Orion
Orion Minerals' zinc copper project

ASX and JSE-listed Orion Minerals has confirmed its intention to undertake an A$8 million capital raising priced at $0.04 per fully paid ordinary share – which is a 30% premium to its last ASX traded price.

Orion last week suspended share trading on the JSE and ASX pending release of an announcement in relation to a capital raising and finalisation of agreements related to restructuring of the company’s broad-based black economic empowerment (B-BBEE) partnerships.

In relation to this transaction, the company noted that its South African investors will subscribe for about half the shares on offer in the placement as part of the company’s BEE obligations with Orion’s biggest shareholder, London-based Tembo Capital, taking another significant chunk of shares.

The $8 million capital raising will be undertaken at an issue price of $0.04 per share, together with one free attaching option for every two shares issued (exercise price of $0.05 and a term of approximately six months), to be conducted via a placement to sophisticated and professional investors.

The capital raising is likely to be underpinned by a group of high-profile black South African investors as part of a broader restructuring of the company’s black-empowerment equity at operating level, achieving compliance with the South African Mining Charter 3.

The interrelated transactions will represent a pivotal milestone for Orion ahead of the expected imminent grant of the mining right for its flagship Prieska zinc-copper project, in South Africa’s Northern Cape province and the delivery of the bankable feasibility study later this quarter.

In addition to strengthening its balance sheet as it moves towards project financing, the transactions will result in the introduction of a high-profile South African investor group to its share register, ensure an appropriate alignment and restructuring of its BEE interests across both project and listed company levels, and significantly elevate its profile amongst South African institutional investors as it prepares to develop the Prieska project.