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ORION MINERALS LIMITED - Completion of BEE Restructure Share Issue marks another key step forward for Prieska Copper-Zinc Project

Release Date: 12/09/2019 09:10
Code(s): ORN     PDF:  
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Completion of BEE Restructure Share Issue marks another key step forward for Prieska Copper-Zinc 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 Minerals Limited (ASX/JSE: ORN) (Orion or the Company) is pleased to announce that
the major component of the Black Economic Empowerment (BEE) Restructure referred to in its
recent announcements has now been completed, marking another important step forward
for its flagship Prieska Copper-Zinc Project in South Africa.

The transactions announced today includes the issue of Orion shares to key existing BEE
shareholders at the asset level and a simultaneous transaction with new BEE partner
company Prieska Resources (Pty) Ltd (Prieska Resources).

The effect of the transactions is to implement an ownership structure whereby Orion holds a
70% interest in Repli Trading No. 27 (Pty) Ltd (Repli) (which owns the majority of the Prieska
Project), alongside Prieska Resources with 20% and the Prieska Community Trust and Prieska
Employees Trust with 5% each – a structure that complies fully with the objectives of South
Africa’s Mining Charter 3.

Commenting on the transactions, Orion’s Managing Director and CEO, Errol Smart, said:
“We are pleased to have completed the major component of our BEE restructuring today.
This comes hard on the heels of the grant of the Mining Right last week and shows that we are
continuing to tick all of the key boxes required to move the Prieska Project forward as rapidly
as possible. The structure now in place, means that all of our key BEE partners are now fully
aligned with international investors as Orion shareholders, while also complying with the
objectives of Mining Charter 3.

Our original BEE shareholders in Repli are exchanging their shares at the asset level for Orion
shares. At the same time, we welcome the inclusion of top-class BEE partners Safika, KNI and
Black Star, who through Prieska Resources, will fund their proportionate share of Prieska
development costs through their 20% shareholding at the asset level. These BEE partners are
already Orion shareholders after participating in the $4 million share placement at $0.04 a
share completed earlier this year.”

Transaction Details

Shareholders are referred to the announcements by the Company on 16 April 2019 and 2
August 2019, regarding the restructure of its BEE participation in its subsidiaries, being Repli,
which owns the majority of the Prieska Copper-Zinc Project (Prieska Project) and which has
recently been granted a Mining Right (refer ASX release 3 September 2019), Vardocube (Pty)
Limited (Vardocube), Bartotrax (Pty) Limited (Bartotrax) and Rich Rewards Trading 437 (Pty)
Limited (Rich Rewards)(BEE Restructure).

In terms of the BEE Restructure, the existing BEE shareholders in Repli, Rich Rewards and
Bartotrax, being the Mosiapoa Family Trust (Mosiapoa) and Power Matla (Pty) Ltd (Power
Matla), have exchanged their shares in Repli, Rich Rewards and Bartotrax (as applicable) for
48.48M and 37.58 M Orion fully paid ordinary shares (Shares), respectively, at a deemed issue
price of $0.0314 per Share.

In a simultaneous transaction, new BEE shareholder, Prieska Resources, whose shareholders
recently subscribed for a ZAR20M placement of Orion Shares at ZAR0.40 per Share (~$2.0M at
$0.04) (refer ASX release 6 September 2019) has acquired an effective 20% interest in Repli for
a purchase consideration of ZAR142.78M (~$14.08M), with this acquisition being vendor
financed by Orion.

Prieska Resources is a BEE company whose shares are held by Black Star Minerals (Pty) Ltd
(17.31%), Kolobe Nala Investment Company (Pty) Ltd (37.97%) and Safika Resources (Pty) Ltd
(44.72%) (refer Figure1 and ASX release 2 August 2019).

The vendor finance advanced by Orion comprises two parts, namely:
-   A secured loan for ZAR10.14M plus interest, at South African Prime Interest Rate,
    repayable within 12 months after the project finance for the Prieska Project is closed; and
-   Preference shares in Prieska Resources issued to Orion to the value of ZAR132.64M which
    are redeemable by Prieska Resources at any time prior to the 8 th anniversary of their date
    of issue at an IRR of 12% to Orion, failing which, any of the preference shares, held by
    Orion, remaining after the 8th anniversary, will be automatically converted pro rata into
    ordinary shares in Prieska Resources up to a maximum of 49% of the shares in Prieska
    Resources or, subject to compliance with South African laws, an equivalent number of
    shares directly in Repli.

Simultaneously with the acquisition by Prieska Resources, the Orion Siyathemba Community
Trust (Prieska Community Trust) and the Orion Siyathemba Employees Trust (Prieska
Employees Trust) have each acquired an effective 5% interest in Repli (refer Figure 1). While
this acquisition was for nominal consideration, in terms of the prevailing Mining Charter 3
legislation, Orion and Prieska Resources will be entitled to recover the costs incurred on
behalf of the two trusts in developing the Prieska Project from future project cash-flows.

Orion and Prieska Resources will both contribute on a pro-rata basis to the equity financing
costs of the Prieska Mine construction.

Figure 1: Repli group structure following BEE Restructure.

The BEE Restructure also involves a proposed exchange of shares by Mosiapoa and another
existing BEE shareholder, African Exploration and Mining Finance Corporation (SOC) Limited in
Vardocube, for Orion Shares. The completion of this component of the BEE Restructure
remains subject to the satisfaction of certain conditions precedent which are being
progressed. Once the conditions precedent have been satisfied, Orion will finalise the
implementation of this final component of the BEE Restructure shortly.

The Shares were issued pursuant to shareholder approval obtained at the Company's general
meeting on 7 June 2019 and ASX waiver granted 11 September 2019.

Please find attached an Appendix 3B relating to today’s issue of the Shares to Mosiapoa and
Power Matla.

Errol Smart
Managing Director and CEO

Investors                              Media                                                  JSE Sponsor
Errol   Smart – Managing               Nicholas Read               Barnaby Hayward            Rick Irving
Director & CEO
Denis Waddell – Chairman               Read Corporate, Australia   Tavistock, UK              Merchantec Capital
T: +61 (0) 3 8080 7170                 T: +61 (0) 419 929 046      T: +44 (0) 787 955 1355    T: +27 (0) 11 325 6363            E:nicholas@readcorporate    E:   E:

Suite 617, 530 Little Collins Street
Melbourne, VIC, 3000


 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 3B
                                                                                                   New issue announcement

                                                                                                    Rule 2.7, 3.10.3, 3.10.4, 3.10.5

                                                Appendix 3B
       New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and
documents given to ASX become ASX’s property and may be made public.
Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity
 Orion Minerals Ltd

 76 098 939 274

We (the entity) give ASX the following information.

Part 1 - All issues
You must complete the relevant sections (attach sheets if there is not enough space).

 1         +Class  of +securities issued or to                Fully paid ordinary shares.
           be issued

 2         Number of +securities issued or to                 86,056,022
           be issued (if known) or maximum
           number which may be issued

 3         Principal terms of the +securities                 Fully paid ordinary shares.
           (e.g. if options, exercise price and
           expiry date; if partly paid
           +securities, the amount outstanding
           and due dates for payment; if
           +convertible       securities,    the
           conversion price and dates for

 4       Do the +securities rank equally in       Shares rank equally with all other fully paid
         all respects from the +issue date        ordinary shares on issue.
         with an existing +class of quoted

         If the additional +securities do not
         rank equally, please state:
         - the date from which they do
         - the extent to which they
             participate for the next
             dividend, (in the case of a trust,
             distribution)      or     interest
         - the extent to which they do not
             rank equally, other than in
             relation to the next dividend,
             distribution or interest payment

 5       Issue price or consideration             Deemed issue price of 3.14 cents per fully paid
                                                  ordinary share.
                                                  Issue of fully paid ordinary shares to existing
                                                  Black Economic Empowerment (BEE) Investors to
                                                  satisfy, in full, the repurchase of shares held by
                                                  existing BEE investors in Orion’s subsidiary entities,
                                                  Repli Trading No 27 (Pty) Ltd, Rich Rewards
                                                  Trading 437 (Pty) Ltd and Bartotrax (Pty) Ltd
                                                  The deemed issue price of 3.14 cents per fully
                                                  paid ordinary share is in consideration for the
                                                  price payable by the Company's Subsidiaries to
                                                  the relevant Existing BEE Investor for the
                                                  repurchase of shares.

 6       Purpose of the issue                     The fully paid ordinary shares were issued as
         (If issued as consideration for the      consideration for the repurchase by the
         acquisition of assets, clearly           Company's subsidiaries Repli, Rich Rewards and
         identify those assets)                   Bartotrax of shares held by the Existing BEE
                                                  Investors in those companies and as such, no
                                                  funds will be raised from the issue of the fully
                                                  paid ordinary shares.

 6a      Is the entity an +eligible entity that   No.
         has obtained security holder
         approval under rule 7.1A?

         If Yes, complete sections 6b – 6h
         in relation to the +securities the
         subject of this Appendix 3B, and
         comply with section 6i

 6b      The date the security holder             Not applicable.
         resolution under rule 7.1A was

 6c      Number of +securities issued             Not applicable.
         without security holder approval
         under rule 7.1

 6d      Number of +securities issued with                        Not applicable.
         security holder approval under rule

 6e      Number of +securities issued with                        Not applicable.
         security holder approval under rule
         7.3, or another specific security
         holder approval (specify date of

 6f      Number of +securities issued under                       Not applicable.
         an exception in rule 7.2

 6g      If +securities issued under rule                         Not applicable.
         7.1A, was issue price at least 75%
         of 15 day VWAP as calculated
         under rule 7.1A.3? Include the
         +issue date and both values.
         Include the source of the VWAP

 6h      If +securities were issued under                         Not applicable.
         rule     7.1A      for    non-cash
         consideration, state date on which
         valuation of consideration was
         released     to    ASX      Market

 6i      Calculate the entity’s remaining                         Rule 7.1 – 337,601,257.
         issue capacity under rule 7.1 and
         rule 7.1A – complete Annexure 1                          Rule 7.1A – Not applicable.
         and release to ASX Market

 7       +Issue    dates                                          12 September 2019.
         Note: The issue date may be prescribed by ASX
         (refer to the definition of issue date in rule 19.12).
         For example, the issue date for a pro rata
         entitlement issue must comply with the applicable
         timetable in Appendix 7A.

         Cross reference: item 33 of Appendix 3B.

                                                                  Number                    +Class

 8       Number and +class
         of all                                                   2,250,675,046             Fully paid ordinary
         +securities quoted on ASX                                                          shares
         (including the +securities in section
         2 if applicable)

                                                          Number       +Class

 9       Number and +class of all                    222,307,679       Convertible notes.
         +securities not quoted on ASX
                                                     100,466,749       Unlisted options exercisable at $0.05
         (including the +securities in                                 expiring 31 October 2019.
         section 2 if applicable)
                                                         250,000       Unlisted options exercisable at $0.045
                                                                       expiring 30 November 2019.

                                                         250,000       Unlisted options exercisable at $0.06
                                                                       expiring 30 November 2019.

                                                       2,200,000       Unlisted options exercisable at $0.05
                                                                       expiring 30 June 2020.

                                                       1,900,000       Unlisted options exercisable at $0.035
                                                                       expiring 30 June 2020.

                                                      16,333,333       Unlisted options exercisable at $0.02
                                                                       expiring 30 November 2020.

                                                      18,333,333       Unlisted options exercisable at $0.035
                                                                       expiring 30 November 2020.

                                                      18,333,334       Unlisted options exercisable at $0.05
                                                                       expiring 30 November 2020.

                                                      12,100,000       Unlisted options exercisable at $0.03
                                                                       expiring 31 May 2022.

                                                      12,100,000       Unlisted options exercisable at $0.045
                                                                       expiring 31 May 2022.

                                                      12,100,000       Unlisted options exercisable at $0.06
                                                                       expiring 31 May 2022.

                                                       5,100,000       Unlisted options exercisable at $0.05
                                                                       expiring 31 March 2023.

                                                       5,100,000       Unlisted options exercisable at $0.06
                                                                       expiring 31 March 2023.

                                                       5,100,000       Unlisted options exercisable at $0.07
                                                                       expiring 31 March 2023.

                                                      30,500,000       Unlisted options exercisable at $0.04
                                                                       expiring 30 April 2024.

                                                      30,500,000       Unlisted options exercisable at $0.05
                                                                       expiring 30 April 2024.

                                                      30,500,000       Unlisted options exercisable at $0.06
                                                                       expiring 30 April 2024.

                                                      11,000,000       Unlisted options exercisable at $0.03
                                                                       expiring 17 June 2024.

 10      Dividend policy (in the case of a         Not applicable.
         trust, distribution policy) on the
         increased capital (interests)

Part 2 - Pro rata issue
Questions 11 to 33 Not Applicable

Part 3 - Quotation of securities
You need only complete this section if you are applying for quotation of securities

+ See chapter 19 for defined terms.

                                                                                                                               Appendix 3B
                                                                                                                    New issue announcement

    34    Type of +securities
          (tick one)
    (a)           +Securities described in Part 1

    (b)           All other +securities
                  Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee
                  incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)
Additional securities forming a new class of securities
Questions 35 to 37 - Not Applicable

Entities that have ticked box 34(b)
Questions 38 to 42 - Not Applicable
Quotation agreement
1         +Quotation      of our additional +securities is in ASX’s absolute discretion. ASX may quote the
          +   securities on any conditions it decides.
2         We warrant the following to ASX.
          -           The issue of the +securities to be quoted complies with the law and is not for an
                      illegal purpose.
          -           There is no reason why those +securities should not be granted +quotation.
          -           An offer of the +securities for sale within 12 months after their issue will not
                      require disclosure under section 707(3) or section 1012C(6) of the Corporations
                      Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

          -           Section 724 or section 1016E of the Corporations Act does not apply to any
                      applications received by us in relation to any +securities to be quoted and that no-
                      one has any right to return any +securities to be quoted under sections 737, 738 or
                      1016F of the Corporations Act at the time that we request that the +securities be
          -           If we are a trust, we warrant that no person has the right to return the +securities to
                      be quoted under section 1019B of the Corporations Act at the time that we request
                      that the +securities be quoted.
3         We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action
          or expense arising from or connected with any breach of the warranties in this agreement.
4         We give ASX the information and documents required by this form. If any information or
          document is not available now, we will give it to ASX before +quotation of the +securities
          begins. We acknowledge that ASX is relying on the information and documents. We
          warrant that they are (will be) true and complete.

Sign here: Martin Bouwmeester
           Company Secretary
Date:      12 September 2019

+ See chapter 19 for defined terms.


Date: 12/09/2019 09:10:00
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