With South Africa’s mineral endowment and its public capital markets being two of its greatest advantages, both need to be put to work in a manner that is common in other global mining jurisdictions, Utshalo founder Paul Miller emphasised at the collaborative opening, earlier this month, of the way for smaller investors to increase their shareholdings in the Northern Cape’s attractive copper endowment.

In this case, the collaborative initiative brings Australia Stock Exchange- (ASX-) style shareholder participation to smaller South African shareholders through the Johannesburg Stock Exchange (JSE), with implementation brought about by Utshalo working in tandem with the Johannesburg- and Sydney-listed Orion Minerals, headed by CEO Errol Smart.

“We’ve not had the kinds of incentives that encourage both exploration and investment via the public market, like flow-through shares, for example, in other markets. But hopefully here, by the industry itself working together, this will happen.

‘We need to get money into the ground, get projects built. You develop the public markets to support those projects, and then get people to work,” Miller outlined.

“I think this will be well supported, particularly because it’s in the money. We’re trading at 20 cents, and you can buy at 18 cents direct from the company, without paying any brokerage fees,” Smart highlighted in the online webinar covered by Engineering News & Mining Weekly.

JSE- and the ASX-listed Orion has 23 000 South African shareholders and is undertaking a capital raising to progress its Prieska Copper Zinc Mine and Okiep Copper Project in South Africa’s Northern Cape province.

Eligible South African shareholders, that is, those who held Orion shares as at 11:00 on June 28, may now participate in Orion’s latest share purchase plan (SPP) in the same way as Australian shareholders participate in SPPs.

“There’s no equivalent to an SPP in South African public markets and if South Africa’s public markets are to regain their vibrancy, we need to adopt more practices from those markets that are like the ASX. Orion, as an ASX primary listed company, subject to ASX listing rules, is showing the way,” Miller, who has experience as an approved JSE sponsor executive, stated in a release to Engineering News & Mining Weekly.

“I’m really proud of the fact that Orion is now almost majority South African owned. If I look at the share register, where we can see the actual individual shareholders by name and address, it certainly appears to be the case that the majority of Orion shares are held by historically disadvantaged South African (HDSA) shareholders.

“Probably more than 25% of Orion is owned by HDSA people on the listed stock exchange, not because we were forced to do it, but because it’s good business practice, so it has worked for us.

“What’s important is that I have a company that’s worth R1.3-bilion, R1.4-billion that’s 50% South African retail owned.

“So, we’ve got R700-million worth of shares in the hands of retail South African shareholders that are willing to trade and actively get involved in exploration and mine development.

“Surely that tells us that there is an appetite. We’ve got to create the structures that bring that source of capital together with the miners and explorers that need that capital so that we can go forward.

“This is a bit of an experiment. I hope it opens that door. I think it will, and previously, we were very pleased. In 2020, we were bowled over by the support that we got from the JSE. I think we ended up getting the equivalent of A$1.3-million at the time, without even marketing,” Boksburg-born Smart remarked from Springbok, in the Northern Cape.

Orion has just finished a trial mining programme at the reviving Prieska mine and has a bankable feasibility study team at Okiep.

In addition to a placement of 513-million shares at A$0.015c a share to sophisticated and professional investors, eligible South African shareholders will be allowed to subscribe to the SPP at the equivalent R0.18c a share because Orion would like to ensure that South Africans have the opportunity to participate in the SPP alongside their ASX peers.

As a division of Ince, Utshalo is a juristic representative of Insurance Supermarket Insurance Brokers, an authorised financial services provider, and eligible shareholders are able to participate on Utshalo’s online platform.

Although headquartered in Australia, Orion’s primary focus is on advancing its portfolio in South Africa, which has a pressing need to reawaken its public markets amid new mining capital raisings having become too few and far between and critical metal demand being stimulated by the need to combat climate change.

Far more direct retail participation is needed than is currently the case and Utshalo has recognised the pressing need to recreate a direct relationship between non-institutional investors and companies seeking growth capital.