ASX- and JSE-listed Orion Minerals has issued the first drawdown notices in relation to the R370-million of committed funding for the Prieska copper/zinc project, in the Northern Cape, having satisfied the necessary conditions.  

The company has finalised substantial funding arrangements with the Industrial Development Corporation of South Africa (IDC) and Triple Flag, clearing the way for the drawdown to take place. 

Although some conditions are still to be met before receiving the initial drawdown amounts, Orion has fulfilled all the requirements for the R250-million IDC convertible loan and the A$10-million Triple Flag funding arrangement.  

As a result, drawdown notices have been submitted to both the IDC and Triple Flag for an initial drawdown totalling R167-million. 

The drawdown of the R250-million convertible loan will occur in tranches, with Orion's drawdown requests under the A$10-million Triple Flag funding arrangement matching the pro rata amount. 

The IDC convertible loan and Triple Flag funding arrangement were previously announced on February 8 and December 13 last year, respectively. The convertible loan, a R250-million senior secured facility, will fund early mining works and key predevelopment activities at the Prieska project.  

The Triple Flag funding arrangement, comprised of an $87-million secured funding package, includes the acquisition of a precious metals stream and an additional A$10-million early funding arrangement for Prieska. 

Both the IDC convertible loan and Triple Flag funding arrangement are part of Orion's broader funding strategy, which supports the near-term development of the Prieska copper/zinc and Okiep copper projects. 

“This marks another significant milestone as we systematically check the boxes towards the development of our two key base metal hubs in [the] Northern Cape.  

“After an exhaustive due diligence process, we have now satisfied the substantive conditions for the first two legs of our funding strategy – effectively unlocking R370-million worth of project development funding for the Prieska project.  

“This will allow us to accelerate predevelopment mine works, including trial mining in the upper levels of the mine and construction and commissioning of mine dewatering installations,” Orion MD and CEO Errol Smart said. 

He said the IDC and Triple Flag funding complemented the third leg of Orion’s funding strategy, announced last quarter, which comprises the equity placement and associated options package underpinned by Clover Alloys and existing shareholders Tembo Capital and Delphi Group. 

“In combination, this multifaceted funding package puts Orion in a strong position to execute our development strategy and prepare the company to make the transition to developer and, ultimately, an operating mining company,” Smart said. 

“As a funding partner, the IDC recognises this important milestone for the project and what it represents for long-life base metals assets in South Africa and the Northern Cape region,” IDC senior project developer Nico van Aardt added. 

Triple Flag CEO Shaun Usmar congratulated the Orion team for achieving the financing milestones as part of advancing critical activities to deliver the Prieska project.  

“The Prieska project represents near-term, attractive supply of copper that is well-positioned to deliver into the copper demand growth that will result from the green energy transition,” Usmar said. 

NEXT STEPS 

Orion's flagship Prieska project is transitioning to the mine development and construction phase after finalising a comprehensive strategic funding package. In March, Orion announced a two-tranche share placement worth A$13-million, which brought in a new cornerstone investor Clover Alloys. 

Clover Alloys has expertise in mine development and operations, with a record of building efficient metal processing plants at chrome mines in South Africa. Its expertise is expected to support Orion as it advances the development of the Prieska project and Okiep copper project towards production.  

Existing shareholders Delphi and Tembo Capital Mining Fund also participated in the recent placement. 

The placement includes a substantial options package. Assuming all placement options are exercised, the total value of the equity funding package amounts to about A$73-million.  

This equity funding, combined with previously announced funding, such as the $87-million Triple Flag precious metal stream and funding arrangement and the R250-million IDC convertible loan, positions Orion to implement its accelerated development strategy in the Northern Cape.   

With this funding package, Orion can advance the development of the Prieska project, including trial mining, ore processing, mine dewatering and completion of feasibility studies for an early production scenario. 

The early production scenario would enable revenue generation and potentially reduce upfront external funding requirements by phasing the mine build. It allows for scaling up to the full-scale project outlined in the bankable feasibility study (BFS) published in May, as funding becomes available.  

The BFS for the early mining development plan of the Prieska project is nearing completion. 

The mine dewatering project for the Prieska project is also progressing well, with the completion of underground storage dams, pump site construction and installation of the shaft platform to facilitate pump installation.  

The delivery of the first large-scale pumps and piping is imminent.