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ORION MINERALS LIMITED - Appendix 5B

Release Date: 30/04/2020 09:39
Code(s): ORN     PDF:  
 
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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 or oil and gas exploration entity
               quarterly cash flow report

Name of entity

Orion Minerals Ltd

ABN                                                  Quarter ended (“current quarter”)

76 098 939 274                                       March 2020



Consolidated statement of cash flows                            Current quarter            Year to date
                                                                     $A’000                 (9 months)
                                                                                              $A’000
1.     Cash flows from operating activities
1.1    Receipts from customers                                          ---                    ---
1.2    Payments for
       (a) exploration & evaluation (if expensed)                     (1,369)                (4,195)
       (b) development                                                  ---                    ---
       (c) production                                                   ---                    ---
       (d) staff costs                                                 (397)                 (1,277)
       (e) administration and corporate costs                          (585)                 (2,103)
1.3    Dividends received (see note 3)                                  ---                    ---
1.4    Interest received                                                15                     36
1.5    Interest and other costs of finance paid                         ---                   (371)
1.6    Income taxes paid                                                ---                    ---
1.7    Government grants and tax incentives                             ---                    ---
1.8    Other (provide details if material)                              ---                    ---
1.9    Net cash from / (used in) operating                            (2,336)                (7,910)
       activities

Consolidated statement of cash flows                          Current quarter        Year to date
                                                                  $A’000              (9 months)
                                                                                        $A’000
2.     Cash flows from investing activities
2.1    Payments to acquire:
       (a) entities                                                  ---                  ---
       (b) tenements                                                 ---                  ---
       (c) property, plant and equipment                             ---                  ---
       (d) exploration & evaluation (if capitalised)               (1,585)              (4,678)
       (e) investments                                               ---                  ---
       (f)   other non-current assets                                ---                  ---
2.2    Proceeds from the disposal of:
       (a) entities                                                  ---                  ---
       (b) tenements                                                 ---                  ---
       (c) property, plant and equipment                             ---                  ---
       (d) investments                                               ---                  ---
       (e) other non-current assets                                  ---                  ---
2.3    Cash flows from loans to other entities                      (80)                 (80)
2.4    Dividends received (see note 3)                               ---                  ---
2.5    Other (provide details if material)                           35                   68
2.6    Net cash from / (used in) investing                         (1,630)              (4,690)
       activities


3.     Cash flows from financing activities
3.1    Proceeds from issues of equity securities
       (excluding convertible debt securities)                       ---                12,800
3.2    Proceeds from issue of convertible debt                       ---                  ---
       securities
3.3    Proceeds from exercise of options                             ---                  ---
3.4    Transaction costs related to issues of equity                 ---                 (324)
       securities or convertible debt securities
3.5    Proceeds from borrowings                                      ---                  ---
3.6    Repayment of borrowings                                       ---                  ---
3.7    Transaction costs related to loans and                        ---                  ---
       borrowings
3.8    Dividends paid                                                ---                  ---
3.9    Other (provide details if material)                           ---                  ---
3.10   Net cash from / (used in) financing                           ---                12,476
       activities

Consolidated statement of cash flows                                      Current quarter               Year to date
                                                                               $A’000                    (9 months)
                                                                                                           $A’000
4.       Net increase / (decrease) in cash and
         cash equivalents for the period
4.1      Cash and cash equivalents at beginning of                               5,220                       1,395
         period
4.2      Net cash from / (used in) operating                                    (2,336)                     (7,910)
         activities (item 1.9 above)
4.3      Net cash from / (used in) investing activities                         (1,630)                     (4,690)
         (item 2.6 above)
4.4      Net cash from / (used in) financing activities                             ---                      12,476
         (item 3.10 above)
4.5      Effect of movement in exchange rates on                                  (56)                        (73)
         cash held
4.6      Cash and cash equivalents at end of                                      1,198                       1,198
         period


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                                                             1,198                       1,395
5.2      Call deposits                                                              ---                         ---
5.3      Bank overdrafts                                                            ---                         ---
5.4      Other (provide details)                                                    ---                         ---
5.5      Cash and cash equivalents at end of                                       1,198                       1,395
         quarter (should equal item 4.6 above)


6.       Payments to related parties of the entity and their                                Current quarter
         associates                                                                             $A'000
6.1      Aggregate amount of payments to related parties and their                                186
         associates included in item 1
6.2      Aggregate amount of payments to related parties and their                                ---
         associates included in item 2

Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of,
and an explanation for, such payments

7.       Financing facilities                                          Total facility     Amount drawn at
         Note: the term “facility’ includes all forms of financing   amount at quarter     quarter end
         arrangements available to the entity.                              end               $A’000
 
                                                                           $A’000
                                                                                              
         Add notes as necessary for an understanding of the
         sources of finance available to the entity.    
                 
7.1      Loan facilities                                                     5,000              5,000
7.2      Credit standby arrangements                                          ---                ---
7.3      Other (please specify)                                               ---                ---
7.4      Total financing facilities                                          5,000              5,000


7.5      Unused financing facilities available at quarter end                                              ---
7.6      Include in the box below a description of each facility above, including the lender, interest
         rate, maturity date and whether it is secured or unsecured. If any additional financing
         facilities have been entered into or are proposed to be entered into after quarter end,
         include a note providing details of those facilities as well.

Convertible Loan

On 25 January 2019, Orion Minerals Limited (Orion or Company) announced a $3.6M loan facility with Tembo
Capital Mining Fund II LP (Tembo) (Loan Facility). The key terms of the Loan Facility are:

 •   Loan Facility Amount: Up to $3.6M;
 •   Interest: Capitalised at 12% per annum accrued daily on the amount drawn down;
 •   Repayment: Tembo may elect for repayment of the balance of the Loan Facility (including capitalised
     interest and fees) (Outstanding Amount) to be satisfied by the issue of fully paid ordinary shares
     (Shares) by the Company to Tembo at a deemed issue price of 2.6 cents per Share, subject to receipt of
     Shareholder approval (if applicable). The Outstanding Amount must be repaid by 25 June 2020, or if
     Tembo elects to receive Shares in repayment of the Outstanding Amount in lieu of payment in cash, the
     date on which the Shares are to be issued to Tembo (or such later date as may be agreed between
     Tembo and Orion);
 •   Establishment fee:
      o Cash - capitalised 5% of the Loan Facility Amount and capitalised 4% of the Outstanding Amount as
           of 24 January 2020, payable on the Repayment date; and
      o Options - 11M unlisted Orion options, exercisable at a price of 3.0 cents per option, expiring on 17
           June 2024.
 •   Security: Loan Facility is unsecured.

At Quarter end, the balance of the Loan Facility was $4.45M (including capitalised interest and fees).

AASMF Loan

On 2 November 2015, Repli Trading No 27 (Pty) Ltd (Repli) and Anglo American sefa Mining Fund (AASMF)
entered into a loan agreement for the further exploration and development of the Copperton Project. Under the
terms of the loan, on 1 August 2017, AASMF advanced ZAR14.25M to Repli. The key terms of the agreement
are as follows:

 •   Loan amount: ZAR14.25M (~$1.40M);
 •   Interest: Prime lending rate in South Africa;
 •   Repayment: Repayable on the earlier of 3 years from the date of the advance (1 August 2020) or on the
     date which Repli raises any additional finance for the further development of the Copperton Project; and
 •   Security: 29.17% of the shares held in Repli by the Agama group (a wholly owned subsidiary of the
     Company), have been pledged as security to AASMF for the performance of Repli's obligations in terms
     of the loan.

At Quarter end, the balance of the loan was $1.69M (including capitalised interest).
For further information in relation to the Convertible Loan and the AASMF Loan, refer to the Company’s Interim
Financial Report for period ended 31 December 2019.

    8.      Estimated cash available for future operating activities                                  $A’000
    8.1     Net cash from / (used in) operating activities (Item 1.9)                                 (2,336)
    8.2     Capitalised exploration & evaluation (Item 2.1(d))                                        (1,585)
    8.3     Total relevant outgoings (Item 8.1 + Item 8.2)                                            (3,921)
    8.4     Cash and cash equivalents at quarter end (Item 4.6)                                        1,198
    8.5     Unused finance facilities available at quarter end (Item 7.5)                               ---
    8.6     Total available funding (Item 8.4 + Item 8.5)                                              1,198
    8.7     Estimated quarters of funding available (Item 8.6 divided by                                0.3
            Item 8.3)
    8.8     If Item 8.7 is less than 2 quarters, please provide answers to the following questions:

            1.      Does the entity expect that it will continue to have the current level of net operating
                    cash flows for the time being and, if not, why not?

            Answer: As announced to the ASX on 24 March 2020, due to the impacts of COVID-19, the
                    Company has implemented significant cost savings and asset preservation
                    initiatives across its business and anticipates lower total relevant outgoings for the
                    upcoming Quarter.

            2.      Has the entity taken any steps, or does it propose to take any steps, to raise further
                    cash to fund its operations and, if so, what are those steps and how likely does it
                    believe that they will be successful?

            Answer: As demonstrated over recent years, the Company has been successful in funding
                    its operations through a combination of equity and debt instruments, primarily with
                    the support of its major shareholders. Consistent with this approach, the Directors
                    consider that there are reasonable grounds to believe that the Company will be able
                    to fund its ongoing operations using similar funding alternatives.

            3.      Does the entity expect to be able to continue its operations and to meet its business
                    objectives and, if so, on what basis?

            Answer: On the basis of previously having been successful in undertaking funding initiatives
                    as set out in Item 8.8(2) and the implementation of significant cost saving initiatives
                    as set out in Item 8.8(1), the Company expects to continue its scaled down
                    operations and meet its business objectives as set out in its March 2020 Quarterly
                    Activities Report.


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.


Date:  30 April 2020


Authorised by: Board of Directors

Notes

1.      This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the
        entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An
        entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is
        encouraged to do so.
2.      If this quarterly cash flow 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 cash flow 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.
4.      If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”.
        If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the
        (name of board committee – eg Audit and Risk Committee)”. If it has been authorised for release to the market by a
        disclosure committee, you can insert here: “By the Disclosure Committee”.
5.      If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as
        complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and
        Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial
        records of the entity have been properly maintained, that this report complies with the appropriate accounting standards
        and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a
        sound system of risk management and internal control which is operating effectively.


ENQUIRIES

 Investors                                             Media                                                 JSE Sponsor
 Errol Smart – Managing Director & CEO                 Nicholas Read                                         Rick Irving
 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: rick@merchantec.co.za


Date: 30-04-2020 09:39:00
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