Home News Orion Minerals plunges 9% on JSE after announcing R92.3m share issue

Orion Minerals plunges 9% on JSE after announcing R92.3m share issue

420

The company said the R92.3 million capital raised would be used to accelerate infrastructure development at Okiep and to fast-track development of the Prieska Copper Zinc Mine, all located in the Northern Cape.

The Prieska Copper Zinc Mine (PCZM) is the centrepiece of Orion’s future-facing metals portfolio. Picture: Supplied

ORION Minerals plunged nearly 10% on the JSE on Monday despite announcing that it had completed a R92.3 million capital raise to advance its South African copper and zinc operations.

Trade in Orion Minerals shares on the JSE had been voluntarily suspended since last week pending announcement of the capital raise.

When it resumed trading on Monday, shares in the company traded 9.09% lower at R0.20, extending its slide to 4.35% in the past week.

Earlier, the company said the R92.3 million capital raise would be used to accelerate infrastructure development at Okiep and to fast-track development of the Prieska Copper Zinc Mine, all located in the Northern Cape.

The company had received firm commitments for a share placement to investors comprising about 513 million shares. The shares will be issued at a price of R0.18.

“Funds to be used principally to progress the development of the Prieska Copper Zinc Mine and permitting and acceleration of infrastructure development for early production in respect of the Okiep Copper Project and ongoing exploration drilling at Okiep,” the company said.

In addition to the share issue, Orion was also offering a share purchase plan to provide eligible shareholders with the opportunity “to subscribe for new shares in parcels starting from R2,000 up to a maximum of R365,000 at an issue price of R0.18 cents to raise R60 million” in capital.

The company said this would provide existing shareholders with the opportunity to participate in this capital raise at the same offer price as the shares issued under the share placement scheme.

“With our two bankable feasibility studies for Prieska copper zinc and Okiep mines now imminent, and ongoing drilling recently delivering very impressive copper intersections at Okiep, this capital raise allows work to continue on preparation for commercial mining and on exploration, while the optimum debt funding arrangements are negotiated with funding institutions,” said Orion managing director and CEO Errol Smart.

In May, the Industrial Development Corporation approved an additional R43.7m financing facility for Orion Minerals’ acquisition of a controlling stake in the Okiep Copper Project in the Northern Cape.

The Okiep project has been described as a “highly strategic asset” for Orion and is “located within a prolific copper-producing district that historically produced over 2 million tons” of contained metal.

The Okiep district is undergoing a major revival against the backdrop of surging copper prices, Orion had previously said.

The company had, however, been frustrated by slow delivery of results from laboratories that are swamped with requests for tests as copper exploration activity re-surges.

“We have been frustrated by the slow turnaround from accredited laboratories, which are overloaded with exploration samples,” Smart said.

“This is indicative of the intensity of activity in the copper exploration industry and is in itself an indicator of the challenges involved in accelerating mine development to counter the global metal supply deficit that is developing.”

BUSINESS REPORT

Previous articleExpected uptick in conditions driving manufacturing confidence to two-year high
Next articleDesperation appears to be at the root of Sekhukhune’s choice of coach