Wrap Text
Orion Progresses the Acquisition of the Okiep Copper Project
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 Progresses the Acquisition of the Okiep Copper Project
- Acquisition agreements are in the process of being signed to allow closing in several stages as and
when the outstanding conditions precedent are met.
- The remaining total aggregate purchase consideration of approximately ZAR59.60M payable by
Orion, in combination of cash and issue of Orion Shares remains unchanged, with CPI adjustment for
deferred phases of consideration also payable.
- The first Phase settlement, being ZAR10.86M cash and ZAR35.10M in Orion Shares, will be completed
immediately following South African Exchange Control Approval being received.
- The initial consideration includes the important SAFTA Mining Right which was transferred to the
ownership of NOM in December 2023.
Orion's Managing Director and CEO, Errol Smart, commented:
"We are extremely pleased that we have finally received confirmation that the majority of the outstanding
conditions have been fulfilled for the acquisition of the Okiep mineral rights first announced on 2 February
2021.
"While we have been able to continue operating on the properties and progressing the projects, we have
now moved to finalise the Flat Mines Bankable Feasibility Study on the NOM Mining Right. We are now only
awaiting the approval of the water use licence before the project is fully permitted, allowing us to commence
mine development. The timing is therefore opportune to complete the acquisition of the Mining Right before
progressing the funding of the mine.
"The conclusion of the BFS report is only awaiting the results of confirmation drilling and metallurgical test work
that is currently underway and is expected to be concluded by June 2024."
Orion Minerals Ltd (ASX/JSE: ORN) (Orion or the Company) is pleased to advise that it has taken another key
step in its strategy to become a leading diversified international base metals producer after it and all the
relevant parties, other than the Industrial Development Corporation of South Africa Ltd (IDC) (which is in the
process of finalising internal approval), have signed addenda to the agreements pursuant to which Orion will
acquire the controlling interest in the Okiep Copper Project (OCP), located approximately 570km north of
Cape Town in the Northern Cape Province of South Africa.
As set out in the announcements by Orion on 2 February 2021 and 2 August 2021, Orion exercised a
restructured option to directly acquire the mineral rights (Mineral Rights), mineral data, rehabilitation
guarantees, any specified contracts and any other assets identified by Orion (Sale Assets) held by Southern
African Tantalum Mining (Pty) Ltd (SAFTA), Nababeep Copper Company (Pty) Ltd (NCC) and Bulletrap
Copper Co (Pty) Ltd (BCC) (collectively the Target Entities), rather than acquire the shares in the Target Entities
themselves (Okiep Transaction).
The Sale Assets will be acquired by two Orion subsidiary companies, namely, New Okiep Exploration Company
(Pty) Ltd (initially 100% Orion-owned) (New Okiep Exploration) and New Okiep Mining Company (Pty) Ltd
(initially 56.25% owned by Orion and 43.75% owned by the IDC) (New Okiep Mining) (collectively the
Purchasers).
For various reasons, including the nature and timing of certain regulatory processes and approvals required
for the transfer of the Sale Assets to the Purchasers, the parties to the Okiep Transaction agreements, other
than IDC in respect of the SAFTA, have signed the addenda to amend the Okiep Transaction agreements
(Addenda). The nature and purpose of the Addenda is to change, amongst other things, the timing and
manner of implementing the Okiep Transactions.
The aggregate purchase consideration remaining payable by Orion and its subsidiary, Area Metals Holdings
No 6 (Pty) Ltd (AMH6), for the Sale Assets is approximately ZAR59.60 million (approximately A$4.88 million1,
which purchase consideration will be adjusted in certain inflation-related respects (Purchase Consideration).
Whilst the Purchase Consideration will still be settled partly in cash and partly by way of Orion fully paid ordinary
shares (Orion Shares), the transfer of the Sale Assets and the payment of the Purchase Consideration will now
occur in various phases over a period of time (as and when the various Sale Assets are capable of transfer to
the Purchasers) and the Orion Shares comprising the Purchase Consideration in respect of the first phase will
be subject to certain restrictions on their disposal.
In addition to the Purchase Consideration, the conditional deferred payment (as set out in more detail in
Appendix 1) (Agterskot) will be adjusted in certain inflation-related respects. In addition, if any of the following
events occur, namely the Orion Shares cease to be traded on the JSE, there is a change in control of a
Purchaser and/or there is a disposal of the relevant Mineral Rights by a Purchaser (each a Liquidity Event),
then the Agterskot will be settled in cash by way of production-related payments.
A summary of the material terms of the Okiep Transaction agreements (as varied by the Addenda) is included
in Appendix 1.
Next Steps
The parties anticipate implementing the first phase of the BCC and NCC transactions in the coming weeks,
subject to the receipt of the final regulatory approvals in respect of that phase. Once the IDC has obtained
all of its required internal approvals and signed the Addenda relating to the Sale Assets held by SAFTA, Orion
will proceed to submit the final application for regulatory approval in respect of the first phase of the SAFTA
transactions and upon receiving such regulatory approval, implement same.
Orion will seek shareholder approval for the ratification of the agreement to issue Orion Shares in part payment
of the Purchase Consideration as detailed above, at a General Meeting of shareholders, planned to be held
in Q2 CY2024.
For and on behalf of the Board.
Errol Smart
Managing Director and CEO
17 April 2024
1 Based on the AUD:ZAR exchange rate of 12.18 as at 15 April 2024.
ENQUIRIES
Investors Media JSE Sponsor
Errol Smart – Managing Director & CEO Nicholas Read Monique Martinez
Denis Waddell – Chairman Read Corporate, Australia Merchantec Capital
T: +61 (0) 3 8080 7170 T: +61 (0) 419 929 046 T: +27 (0) 11 325 6363
E: info@orionminerals.com.au E: nicholas@readcorporate.com.au E: monique.martinez@merchantec.com
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 (where applicable). 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).
Appendix 1:
Salient Details of Amended Okiep Transaction Agreements
• Agreements Overview
o In order to record the terms and conditions pursuant to which the Purchasers would acquire the
Sale Assets, Orion, certain of its subsidiaries, the Target Entities and their respective shareholders
(collectively the OCP Shareholders and excluding the IDC (in respect of SAFTA), Ten to Twelve (Pty)
Ltd (in respect of NCC) and Blue Mountain Strategy (Pty) Ltd (in respect of BCC), the Selling
Shareholders) on or about 31 July 2021, entered into:
- the SAFTA Asset Acquisition Agreement, in terms of which New Okiep Mining will acquire the
Sale Assets owned by SAFTA (SAFTA Transaction);
- the NCC Asset Acquisition Agreement, in terms of which New Okiep Exploration will acquire
the Sale Assets owned by NCC (NCC Transaction);
- the BCC Asset Acquisition Agreement, in terms of which New Okiep Exploration will acquire
the assets owned by BCC (BCC Transaction); and
- the Transaction Cooperation Agreement, in terms of which the parties to each of the SAFTA
Asset Acquisition Agreement, NCC Asset Acquisition Agreement and the BCC Asset
Acquisition Agreement (collectively, the Acquisition Agreements) agreed to co-operate with
each other in the period between the signature date of the Acquisition Agreements and the
date on which the assets of each of the Target Entities are transferred to either New Okiep
Mining or New Okiep Exploration, as the case may be (Interim Period).
o The rationale for separating the SAFTA Transaction, the NCC Transaction and the BCC Transaction
into separate agreements is principally due to each of the Target Entities having different
shareholders.
o For various reasons, including the nature and timing of certain regulatory processes and approvals
required for the transfer of the Sale Assets to the Purchasers, the parties to the Acquisition
Agreements have agreed to amend the Acquisition Agreements on substantially the same terms
(save for the quantum of consideration) by entering into addenda thereto, the nature and
purpose of which is to change, amongst other things, the timing and manner of implementing the
Okiep Transactions (Addenda) (the Acquisition Agreements, as varied by the Addenda, are the
Transaction Documents).
• Transaction Documents
A summary of the Transaction Documents is set out below:
o Purchase Consideration
- The aggregate purchase consideration which remains payable by Orion and AMH6 to the
Selling Shareholders for the Sale Assets is approximately ZAR59.60 million (approximately
A$4.88 million) (Purchase Consideration) and is to be settled as follows:
o ZAR37.37 million in relation to the Sale Assets held by SAFTA (SAFTA Purchase
Consideration), which is to be settled in three phases (upon receipt of the required
regulatory approvals for the transfer of the relevant Sale Assets from SAFTA to New Okiep
Mining in respect of that phase) as follows:
Phase of Portion of SAFTA Purchase Portion of SAFTA Purchase Consideration settled by
SAFTA Consideration payable in way of Orion issuing Orion Shares to the Selling
Transaction cash by AMH6 to the Selling Shareholders of SAFTA, which Orion Shares will then
Shareholders of SAFTA be admitted to trading on the JSE ("SAFTA Share
Consideration")
1 ZAR1.34 million ZAR26.68 million
2 ZAR0.27 million ZAR5.34 million
3 ZAR0.18 million ZAR3.56 million
Total ZAR1.79 million ZAR35.58 million
(the aggregate of the SAFTA Purchase Consideration in respect of the first phase of the
SAFTA Transaction being collectively referred to as the SAFTA Phase 1 Consideration);
o ZAR15.14 million in relation to the Sale Assets held by NCC (NCC Purchase Consideration),
which is to be settled in two phases (upon receipt of the required regulatory approvals
for the transfer of the relevant OCP Sale Assets from NCC to New Okiep Exploration in
respect of that phase) as follows:
Phase of Portion of NCC Purchase Portion of NCC Purchase Consideration settled by
NCC Consideration payable in way of Orion issuing Orion Shares to the Selling
Transaction cash by AMH6 to the Selling Shareholders of NCC, which Orion Shares will then
Shareholders of NCC be admitted to trading on the JSE ("NCC Share
Consideration")
1 ZAR6.76 million ZAR5.97 million
2 ZAR1.19 million ZAR1.21 million
Total ZAR7.96 million ZAR7.18 million
(the aggregate of the NCC Purchase Consideration in respect of the first phase of the
NCC Transaction being collectively referred to as the NCC Phase 1 Consideration); and
o ZAR7.09 million in relation to the Sale Assets held by BCC (BCC Purchase Consideration),
which is to be settled in two phases (upon receipt of the required regulatory approvals
for the transfer of the relevant OCP Sale Assets from BCC to New Okiep Exploration in
respect of that phase) as follows:
Phase of Portion of BCC Purchase Portion of BCC Purchase Consideration settled by
BCC Consideration payable in way of Orion issuing Orion Shares to the Selling
Transaction cash by AMH6 to the Selling Shareholders of BCC, which Orion Shares will then
Shareholders of BCC be admitted to trading on the JSE ("BCC Share
Consideration")
1 ZAR2.76 million ZAR2.45 million
2 ZAR0.49 million ZAR1.39 million
Total ZAR3.25 million ZAR3.84 million
(the aggregate of the BCC Purchase Consideration in respect of the first phase of the
BCC Transaction being collectively referred to as the BCC Phase 1 Consideration),
(the SAFTA Share Consideration, the NCC Share Consideration and the BCC Share
Consideration being collectively referred to as the Share Consideration).
- The issue price of the Orion Shares in settlement of the Share Consideration (Orion
Consideration Shares) is equal to the 30-day volume weighted average price (VWAP) of the
Orion Shares traded on the Australian Securities Exchange (ASX) and the Johannesburg Stock
Exchange (JSE) during the period:
o ending on 19 January 2024 in respect of the Phase 1 Consideration Shares (being
ZAR0.173); and
o immediately prior to the date on which the relevant Selling Shareholders become entitled
to the balance the Share Consideration in respect of the relevant remaining phase of
the transaction (Residual Share Consideration).
- The Orion Shares to be issued to the Selling Shareholders in partial settlement of the SAFTA
Phase 1 Consideration, the NCC Phase 1 Consideration and the BCC Phase 1 Consideration
(collectively, the Phase 1 Consideration Shares) are subject to the following restrictions on
disposal:
o 25% will not be disposed of prior to the date that is 3 months after the issue of the Phase
1 Consideration Shares;
o 25% will not be disposed of prior to the date that is 6 months after the issue of the Phase
1 Consideration Shares; and
o 25% will not be disposed of prior to the date that is 9 months after the issue of the Phase
1 Consideration Shares,
with the remaining 25% not being subject to any disposal restrictions. If a change of control
of a Purchaser or the disposal of the OCP Sale Assets by a Purchase (Liquidity Event) occurs,
the Phase 1 Consideration Shares will immediately prior to such Liquidity Event cease to be
subject to the disposal restrictions).
- The Purchase Consideration will escalate at an annual rate equal to the South African
weighted annual average consumer price index (CPI) plus 1.5% with effect from 31 January
2024 to the date of issue of the Phase 1 Consideration Shares or the Orion Shares in settlement
of the relevant Residual Share Consideration, as applicable.
- Orion will be entitled in its sole discretion by way of notice in writing to the relevant Selling
Shareholders at any time (and, if the Orion Shares cease to be traded on the JSE, Orion will
be obliged) to settle the Share Consideration in respect of the second and/or third phase of
the Okiep Transactions in cash (and not by way of Orion Shares), which payment will occur
on the same date as AMH6 settles the corresponding cash portion of the Purchase
Consideration in respect of that phase.
- Orion and AMH6 will be entitled at any time by way of notice in writing to the Selling
Shareholders to accelerate and settle their obligations in full in relation to the Purchase
Consideration (in respect of second and/or third phase of the Okiep Transactions) and/or the
Agterskot, provided that the issue price of the Orion Shares will be the 30 Day VWAP during
the period immediately prior to the date of the relevant notice in writing to the Selling
Shareholders.
o Pre-Payment
The obligation to pre-pay a portion of the Purchase Consideration to the OCP Shareholders
ceased with effect from 29 February 2024 and, accordingly, the Purchase Consideration disclosed
above is the amount remaining after the deduction of the ZAR1 million and ZAR7.75 million already
paid by AMH6 to the OCP Shareholders of NCC and BCC, respectively.
o Deferred Payment
- In addition to the Purchase Consideration, the Selling Shareholders will be entitled to a
conditional deferred payment (Agterskot). The Agterskot will be calculated on the basis of
the number of tonnes of Mineral Resources published by Orion in relation the mineral projects
which are the subject of the Mineral Rights (Mineral Projects) in compliance with the JORC
Code, estimated with reference to the relevant cut-off grade described in the table below,
less the tonnes of the baseline JORC Code Mineral Resource, as follows:
- for SAFTA, ZAR11 per tonne of JORC Code Mineral Resource in excess of the baseline
Mineral Resource for the SAFTA Mineral Project of 8,900,000 tonnes and above the
relevant cut-off grade described in the table below; and
- for BCC and NCC, ZAR20 per tonne of JORC Code Mineral Resource that is above the
relevant cut-off grade described in the table below (there being no baseline Mineral
Resource applicable to BCC and NCC),
subject to the maximum Agterskot amount in relation to each Target Entity described in the
table below.
SAFTA NCC BCC TOTAL
Maximum Agterskot value ZAR38,812,500 ZAR29,500,000 ZAR30,000,000 ZAR98,312,500
Agterskot payment per tonne of ore ZAR11.00 ZAR20.00 ZAR20.00 –
Lower Cut Off Grade: Ore 0 - 400m 1.0% 1.1% 1.1% –
below surface (% Cu)
Lower Cut Off Grade: Ore more than 1.2% 1.2% 1.2% –
400m below surface (% Cu)
Note: The ZAR amounts in the table above will escalate at an annual rate equal to CPI plus
1.5% with effect from 31 January 2024 to the date of settlement of the Agterskot and/or
Agterskot Production Payment (as such term is defined below).
- Orion may, at the time of settlement of the Agterskot, agree to satisfy payment of the
Agterskot by way of cash payment or by way of issue of Orion Shares. If the Agterskot will be
settled by way of Orion issuing Orion Shares to each Selling Shareholder in the Target Entity
concerned (Agterskot Shares):
- the relevant number of Agterskot Shares will be issued (i) in relation to any Mineral
Resources identified in relation the Target Entity concerned that may have been
published by Orion on the ASX on or prior to the applicable closing date, at the same
time as the Orion Consideration Shares; and (ii) thereafter twice-annually within 30 days
after the publication by Orion of each of its half-year results and its full year results, in
each case in relation to the Mineral Resources identified and reported in relation to each
Mineral Project since the last half-year or full-year results publication (as the case may
be); and
- the issue price of the Agterskot Shares will be equal to (i) in relation to the Agterskot Shares
contemplated in (i) above, at the same issue price as the Orion Consideration Shares;
and (ii) in relation to the Agterskot Shares contemplated in (ii) above, at the 30-day VWAP
of the Orion Shares traded on the ASX and the JSE in the period immediately after to the
publication date of the relevant half-year or full-year results (as the case may be).
- Pursuant to the Transaction Documents, the Agterskot has been adjusted to cater for:
o the Agterskot being settled quarterly (with relevant quarters coinciding with the financial
year of the Purchasers) in cash if the relevant Purchaser (or any of its affiliates) undertakes
mining on the Minerals Project which is the subject of the relevant Sale Assets (Agterskot
Production Payment); and
o the occurrence of a Liquidity Event, in which case:
• the relevant Phase 1 Consideration Shares will cease to be subject to the restrictions
on disposal specified above; and
• the relevant Purchaser (or its successor in title) will elect to either settle the remaining
balance of the Agterskot (if any) or offer to sell the relevant Sale Assets back to the
relevant Selling Shareholders subject to, amongst other things, the purchase price
(payable in cash) being equal to the aggregate of the Purchase Consideration and
Agterskot payments (other than the Agterskot Production Payment) settled by Orion
and AMH6 in favour of the relevant Selling Shareholders and the approval of
applicable regulatory authorities.
o Supplementary Suspensive Conditions
Phase 1 of the Okiep Transactions are each subject to the fulfilment of the following suspensive
conditions:
- the Foreign Surveillance Department of the South African Reserve Bank has granted its
approval for the relevant components of the Okiep Transaction (as amended by the
Addenda); and
- the South African Takeover Regulation Panel has granted the relevant exemptions for the
Okiep Transaction (as amended by the Addenda).
It is currently expected that these conditions will be satisfied by no later than 3 months after the
date of the planned General Meeting of shareholders.
o Residual Conditions
The second phase and the third phase of the Okiep Transactions are each subject to the granting
of the relevant Mineral Rights and, if applicable, approval from the Minister of the Department of
Mineral Resources and Energy (or his lawful delegate) in terms of the South African Mineral and
Petroleum Resources Development Act, 2002 for the transfer of the relevant Mineral Rights from
each Target Entity to the relevant Purchaser (S11 Approval). In the event that granting of the
relevant Mineral Rights and/or S11 Approval in respect of the second and/or third phase of the
Okiep Transactions is not obtained by 6 July 2026, then the relevant Purchaser (or any of its
affiliates) may apply for a mineral right that incorporates the same minerals (and in the same
location) within 30 days (Substitute Mineral Right), and, if such Substitute Mineral Right is granted
to the relevant Purchaser (or any of its affiliates), the Purchase Consideration is respect of that
phase becomes payable to the relevant Selling Shareholders.
It is currently expected that these conditions will be satisfied by no later than 3 months after the
date of the planned General Meeting of shareholders.
• Transaction Cooperation Agreement
o Access and Developmental Activities
- In terms of the Transaction Cooperation Agreement, the Purchasers are given full and prompt
access to all of the books, records, contracts, documentation, financial information,
personnel, advisors and premises of the Target Entities as well as access to the Mineral Project
sites for the duration of the Interim Period.
- The Purchaser is also entitled to carry out exploration and mining activities at the Mineral
Projects, as may be permissible in terms of the relevant Mineral Rights and subject to all such
activities being undertaken in terms of all applicable laws.
o Mineral Rights Optimisation
In consultation and collaboration with the Target Entities, the Purchasers may propose and
implement various measures and steps that may be taken to supplement, amend or substitute the
Mineral Rights with the primary objective of securing and/or increasing the security of tenure
and/or the value of the Mineral Projects.
o Post-Closing Expenditure Commitment
Orion will, within a period of 12 months after the closing date of each Okiep Transaction, incur
aggregate exploration expenditure of at least ZAR4.0 million (~A$0.33 million) in exploring the
Mineral Projects and in seeking to satisfy the Mineral Resource requirements on the basis of which
the Agterskot will become payable to the Selling Shareholders.
• Other terms and conditions
The Transaction Documents otherwise contain such undertakings, warranties and terms and
conditions as would be standard and customary to include in transactions of this nature.
Date: 17-04-2024 09:02:00
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