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Pre-listing Announcement in Respect of the Secondary Inward Listing of Orion Minerals on the Main Board of the JSE
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
(“Orion Minerals” or “the Company”)
PRE-LISTING ANNOUNCEMENT IN RESPECT OF THE SECONDARY INWARD LISTING OF ORION
MINERALS NL ON THE MAIN BOARD OF THE JSE LIMITED
1. INTRODUCTION
Orion Minerals NL is an Australian minerals exploration company focussing on zinc, copper, nickel, gold
and platinum-group elements in South Africa and Australia. The Company’s projects include the
exploration and evaluation of the Areachap Project in South Africa (including the Prieska Zinc-Copper
Project), the Fraser Range Project in Western Australia, the Connors Arc Epithermal Gold Project in central
Queensland and the Walhalla Gold and Polymetals Project in Victoria.
Orion Minerals has its primary listing on the Australian Securities Exchange Limited (“ASX”) and at the
date of this announcement, the Company’s market capitalisation is approximately AUD 18.8 million
(ZAR 195.6 million).
The ASX is an “accredited exchange” as defined in paragraph 18.42 of the Listings Requirements of the
JSE Limited (“JSE Listings Requirements”) and the Company is not listed on any other exchange.
The JSE has granted approval to Orion Minerals for a secondary listing, by way of introduction under the
fast-track listing process contemplated in Section 18 of the JSE Listings Requirements, of all of its
990 420 440 issued and fully paid ordinary shares (“Ordinary Shares”) on the Main Board of the JSE in
the “Gold Mining” sector, under the abbreviated name “ORIONMIN”, JSE share code “ORN” and
ISIN “AU000000ORN1”, with effect from the commencement of trade on Monday, 18 September 2017
(“Listing Date”) (“Secondary Listing”).
The Financial Surveillance Department of the South African Reserve Bank (“SARB”) has approved the
Secondary Listing and classified the secondary inward listed Ordinary Shares as “domestic” for exchange
control purposes. Accordingly, South African resident shareholders must hold their Ordinary Shares on
the JSE register subsequent to the Secondary Listing and may trade the Ordinary Shares on the JSE
without having recourse to their foreign portfolio allowance.
2. OVERVIEW OF THE COMPANY
Orion Minerals is a no liability company that is incorporated and domiciled in Australia. The Company was
incorporated on 3 December 2001 and operates under the Corporations Act, Act No. 50 of 2001, as
amended. The Company was listed on the ASX on 31 October 2003 under the Materials category, in
accordance with the Global Industry Classification Standards. The financial year-end of the Company is
30 June.
The Company’s registered office is located at Suite 617, 530 Little Collins Street, Melbourne, Victoria,
3000. Orion Minerals is not registered as an external company in South Africa. The Company’s share
registry in Australia is Link Market Services Limited with its registered address and primary place of
business located at Level 12, 680 George Street, Sydney, New South Wales, 2000. The Company has
appointed Link Market Services South Africa Proprietary Limited as its transfer secretaries in South Africa.
The address of the South African transfer office is 13th Floor, Rennie House, 19 Ameshoff Street,
Braamfontein, Johannesburg, 2001.
Orion Minerals is currently conducting exploration and mineral development activities within the following
project locations:
South Africa
On 29 March 2017, Orion Minerals acquired Agama Exploration and Mining Proprietary Limited (“Agama”),
a South African registered company, which, through its subsidiary companies, holds an effective 73.33%
interest in a portfolio of projects including an advanced volcanic massive sulphide zinc-copper exploration
project with near-term production potential at the Prieska Zinc-Copper Project, located near Copperton in
the Northern Cape province of South Africa (“Prieska Project”), and the Marydale Prospecting Right, a
virgin gold discovery of possible epithermal origin, located 60km from the Prieska Project.
In addition to the Prieska Project and Marydale Gold Project, the Company has entered into options and
earn-in rights agreements over a large area in the highly prospective Areachap belt, Northern Cape
Province of South Africa. This has secured an outstanding growth and diversification opportunity for the
Company. Agreements entered into include:
- An earn-in right to ultimately earn a 73% interest in a prospecting right area located approximately
80km north of the Prieska Project. The project area contains several volcanogenic massive sulphide
(“VMS”) and volcanogenic hosted massive sulphide (“VHMS”) zinc and copper targets including the
advanced stage Kantienpan zinc–copper project.
- An earn-in right to ultimately earn an 80% interest, via a South African registered special purpose
vehicle, which will be 74% owned by Orion Minerals, to prospecting and mining right applications which
include an advanced stage ultramafic hosted nickel-copper project, analogous to the geology of the
Fraser Range, Western Australia. Several VMS and VHMS copper-zinc targets are also located within
this mineral rights package.
Queensland
Orion Minerals holds 100% of a large tenement package on the Connors Arc in Queensland, where a
significant intermediate sulphidation, epithermal gold and silver system has been identified at Aurora Flats.
The project lies between the Cracow and Mt Carlton epithermal deposits. The Company’s fieldwork has
led to the discovery of substantial epithermal systems at the Veinglorious and Chough Prospects.
Western Australia
Orion Minerals has a direct interest in the Fraser Range Project under a joint venture (“JV”) agreement
with Independence Group NL (ASX: IGO) (“IGO”). Under the terms of the JV, IGO acquired 70% equity in
Orion Mineral’s 100%-owned tenements (Orion Minerals retains 30%) and IGO acquired 60 - 65% equity
in various joint venture tenements (i.e. joint ventures between Orion Minerals and other parties in existence
at the time of Orion Minerals entering into the JV) (Orion Minerals retains 10% - 15%).
The JV over its Fraser Range Project is funded to the completion of pre-feasibility by IGO. The Fraser
Range Project consists of a substantial tenement holding in the Albany-Fraser Belt, which hosts Australia’s
two most significant discoveries of the last decade (the Tropicana Gold Deposit and the Nova Nickel-
Copper-Cobalt Deposit).
Victoria
Orion Minerals holds the right to explore for copper, nickel and platinum-group elements within the
historic Walhalla Project area.
3. RATIONALE FOR THE COMPANY’S SECONDARY LISTING
At present, the South African Exchange Control Regulations restrict South African residents from investing
in offshore companies that own assets in South Africa where, in doing so, they would create a so-called
“loop structure”. South African residents are however free to acquire and trade shares listed on the JSE
including into foreign registered companies who have primary or secondary listings on the JSE.
The rationale for the Secondary Listing for the Company is as follows:
- It provides Orion Minerals with an additional market through which the efficient funding of its South
African projects may be facilitated from within South Africa.
- It facilitates direct investment in Orion Minerals by South African residents, including ongoing or
increased participation by existing Orion Minerals shareholders that are South African residents.
- It allows Orion Minerals to market itself and raise its profile in South Africa, thereby providing Orion
Minerals with better access to South African institutions and to capitalise on funds that are locked
within South Africa’s borders due to South African Exchange Control restrictions.
- It provides opportunities for South African State Owned Entities to invest in the Prieska Project.
- It focusses the attention of potential South African investors on the merits of investing in Orion
Minerals, thereby helping to enlarge the potential investor pool for the Company and over time improve
the liquidity and marketability of Orion Minerals Ordinary Shares.
- It allows the possibility of Orion Minerals using its JSE-listed Ordinary Shares to make project
acquisitions through non-cash scrip settlements listed on the JSE that would otherwise be precluded
due to South African Exchange Control restrictions.
- It adds further momentum to Orion Minerals’ base metal development strategy in South Africa.
4. PROSPECTS OF ORION MINERALS FOLLOWING THE SECONDARY LISTING
The Company’s principal project is the Prieska Project, which covers prospective unmined dip and strike
extensions from historical underground mining where the mineralisation had previously been delineated
by extensive drilling and geophysics.
The Company’s aim is to fast track development at the Prieska Project and funds will principally be used
to progress the intensive resource drilling campaign, currently underway. The drilling program is the next
step in the process to define a maiden Mineral Resource estimate (as defined in the Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code)) and will be fed
into the recently commenced bankable feasibility study (“BFS”). The BFS will build on both the substantial
existing historical dataset relating to mining and processing activities as well as the new information being
generated by the onsite activities.
With the above in mind, future funds raised on the JSE will also be used for the exploration and
development of the Company’s South African projects.
5. SHARE CAPITAL
The issued share capital of Orion Minerals as at the date of this announcement is as follows:
Fully paid Ordinary Shares 990 420 440
Partly paid contributing shares 58 775
The Company does not hold any Ordinary Shares in treasury. The small number of partly paid contributing
shares are not listed on the ASX and nor will these shares be listed on the JSE. Under the terms of the
Company Constitution, the partly paid contributing shares are held by the directors in trust for the Company
and then be disposed of in such manner and on such terms as the directors determine.
On the Listing Date, all Ordinary Shares will rank pari passu in all respects, including in respect of voting
rights and dividends and other distributions.
Once listed, Ordinary Shares will be traded on the JSE in electronic form only (as dematerialised shares)
and will be trading for electronic clearing and settlement, via Strate Proprietary Limited (“Strate”),
immediately following the Secondary Listing. All investors owning dematerialised Ordinary Shares or
wishing to trade their Ordinary Shares on the JSE are required to appoint either a broker or a Central
Securities Depository Participant (“CSDP”) in South Africa to act on their behalf and to handle their
settlement requirements. If you have any doubt as to the mechanics of Strate, please consult your broker,
CSDP or other appropriate adviser. For further information, Strate’s website is www.strate.co.za.
6. FINANCIAL INFORMATION
The basic earnings, diluted earnings, headline earnings and diluted headline earnings (as defined in terms
of the South African Institute of Chartered Accountants Circular 2/2013) per share of Orion Minerals for
the six months ended 31 December 2016, the six months ended 31 December 2015 and the twelve months
ended 30 June 2016 are as follows:
Reviewed Reviewed Audited
Six months ended Six months ended Twelve months ended
31 December 2016 31 December 2015 30 June 2016
AUD AUD AUD
Loss for the year attributable
to equity shareholders (2 635 561) (1 709 520) (2 528 188)
Headline earnings
adjustments:
Impairment of non-current
assets reversal - 399 170 414 764
Plant and equipment written
off - 641 3 238
Total headline earnings
adjustments - 399 811 418 002
Headline earnings (2 635 561) (1 309 709) (2 110 186)
Weighted average number of
Ordinary Shares used as the
denominator in calculating
basic earnings per share 501 432 152 319 469 250 372 583 775
Basic earnings per share
(cents) (0.53) (0.54) (0.68)
Headline earnings per share
(cents) (0.53) (0.41) (0.57)
Diluted earnings per share and diluted headline earnings per share do not differ from earnings per share
and headline earnings per share, respectively.
The historical financial information of Orion Minerals is available on the Company’s website,
www.orionminerals.com.au.
7. MATERIAL CHANGES
Significant changes to the financial position and trading position of the Company since the publication of
the Company’s interim financial report for the six month period ended 31 December 2016, as detailed in
the Company’s ASX announcements, Quarterly Activities Reports and Quarterly Cashflow Reports dated
28 April 2017 and 28 July 2017, are set out below.
In March 2017, following receipt of shareholder approval, the Company issued 232 692 294 convertible
notes, each with a face value of AUD 2.6 cents, raising AUD 6.05 million in order to complete the
acquisition of Agama. The purchase consideration paid on settlement of the acquisition was AUD 5.5
million (ZAR 53 million), of which AUD 3.3 million (ZAR 31.5 million) was settled in cash and AUD 2.2
million (ZAR 21.5 million) was settled through the issue of Ordinary Shares.
On 12 April 2017, the Company announced that it had taken another important step in its base metal
development strategy in South Africa after entering into an agreement (“Placement Agreement”) with
Tembo Capital Mining Fund II LP (“Tembo”), which contemplated that Tembo would acquire a cornerstone
stake in Orion Minerals and a strategic relationship would be formed between the two groups. The
Placement Agreement provided for Tembo to subscribe for Ordinary Shares at an issue price of AUD 2.4
cents per Ordinary Share up to a maximum of AUD 4.7 million which would give Tembo a 19.9% holding
in Orion Minerals, subject to the satisfaction of certain conditions including due diligence on Orion Minerals
and its subsidiaries to Tembo’s satisfaction (including with respect to the Company’s operating budget and
financing plan) and the Company’s shareholders approving the Placement. The Placement formed part of
a proposed placement, approved by Shareholders at a general meeting held on 17 May 2017, of a
maximum of 200 million Ordinary Shares to Tembo (or its nominees) and/or sophisticated and professional
investors at an issue price of AUD 2.4 cents each to raise a maximum of AUD 4.8 million no later than
17 August 2017.
In June 2017, Tembo confirmed completion of satisfactory due diligence and nominated that it would
subscribe for 125 million Ordinary Shares in the Placement at an issue price of AUD 2.4 cents per Ordinary
Share raising AUD 3 million.
On 18 August 2017, the Company announced that it had entered into an agreement with Tembo whereby
Tembo would subscribe for a further 73 million Ordinary Shares in the Placement to raise AUD 1.75 million
at an issue price of AUD 2.4 cents per Ordinary Share.
In addition to the Placement, a AUD 6 million bridge loan facility was agreed with Tembo (“Bridge Loan
Agreement”). Under the terms of the Bridge Loan Agreement, Orion Minerals has agreed that it will use
its best endeavours to undertake a capital raising by 15 December 2017, to raise additional equity to
progress the Prieska Project BFS and to continue its South African exploration programs. Orion Minerals
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.
Tembo’s agreement to the Placement and the Bridge Loan Agreement follows its decision to become a
cornerstone shareholder in Orion Minerals to facilitate the acquisition of the Prieska Project via its initial
AUD 3 million investment in Orion by way of convertible notes issued as part of the 232 692 294 convertible
notes issued in March 2017 as mentioned above.
8. MAJOR SHAREHOLDERS
Those Shareholders of the Company, who, as at the date of this announcement insofar as is known to
Orion Minerals, directly or indirectly, were beneficially interested in 5% or more of the Ordinary Shares of
Orion Minerals are set out below:
Shareholder Number of Ordinary Percentage
Shares shareholding (%)
Ndovu Capital X BV (Tembo) 198 000 000 19.99
Tarney Holdings Proprietary Limited1 92 541 324 9.34
Silja Investment Limited2 and Alexander Haller3 69 119 936 6.98
Independence Group NL 54 166 666 5.47
Total 413 827 926 41.78
1 Associated with Denis Waddell (Non-Executive Chairman)
2 Associated with Alexander Haller (Non-Executive Director)
3 Non-Executive Director
9. BOARD OF DIRECTORS
The details of the executive and non-executive directors of the Company are as follows:
Directors of Orion Minerals Capacity
Errol Smart Managing Director
Denis Waddell Non-Executive Chairman
William Oliver Non-Executive Director
Alexander Haller Non-Executive Director
Director Qualifications, experience and expertise
Errol Smart PrSciNat, BSc(Hons) Geology (University of Witwatersrand) NHD
Economic Geology (Technikon Witwatersrand)
Appointed
26 November 2012 Mr Smart is a geologist, registered with the South African Council of
Natural Scientific Professionals, a Recognised Overseas Professional
Organisation in terms of the 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves
(“JORC”) purposes. Mr Smart has more than 25 years of industry
experience across all aspects of exploration, mine development and
operations with experience in precious and base metals. Mr Smart has
held positions in Anglogold, Cluff Mining, Metallon Gold, Clarity Minerals
LionGold Corporation and African Stellar Holdings. Mr Smart’s senior
executive roles have been on several boards of companies listed on
both the TSX and ASX.
Denis Waddell ACA, FAICD
Appointed Mr Waddell is a Chartered Accountant with extensive experience in the
27 February 2009 management of exploration and mining companies. Mr Waddell founded
Tanami Gold NL in 1994 and was involved with the Company as
Managing Director and then Chairman and Non-Executive Director until
2012. Prior to founding Tanami Gold NL, Mr Waddell was the Finance
Director of the Metana Minerals NL group.
During the past 30 years, Mr Waddell has gained considerable
experience in corporate finance and operations management of
exploration and mining companies.
William Oliver BSc (Hons) Geology (UWA), Grad Dip App Fin (FINSIA), MAIG,
MAusIMM
Appointed
7 April 2014 Mr Oliver is a geologist with over 16 years’ experience in the
international resources industry working for both major and junior
companies. Mr Oliver has had wide-ranging exploration experience with
considerable success and has expertise in project identification and
acquisition. Mr Oliver has led exploration teams in Europe and Australia,
including senior roles with Harmony Gold, Iberian Resources, BC Iron
and Bellamel Mining, and most recently was the Managing Director of
Signature Metals.
Mr Oliver is a director of Celsius Coal and Minbos Resources Limited,
both listed companies.
Alexander Haller BSc (Economics)
Appointed Mr Haller is a partner of Zachary Capital Management, providing
27 February 2009 advisory services to a number of private investment companies,
including Silja Investment Ltd, focusing on the principal investment
activities for these companies. From 2001 to 2007 Mr Haller worked in
the corporate finance division at JP Morgan in the U.S, advising on
corporate mergers and acquisitions as well as financing in both the
equity and debt capital markets.
Mr Haller is a director of UMS Limited and former director of Shaft
Sinkers PLC, both listed companies.
10. DIRECTORS’ RESPONSIBILITY STATEMENT
The directors of Orion Minerals, whose names are given in paragraph 9 above, confirm that, to the best of
their knowledge and belief, the Company has adhered to all legal and regulatory requirements of the ASX.
11. WORKING CAPITAL STATEMENT
Orion Minerals recorded a net loss of AUD 2.53 million for the year ended 30 June 2016 and the
Company’s position as at 30 June 2016 was as follows:
- The Company had cash reserves of AUD 0.65 million and had negative operating cash flows of
AUD 1.38 million (including AUD 1.45 million in payments for exploration and evaluation) for the year
ended 30 June 2016;
- The Company had positive working capital at 30 June 2016 of AUD 1.26 million; and
- The Company’s main activity is exploration and as such it does not have a source of income, rather it
is reliant on debt and/or equity raisings to fund its activities.
Cash on hand at 30 June 2017 was AUD 3.4 million, however current forecasts indicate that this will not
be sufficient to fund planned exploration and operational activities during the next twelve months and to
maintain the Company’s tenements in good standing. Accordingly, Orion Minerals will be required to raise
additional equity, consider alternate funding options or a combination of the foregoing.
The directors of Orion Minerals are confident that the Company will raise sufficient cash to ensure that the
Company can meet its minimum exploration and operational expenditure commitments for at least the next
twelve months and maintain the Company’s tenements in good standing and pay its debts, as and when
they fall due. The Company has previously been successful in raising capital as and when required as
evidenced by capital raising initiatives of AUD 2.54 million during the year ended 30 June 2016 and in
September 2016, a further AUD 227 500 was raised, to support the Company’s exploration programs.
Additionally, the Company raised AUD 6.05 million through the issue of convertible notes and
AUD 2.2 million through the issue of Ordinary Shares as part of the acquisition of Agama during
March 2017. The Company also raised AUD 3 million through the placement of 125 million Ordinary
Shares to Tembo in June 2017 and a further AUD 1.75 million through the placement of 73 million Ordinary
Shares to Tembo in August 2017. In addition, a AUD 6 million bridge loan facility has been agreed with
Tembo, as set out more fully in paragraph 7 above.
Accordingly, the directors of Orion Minerals have no reason to believe that the working capital available to
the Orion Minerals or its group, in conjunction with that of the imminent capital raisings mentioned in this
pre-listing announcement, will be insufficient for at least twelve months from the date of listing.
12. FURTHER INFORMATION
All documents and announcements which Orion Minerals has made public over the last two years in
consequence of having its securities listed on the ASX, including financial information, annual reports and
regulatory announcements are available for download on the Company’s website at
www.orionminerals.com.au.
13. SALIENT DATES AND TIMES
2017
Publish pre-listing announcement on the Stock Exchanges News
Service of the JSE (“SENS”) Monday, 11 September
Listing and commencement of trading of Orion Minerals Ordinary
Shares on the Main Board of the JSE from 09:00 on Monday, 18 September
11 September 2017
Transaction Adviser and Sponsor
Merchantec Capital
Corporate Adviser
Qinisele Resources
Legal Advisers
Falcon & Hume Attorneys Inc.
Tax Advisers
Edward Nathan Sonnenbergs Inc.
DISCLAIMER
This pre-listing announcement does not constitute an offer to the public for the sale of or subscription for, or
the solicitation of an offer to buy and/or subscribe for, shares as defined in the South African Companies Act,
No. 71 of 2008 (as amended) or otherwise (the “Companies Act”) and will not be distributed to any person in
South Africa in any manner which could be construed as an offer to the public in terms of the Companies Act.
This pre-listing announcement does not constitute a prospectus registered and/or issued in terms of the
Companies Act.
This pre-listing announcement includes statements about Orion Minerals that are, or may be deemed to be
forward-looking statements. All statements other than statements of historical fact are, or may be deemed to
be, forward-looking statements. These forward-looking statements are not based on historical facts, but rather
reflect current expectations concerning future results and events and generally may be identified by the use of
forward-looking words such as “targets”, “believe”, “aim”, “expect”, “project”, “anticipate”, “intend”, “foresee”,
“forecast”, “likely”, “should”, “planned”, “may”, “will”, “estimated”, “potential” or similar words and phrases.
Examples of forward-looking statements include statements regarding a future financial position or future
profits, cash flows, corporate strategy, estimates of capital expenditures, acquisition strategy, or future capital
expenditure levels, and other economic factors, such as, amongst other things, interest and exchange rates
and public sector spend and resource allocation.
By their nature, forward-looking statements involve known and unknown uncertainties, assumptions and other
important factors, because they relate to events and depend on circumstances that may or may not occur in
the future, whether or not outside of the control of Orion Minerals. Such factors may cause Orion Minerals’
actual results, financial and operating conditions, liquidity and the developments within the industry in which
Orion Minerals intends to operate to differ materially from those made in, or suggested by, the forward-looking
statements contained in this pre-listing announcement. Orion Minerals cautions that forward-looking
statements are not guarantees of future performance.
All these forward-looking statements are based on estimates and assumptions made by Orion Minerals, all of
which estimates and assumptions, although Orion Minerals believes them to be reasonable, are inherently
uncertain. Accordingly, no assurance can be given that any such forward-looking statements will prove to have
been correct. Any forward-looking statement made in this pre-listing announcement or elsewhere is applicable
only at the date on which such forward-looking statement is made. New factors that could cause the business
of Orion Minerals not to develop as expected may emerge from time to time and it is not possible to predict all
of them. Further, the extent to which any factor or combination of factors may cause actual results to differ
materially from those contained in any forward-looking statement is not known. Orion Minerals has no duty to,
and does not intend to, update or revise the forward-looking statements contained in this pre-listing
announcement after the date of this pre-listing announcement, except as may be required by law or regulation.
Date: 11/09/2017 09:00:00 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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