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Quarterly Cash Flow Report
Orion Minerals NL
Incorporated in the Commonwealth of Australia
Australian Company Number 098 939 274
ASX share code: ORN
JSE share code: ORN
ISIN: AU000000ORN1
QUARTERLY CASH FLOW REPORT
Consolidated statement of cash flows Current quarter Year to date
$A’000 (3 months)
$A’000
1. Cash flows from operating activities
1.1 Receipts from customers --- ---
1.2 Payments for
(a) exploration & evaluation (4,058) (4,058)
(b) development --- ---
(c) production --- ---
(d) staff costs (311) (311)
(e) administration and corporate costs (849) (849)
1.3 Dividends received (see note 3) --- ---
1.4 Interest received 50 50
1.5 Interest and other costs of finance paid (183) (183)
1.6 Income taxes paid --- ---
1.7 Research and development refunds --- ---
1.8 Other (provide details if material) 2 2
1.9 Net cash from / (used in) operating activities (5,349) (5,349)
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) property, plant and equipment --- ---
(b) tenements (see item 10) --- ---
(c) investments --- ---
(d) other non-current assets --- ---
2.2 Proceeds from the disposal of:
(a) property, plant and equipment --- ---
(b) tenements (see item 10) --- ---
(c) investments --- ---
(d) other non-current assets --- ---
2.3 Cash flows from loans to other entities --- ---
2.4 Dividends received (see note 3) --- ---
2.5 Other (provide details if material) --- ---
2.6 Net cash from / (used in) investing activities --- ---
Consolidated statement of cash flows Current quarter Year to date
$A’000 (3 months)
$A’000
3. Cash flows from financing activities
3.1 Proceeds from issues of shares 1,752 1,752
3.2 Proceeds from issue of convertible notes --- ---
3.3 Proceeds from exercise of share options --- ---
3.4 Transaction costs related to issues of shares, --- ---
convertible notes or options
3.5 Proceeds from borrowings 4,343 4,343
3.6 Repayment of borrowings --- ---
3.7 Transaction costs related to loans and --- ---
borrowings
3.8 Dividends paid --- ---
3.9 Other (provide details if material) --- ---
3.10 Net cash from / (used in) financing activities 6,095 6,095
4. Net increase / (decrease) in cash
and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of
period 3,405 3,405
4.2 Net cash from / (used in) operating (5,349) (5,349)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing activities --- ---
(item 2.6 above)
4.4 Net cash from / (used in) financing activities 6,095 6,095
(item 3.10 above)
4.5 Effect of movement in exchange rates on --- ---
cash held
4.6 Cash and cash equivalents at end of period 4,151 4,151
5. Reconciliation of cash and cash Current quarter Previous quarter
$A’000 $A’000
equivalents
at the end of the quarter (as shown in the
consolidated statement of cash flows) to the
related items in the accounts
5.1 Bank balances 4,151 4,151
5.2 Call deposits --- ---
5.3 Bank overdrafts --- ---
5.4 Other (provide details) --- ---
5.5 Cash and cash equivalents at end of quarter 4,151 4,151
(should equal item 4.6 above)
6. Payments to directors of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to these parties included in item 1.2 127
6.2 Aggregate amount of cash flow from loans to these parties included ---
in item 2.3
6.3 Include below any explanation necessary to understand the transactions included in
items 6.1 and 6.2
Payments to directors and associates were on normal commercial terms. These payments represent
director fees and payments in terms of consultancy agreements with director-related entities.
7. Payments to related entities of the entity and their Current quarter
$A'000
associates
7.1 Aggregate amount of payments to these parties included in item 1.2 ---
7.2 Aggregate amount of cash flow from loans to these parties included ---
in item 2.3
7.3 Include below any explanation necessary to understand the transactions included in
items 7.1 and 7.2
8. Financing facilities available Total facility amount Amount drawn at
Add notes as necessary for an at quarter end quarter end
understanding of the position $A’000 $A’000
8.1 Loan facilities 7,425 4,425
8.2 Credit standby arrangements --- ---
8.3 Other (please specify) 7,625 7,625
8.4 Include below a description of each facility above, including the lender, interest rate and
whether it is secured or unsecured. If any additional facilities have been entered into or are
proposed to be entered into after quarter end, include details of those facilities as well.
Convertible Note
On 17 March 2017, Orion Minerals NL (Company) issued 232,692,294 convertible notes each with a face value of
2.6 cents, raising $6.05 million (Notes). Key terms of the Notes are as follows:
- Security: secured over certain assets of the Company and its subsidiaries.
- Maturity Date: 17 March 2019.
- Interest: 12% per annum calculated and payable quarterly in arrears.
- Conversion: Noteholders may elect to convert part or all of their Notes at any time prior to the maturity date.
- Conversion Price: 2.6 cents per fully paid ordinary share (Share).
- Early redemption by the Company: Company may elect to redeem all or some of the Notes by notice to the noteholder,
however the noteholder shall have the right, within 14 days of receipt of an early redemption notice from the Company,
to convert the Notes the subject of the early redemption notice into Shares at the Conversion Price.
- Early redemption by the noteholder: noteholders may require the Company to redeem the Notes if an event of default
occurs and the noteholders by special resolution approve the redemption. At any time before the Maturity Date, a
noteholder may elect to redeem and set off some or all of the Notes held by it for the redemption amount as part of an
equity capital raising by the Company permitted by the note deed and in which the noteholder may have a right to
participate in (Equity Raising), such that the redemption amount is set off against the amount payable by the
Noteholder to subscribe for securities under the Equity Raising.
- Redemption amount: the redemption amount is the outstanding facility amount with respect to each Note. If any Notes
are redeemed by the Company within 12 months after their issue, an additional early repayment fee of 5% of the
facility amount of the Notes being redeemed is payable by the Company.
Interest accrued at the end of the quarter was $0.18 million. Further details of the key terms of the Notes are set
out in the Company’s 8 March 2017 ASX release.
Bridge Loan
On 18 August 2017, the Company announced that a $6.0 million bridge loan facility had been agreed with
leading mining-focused private equity group Tembo Capital Mining Fund II LP (Tembo) (Bridge Loan Agreement).
Under the terms of Bridge Loan Agreement, the Company has agreed that it will use best endeavours to
undertake a capital raising by 15 December 2017, to raise additional equity to progress the Prieska Project
bankable feasibility study (BFS) and to continue its South African exploration programs. Orion has also agreed that
Tembo will be offered the opportunity to participate in the sub-underwriting of any rights issue on standard market
terms and conditions. The key terms of the Bridge Loan Agreement are:
- Bridge Loan Amount - Up to $6.0 million, available in two $3.0 million tranches;
- Interest - capitalised at 12% per annum accrued daily on the amount drawn down;
- Repayment – repayable on the earlier of 15 December 2017 and the completion of a capital raising(s) whether by way
of a pro rata issue and/ or security purchase plan of Shares and/or a placement or placements of Shares undertaken
by the Company to raise such amount as is required, in Tembo’s reasonable opinion, to progress the Prieska Project
BFS, continue exploration programs at the Company’s South African projects and for working capital (Equity Capital
Raising);
- Equity Capital Raising - the Company will use its best endeavours to undertake an Equity Capital Raising before 15
December 2017. Orion shall procure that Tembo (or its affiliate) is offered the right to underwrite or sub-underwrite any
pro rata issue and/or security purchase plan which form part of an Equity Capital Raising, on standard market terms
and conditions;
- Set-off under Entitlement Offer – repayment of the Bridge Loan will be set off against the amount to be paid by Tembo
for the issue and allotment of Shares to Tembo under the Equity Capital Raising and/or at Tembo’s election against
the underwriting amount payable by Tembo in respect of any shortfall under any ‘pro rata issue’ which form part of an
Equity Capital Raising in its capacity as underwriter or sub-underwriter. Any surplus amount owing by Tembo after the
set-off will be paid by Tembo in accordance with the terms of the relevant Equity Capital Raising and the underwriting
arrangements (as applicable);
- Establishment fee - capitalised at 5% of the Bridge Loan facility amount; and
- Security - the Bridge Loan is unsecured.
Further details of the key terms of the Bridge Loan Agreement are set out in the Company’s 18 August 2017 ASX
release. As at 30 September 2017, $3.0 million had been drawn down against the Bridge Loan Facility.
Redeemable Preference Shares
A subscription agreement was entered into between Repli Trading No 27 (Pty) Ltd (Repli) (a 73.33% owned subsidiary of
Agama Exploration & Mining (Pty) Ltd (Agama)) and Anglo American Sefa Mining Fund (AASMF) on 2 November 2015.
Under the terms of the agreement, AASMF subscribed for 15,750,000 Repli redeemable preference shares at a subscription
price of ZAR1 per redeemable preference share. The key terms of the agreement are as follows:
- 15,750,000 cumulative redeemable non-participating preference shares;
- Subscription price ZAR15.75 million;
- Dividend rate – prime lending rate in South Africa;
- Dividend payment – dividends accrue annually based on the subscription price. Fifty percent of the dividends which
have accrued and accumulated from the date of issue until 2 years after the Copperton Project mining right (Mining
Right) has been issued shall become due and payable on the scheduled dividend date (approximately 4 years after
the issue date). Balance of the accrued and accumulated dividends to be paid at the relevant redemption date;
- Redemption date is the earlier of 7 years after the issue date or 4 years after the Mining Right has been issued;
- Redemption amount consists of:
- ZAR15.75 million;
- any unpaid and accumulated dividends; and
- Settlement premium based on IRR of 13.5%, taking into account all cash flows from the preference shares in
order to get an overall IRR of 13.5% (IRR is fixed for the duration that the preference shares are outstanding).
- Preference shares are unsecured, but AASMF will hold 26% voting rights in Repli in the event that there is a default on
the part of Repli;
- Funding to principally used for a 12 month exploration program on the NW Oxide Zone and the use the results to
update the scoping study.
On 5 November 2015, AASMF paid the subscription price to Repli and the preference shares were issued to AASMF by
Repli. As at 30 September 2017, the provision for dividends and settlement premium totalled $0.40 million (ZAR4.0 million)
(effective rate 13.5%).
AASMF Loan
On 2 November 2015, Repli and AASMF entered into a loan agreement for the further exploration and development of the
Copperton Project. Under the terms of the loan, AASMF shall advance ZAR14.25 million to Repli. The key terms of the
agreement are as follows:
- Loan amount ZAR14.25 million;
- Interest rate will be the prime lending rate in South Africa;
- The disbursement of the loan will be subject to AASMF notifying Repli that it is satisfied with the results of the updated
scoping study;
- Repayment date will be the earlier of 3 years from the date of the advance or on the date which Repli raises any
additional finance for the further development of the Copperton Project; and
- On the advancement of the loan, 29.17% of the shares held in Repli by the Agama group (a wholly owned subsidiary of
Orion), will be pledged as security to AASMF for the performance of Repli's obligations in terms of the loan.
As at 30 September 2017, the AASMF Loan had been drawn down in full.
9. Estimated cash outflows for next quarter $A’000
9.1 Exploration and evaluation 5,000
9.2 Development ---
9.3 Production ---
9.4 Staff costs 300
9.5 Administration and corporate costs 500
9.6 Other (provide details if material) ---
9.7 Total estimated cash outflows 5,800
10. Changes in Tenement reference and Nature of Interest at Interest
tenements location interest beginnin at end
(items g of of
2.1(b) and quarter quarter
2.2(b)
above)
10.1 Interests in South Africa Prospecting
mining Rights
tenements ---
and QLD Exploration Licence
petroleum
tenements ---
lapsed, WA Exploration Licence
relinquished ---
or reduced VIC Exploration Licence
---
10.2 Interests in South Africa Prospecting
mining Rights
tenements ---
and QLD Exploration Licence
petroleum
tenements ---
acquired or WA Exploration Licence
increased ---
VIC Exploration Licence
---
Compliance statement
1 This statement has been prepared in accordance with accounting standards and
policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Notes
1. The quarterly report provides a basis for informing the market how the entity’s activities
have been financed for the past quarter and the effect on its cash position. An entity
that wishes to disclose additional information is encouraged to do so, in a note or notes
included in or attached to this report.
2. If this quarterly report has been prepared in accordance with Australian Accounting
Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation
of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this
quarterly report has been prepared in accordance with other accounting standards
agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows from operating activities or
cash flows from investing activities, depending on the accounting policy of the entity.
30 October 2017
ENQUIRIES
Investors JSE Sponsor
Errol Smart – Managing Director & CEO Rick Irving
Denis Waddell – Chairman Merchantec Capital
T: +61 (0) 3 8080 7170 T: +27 (0) 11 325 6363
E: info@orionminerals.com.au E: rick@merchantec.co.za
Media
Michael Vaughan Emily Fenton
Fivemark Partners, Australia Tavistock, UK
T: +61 (0) 422 602 720 T: +44 (0) 207 920 3150
E: michael.vaughan@fivemark.com.au E: orion@tavistock.co.uk
Suite 617, 530 Little Collins Street
Melbourne, VIC, 3000
Disclaimer
This release may include forward-looking statements. Such forward-looking statements may include, among
other things, statements regarding targets, estimates and assumptions in respect of metal production and
prices, operating costs and results, capital expenditures, mineral reserves and mineral resources and
anticipated grades and recovery rates, and are or may be based on assumptions and estimates related to
future technical, economic, market, political, social and other conditions. These forward-looking statements
are based on management’s expectations and beliefs concerning future events. Forward-looking statements
inherently involve subjective judgement and analysis and are necessarily subject to risks, uncertainties and
other factors, many of which are outside the control of Orion. Actual results and developments may vary
materially from those expressed in this release. Given these uncertainties, readers are cautioned not to place
undue reliance on such forward-looking statements. Orion makes no undertaking to subsequently update or
revise the forward-looking statements made in this release to reflect events or circumstances after the date
of this release. All information in respect of Exploration Results and other technical information should be
read in conjunction with Competent Person Statements in this release. To the maximum extent permitted by
law, Orion and any of its related bodies corporate and affiliates and their officers, employees, agents,
associates and advisers:
- disclaim any obligations or undertaking to release any updates or revisions to the information to reflect
any change in expectations or assumptions;
- do not make any representation or warranty, express or implied, as to the accuracy, reliability or
completeness of the information in this release, or likelihood of fulfilment of any forward-looking statement
or any event or results expressed or implied in any forward-looking statement; and
- disclaim all responsibility and liability for these forward-looking statements (including, without limitation,
liability for negligence).
Date: 30/10/2017 12:56:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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