Following the completion of this transaction, Orion Gold, through its subsidiary companies, now holds an effective 73.33% interest in the company holding prospecting rights over the historical Prieska copper mine (PC), in the Northern Cape, South Africa, and the Marydale gold-copper project, a volcanogenic gold-copper discovery located 60 km from PC.
The purchase consideration paid on settlement of the acquisition was A$5.5 million, of which $3.3 million was paid in cash and $2.2 million was paid by issue of Orion Gold shares.
In addition, Orion Gold provided finance for Agama to enable it to settle all historical shareholder loans to an aggregate amount of approximately $3.4 million.
With the acquisition now completed, Orion Gold has embarked on an intensive growth and development strategy aimed at establishing the company as a significant new player in the global base metal sector.
Orion Gold is well financed at project level to advance the PC project, with a $3.0 million facility available from a South African Investment Fund. Importantly, the PC project also has a cash-backed environmental fund of $1.82 million which has not been needed since the mine closed in 1991.
In recent months, the company has announced highly encouraging exploration results from the +105 open-pit at the Prieska zinc-copper project. Modelling of the mineralisation intersected in this drilling is now underway with the objective of producing JORC 2012 compliant mineral resources in the June 2017 quarter and feeding these resource estimates into a pre-feasibility study.
In addition, the company recently announced that the Department of Mineral Resources has granted permission to access the underground workings at the PC project.
The regulatory permission to access the underground workings through the decline roadway allows Orion Gold to confirm that the access is safe and then to conduct a detailed assessment of the state of the underground workings and the concrete-lined shaft at the PC project. This work is aimed at completing engineering and cost studies for inclusion into feasibility studies.
Underground access will also allow the company to undertake an infill drill programme from underground, to aid in the estimation of mineral resources of the open pit area, planned for completion in June 2017 quarter.
In addition, the company is planning a major drill programme from surface to test the depth extensions to the mineralisation that was mined historically. The PC project produced 0.43 Mt of copper and 1 Mt of zinc from 46.8 Mt of sulphide ore milled. Extensive historic drilling below old workings confirmed continuation of the massive sulphide mineralisation at similar widths and grades to that previously mined.