Orion Minerals has secured a finance facility from Tembo Capital Mining Fund II LP to help advance a bankable feasibility study (BFS) for the Prieska Zinc-Copper Project in South Africa. The company told delegates at the African Mining Indaba 2019 in Cape Town that the unsecured bridge loan facility was for A$3.6 million.
Proceeds will be used primarily to progress the BFS, which is on track for completion in the June quarter of 2019 as well as to repay the current bridge loan of $600,000.
Under the terms of the loan facility, Tembo may at its election, have the balance of the loan facility, including capitalised interest and fees, repaid by the issue of ordinary shares in Orion to Tembo at a deemed issue price of 2.6 cents per share. This condition is subject to shareholder approval.
Orion’s convertible noteholders have also approved the extension of the maturity date of their convertible notes, worth about $6.05 million, from March 17, 2019, to September 30, 2019.
Orion chairman Denis Waddell said: “We are very pleased with Tembo’s ongoing support as well as the support of the holders of the convertible notes, as it enables the continued rapid advance of the Prieska Zinc-Copper Project through to the completion of bankable feasibility studies.
“Our focus is on bringing Prieska into production as quickly as possible, based on the parameters outlined in the positive Scoping Study released in December 2018.
“The BFS is well advanced and on track to be completed in Q2 2019.”
Prieska project is 270 kilometres southwest of Kimberley in the Northern Cape province.
Earlier this year, Orion revealed an upgraded resource for Prieska of 30.49 million tonnes grading 3.7% zinc and 1.2% copper.
The resource was upgraded following the completion of an updated open pit resource for the +105m Level Target of 1.76 million tonnes at 2.0% zinc and 1.5% copper.
This new total resource follows the upgrade to the Deep Sulphide resource revealed just before Christmas.
Orion managing director and chief executive officer Errol Smart recently said: “The completion of the first ‘global’ mineral resource for Prieska, encompassing all 2018 drilling data, is a great way to start 2019.
“The total mineral resource for the project now stands at over 30 million tonnes, cementing its position as one of the more significant new VMS development projects globally and highlighting its potential to underpin a substantial, long-life mining operation.”
The company recently appointed Endeavour Financial, a leading financial advisor in the mining sector, to assist in the evaluation of funding options for the project.
Endeavour has extensive experience in assisting companies to structure project funding solutions across diverse commodities, geographies and sources of financing and has a proven track record in successfully financing projects in sub-Saharan Africa.
The funding options analysis to be undertaken by Endeavour will assist Orion develop an optimised funding strategy for the Prieska project.