount – $1.0 million;
  • Interest – capitalised at 12% per annum;
  • Set-off under capital raising – the Outstanding Amount will be automatically set off against the amount to be paid by Tembo for the issue and allotment of Shares to Tembo under any capital raising undertaken by Orion on or before 31 October 2020;
  • Conversion – if Orion Minerals does not undertake a capital raising by 31 October 2020, Tembo may elect to receive Shares in repayment of the Outstanding Amount at an issue price of the volume weighted average price (VWAP) of Shares on the ASX over the ten trading days prior to the date that Tembo issues a conversion notice to Orion;
  • Repayment – if Orion Minerals does not undertake a capital raising by the Repayment Date and Tembo does not elect to receive Shares in repayment of the Outstanding Amount by the Repayment Date, or if all regulatory and shareholder approvals required to permit Tembo to participate in any capital raising or to be issued Shares in repayment of the Outstanding Amount have not been obtained by the later of the Repayment Date and specified dates to obtain the required shareholder and regulatory approvals, the Outstanding Amount is to be repaid within 10 business days;
  • Security – the Loan Facility is unsecured;
  • Undertakings – Orion Minerals has provided undertakings which are customary for an agreement of this type, including in relation to the incurring of debt, granting of security, compliance with laws, and operational matters; and
  • Warranties – customary warranties for a transaction of this nature are given by each of Orion and Tembo.

Read more about Tembo Capital