JOHANNESBURG - Australian miner Orion Minerals on Tuesday announced an AUS$8 million capital raising underpinned by a group of high-profile South African investors, including Black Star Minerals and Kolobe Nala Investment.
Orion said it has received commitments from investors for a AUS$8 million capital raising at an issue price of AUS$0.04 per fully paid ordinary share, together with one free attaching option for every two shares issued.
The placement includes approximately AUS$4 million placed to experienced BEE entrepreneurs, of which AUS$2 million is being placed to incoming BEE equity investors who will also invest at the Prieska Project level, Orion's zinc-copper project in Northern Cape.
BEE mining group entrepreneurs, Black Star Minerals and Kolobe Nala Investment, subscribed for AUS$2 million out of AUS$4 million in the placement, after entering into a memorandum of understanding with Orion to establish BEE holding company.
The proposed BEE restructuring transactions entail existing BEE shareholders in Orion's subsidiary, Repli Trading No 27, which owns the Prieska Project with a mining right pending, exchanging their 26.7 percent holding in Repli for JSE listed Orion shares.
The new BEE company will then acquire a 20 percent shareholding in Repli, facilitated by way of Orion vendor funding.
Orion said the capital raising from South African investors was part of a proposed restructure of the company's Black Economic Empowerment (BEE) equity participation at project level, achieving accelerated compliance with the ownership aspects of South African Mining Charter 3.
As part of the placement, Orion's biggest shareholder Tembo Capital Mining Fund II LP and its affiliated entities Tembo Capital, has confirmed its continued support of Orion through subscribing for AUS$2 million in the placement.
Orion said proceeds from the placement would be used principally to finalise the Bankable Feasibility Study on the Prieska Project, and to continue exploration programs on the company's prospective tenements located in the Northern Cape, and for working capital.
Orion's chairman, Denis Waddell, said the proposed BEE restructuring showed that the South African Mining Charter 3 ownership objectives can be achieved, while enhancing value for all shareholders.
"As a result of this restructuring, all Orion BEE partners will be aligned as shareholders at the ASX-JSE listed level, sharing the equity risk and reward on equal terms with all Orion shareholders.
"Our key shareholders have recognised the potential value uplift brought by our new BEE partners and have participated in the placement at a significant premium to market, matching the terms on which our incoming BEE partners are investing."
Meanwhile, Orion strengthened its board by the appointment of highly-respected South African mining executives Godfrey Gomwe, who is a former senior Anglo American executive, and former senior BHP Billiton executive, Tom Borman.
- African News Agency (ANA)