Wrap Text
Appendix 5B
Orion Minerals Limited
Incorporated in the Commonwealth of Australia
Australian Company Number 098 939 274
ASX share code: ORN
JSE share code: ORN
ISIN: AU000000ORN1
(“Orion” or “the Company”)
APPENDIX 5B
Mining exploration entity and oil and gas exploration entity quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16
Name of entity
Orion Minerals Ltd
ABN Quarter ended (“current quarter”)
76 098 939 274 June 2018
Consolidated statement of cash flows Current quarter Year to date
$A’000 (12 months)
$A’000
1. Cash flows from operating activities
1.1 Receipts from customers --- ---
1.2 Payments for
(a) exploration & evaluation (4,890) (16,020)
(b) development --- ---
(c) production --- ---
(d) staff costs (379) (1,328)
(e) administration and corporate costs (1,009) (4,847)
1.3 Dividends received (see note 3) --- ---
1.4 Interest received 58 112
1.5 Interest and other costs of finance paid (183) (732)
1.6 Income taxes paid --- ---
1.7 Research and development refunds --- ---
1.8 Other (provide details if material) --- 3
1.9 Net cash from / (used in) operating (6,403) (22,812)
activities
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 --- ---
Consolidated statement of cash flows Current quarter Year to date
$A’000 (12 months)
$A’000
(d) other non-current assets --- ---
Cash flows from loans to other entities --- ---
Dividends received (see note 3) --- ---
Other (provide details if material) --- ---
Net cash from / (used in) investing activities --- ---
Cash flows from financing activities
Proceeds from issues of shares 8,389 17,331
Proceeds from issue of convertible notes --- ---
Proceeds from exercise of share options --- ---
Transaction costs related to issues of shares, (273) (466)
convertible notes or options
Proceeds from borrowings 1,440 8,783
Repayment of borrowings --- (1,440)
Transaction costs related to loans and borrowings --- ---
Dividends paid --- ---
Other (provide details if material) --- ---
Net cash from / (used in) financing activities 9,556 24,208
Net increase / (decrease) in cash and cash
equivalents for the period
Cash and cash equivalents at beginning of period 1,648 3,405
Net cash from / (used in) operating activities (6,403) (22,812)
(item 1.9 above)
Net cash from / (used in) investing activities --- ---
(item 2.6 above)
Net cash from / (used in) financing activities 9,556 24,208
(item 3.10 above)
Effect of movement in exchange rates on cash held --- ---
Cash and cash equivalents at end of period 4,801 4,801
Note: Following quarter end, the Company received $2.0M cash from Evolution Mining Limited as part of the
consideration for the sale of the Connors Arc Project (refer to the Company’s June 2018 Activities Report for
additional information).
5. Reconciliation of cash and cash Current quarter Previous quarter
equivalents $A’000 $A’000
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 4,801 1,648
5.2 Call deposits --- ---
5.3 Bank overdrafts --- ---
5.4 Other (provide details) --- ---
5.5 Cash and cash equivalents at end of 4,801 1,648
quarter (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 1.2 187
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 associates Current quarter
$A'000
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 7,500 7,500
8.2 Credit standby arrangements --- ---
8.3 Other (please specify) 7,600 7,600
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.
Note: Amounts above exclude capitalised interest and fees.
Convertible Note
On 17 March 2017, Orion Minerals Ltd (Company) issued 232,692,294 convertible notes each with
a face value of 2.6 cents, raising $6.05M (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 $0.2M. 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 $6.0M 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. The Company 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 $6.0M, available in two $3.0M tranches;
- Interest - capitalised at 12% per annum accrued daily on the amount drawn down;
- Repayment – repayable on the earlier of 30 September 2018 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 30 September 2018. The Company 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.
For further information refer to the Company’s December 2017 Interim Financial Report and ASX
release 31 May 2018.
As at 30 June 2018, $6.0M had been drawn down against the Bridge Loan facility. Interest and fees
accrued at the end of the quarter was $0.9M.
During the quarter, the Company announced $23M capital raising initiatives. These initiatives included
the continued support of Tembo, through Tembo subscribing for $6.3M in Shares, at an issue price
of 3.7 cents per Share (subject to shareholder approval at a general meeting to be held on 3 August
2018). The Company has agreed with Tembo, that Tembo’s Share subscription will be issued in
consideration for reducing the amount re-payable to Tembo under the Bridge Loan at a deemed issue
price of 3.7 cents per Share. The balance of the Bridge Loan will be reduced by $6.3M (being the
value of Shares subscribed for by Tembo). The balance of the Loan Facility (including accrued
interest) following this repayment will be approximately $0.6M. Refer to the Company’s June 2018
Activities Report for additional information.
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 ZAR15.75M;
- 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:
o ZAR15.75M;
o any unpaid and accumulated dividends; and
o 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 of ZAR15.75M (~$1.6M) to Repli and the
preference shares were issued to AASMF by Repli. As at 30 June 2018, the provision for dividends
and settlement premium totalled $0.6M (ZAR6.3M) (effective rate 13.5%). For further information
refer to the Company’s December 2017 Interim Financial Report.
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
ZAR14.25M to Repli. The key terms of the agreement are as follows:
- Loan amount ZAR14.25M;
- 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 the Company), will be pledged as security to AASMF for the
performance of Repli's obligations in terms of the loan.
On 1 August 2017, Repli drew down on the AASMF Loan in full (ZAR14.25M (~$1.4M). For further
information refer to the Company’s December 2017 Interim Financial Report. Interest accrued at the
end of the quarter was $0.1M.
9. Estimated cash outflows for next quarter $A’000
9.1 Exploration and evaluation (for information in relation to capital 5,800
raising initiatives, refer to the Company’s June 2018 Activities
Report)
9.2 Development ---
9.3 Production ---
9.4 Staff costs ---
9.5 Administration and corporate costs 1,500
9.6 Other (provide details if material) ---
9.7 Total estimated cash outflows 7,300
10. Changes in Tenement reference and Nature of Interest at Interest
tenements location interest beginning at end of
(items 2.1(b) of quarter quarter
and 2.2(b)
above)
10.1 Interests in South Africa Prospecting Rights
mining ---
tenements
QLD Exploration Licence
and petroleum
tenements --
lapsed, WA Exploration Licence
relinquished ---
or reduced
VIC Exploration Licence
---
10.2 Interests in South Africa Prospecting Rights
mining
tenements
QLD Exploration Licence
and 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.
Sign here: ............................................................ Date: 31 July 2018
(Company secretary)
Print name: Martin Bouwmeester
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.
31 July 2018
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 Barnaby Hayward
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
Date: 31/07/2018 01:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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