Orion suspends trade ahead of fund raising


Orion suspends trade ahead of fund raising

Published Date: 2019-04-16 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Orion suspends trade ahead of fund raising

The minerals explorer plans to issue more shares and introduce a larger empowerment shareholding as it moves ahead with its Prieska Project.

Orion Minerals asked for trading in its shares to be suspended yesterday pending an announcement on a capital raise and a restructuring of its empowerment partnerships.

The Australian minerals explorer also confirmed media speculation that it was looking to raise about $8 million at $0.04 per share. Every two shares bought will come with a free option with an exercise price of $0.05 and a term of approximately six months. The shares will be placed with sophisticated and professional investors, it said.

The group said the equity raise was likely to be underpinned by a group of high-profile black investors as part of a broader restructuring of its black ownership at a group operating level so it could achieve compliance with the latest empowerment charter for the mining industry. In addition to strengthening its balance sheet, it said the transactions would ensure appropriate alignment and restructuring of its empowerment interests across both project and listed company levels and significantly elevate its profile amongst SA institutional investors as it prepares to develop the Prieska Project.

In January, the group raised the estimated Deep Sulphide Mineral Resource at Prieska following an extensive drilling programme last year. It revised the resource up to 30.49 million tonnes from 29.4 million tonnes last April. It said no additional drilling work was planned before the completion of the study.

Prieska is recorded as one of the world's top 30 volcanogenic massive sulphide (VMS) ore deposits. The mine was formerly owned by Anglovaal and operated from 1971 to 1991 when it was closed. It had historic production of over 430 000 tonnes of copper and a million tonnes of zinc. Orion is investigating the establishment of new mining operations to get any remaining zinc and copper out of the ground. The area around the mine still has infrastructure in place, including power, water, road and rail access, and accommodation.

Orion applied for its prospecting right to be converted to a mining right last April and expects the permit to be granted before the end of June, with project construction planned to start in the last quarter of the year.

It expected to end the voluntary suspension this morning along with further details of its proposed capital raising. Its shares traded at 34c ahead of the suspension.

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