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ORION MINERALS LIMITED - Short-Form: Annual Report for the Year Ended 30 June 2020
2020/09/22 10:46:00Download PDF Stock report
Short-Form: Annual Report for the Year Ended 30 June 2020
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”)
SHORT-FORM: ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
Shareholders are advised that Orion has today published its Annual Report for the year ended 30 June 2020.
Copies thereof are available on the Company's website, www.orionminerals.com.au and at
https://senspdf.jse.co.za/documents/2020/jse/isse/orne/ye20.pdf.
HIGHLIGHTS:
• Updated mine Bankable Feasibility Study (BFS) for the Prieska Copper-Zinc Project in South Africa (Prieska
Project) completed in May 2020, with the study delivering numerous improvements on the previous June
2019 study;
• Key outcomes of the updated BFS included a 43% increase in undiscounted pre-tax free cash-flows to
AUD1.6 billion, a 36% increase in NPV (8% discount) to AUD779 million, an increase in mine life to 12 years
and a reduced capital payback period;
• Prieska Project fully permitted following the grant of the Prieska Copper Zinc Mine (PCZM) (formerly Repli
Trading No 27 (Pty) Ltd) Mining Right in August 2019, the grant of the Vardocube Mining Right and the PCZM
Water Use Licence in August 2020;
• Completion of Black Economic Empowerment (BEE) ownership restructure to achieve full compliance with
the objectives of South Africa’s Mining Charter 2018;
• Rapid and effective response to the COVID-19 pandemic, with appropriate lockdown and work protocols
implemented, non-essential activities curtailed and significant cost reductions across the business;
• Successful AUD9.5 million capital raising completed in December 2019, to support ongoing optimisation
studies and operational readiness activities at Prieska;
• A further AUD6.2 million raised subsequent to the end of the reporting period to progress final permitting at
Prieska and advance key funding and partnering negotiations; and
• Major shareholder, Tembo Capital, advanced a AUD2.0 million loan and subsequent to the end of the
reporting period, confirming its continued support by converting the balance of the loan to Shares, enabling
Orion to repay the loan in full (subject to shareholder and Foreign Investment Review Board approvals).
COMMENTARY:
During the reporting period, Orion completed an updated BFS (refer SENS release 26 May 2020) for the
development of the Prieska Project, located in the Northern Cape region of South Africa, confirming the Project’s
potential to underpin a significant near-term, low-cost, copper and zinc development, with exceptional
opportunities for future growth. The updated BFS was completed to the highest possible level of detail and
quality, and the end result reflects substantial improvements over the June 2019 BFS. These improvements include
increased free cash-flow, net present value, mine life and total metal production.
This is an exceptional achievement and attained while adhering to the highest standards of health, safety,
environmental preservation and corporate governance and while successfully managing the effects that the
COVID-19 pandemic has had on the Company’s business.
With the updated BFS now complete, Orion has commenced discussions with potential Project development
partners and financiers, received the remaining regulatory approvals required and the Project is now ‘shovel-
ready’.
Orion is targeting a final investment decision for the Project as soon as these financing negotiations have been
concluded. Orion intends to fund the Prieska Project development through a combination of debt and equity
and is progressing discussions with both potential debt and equity providers. The Company has appointed
Macquarie Capital to assist in evaluating equity funding alternatives.
While these negotiations are underway, the Orion team is continuing to progress project execution planning,
contracting activities and working towards building an owner’s team for the construction phase.
The near mine and regional exploration strategy and programs for the Areachap belt were updated to ensure
the project development pipeline was in line and complementary to the anticipated Prieska Project
development milestones.
Orion’s main activity is exploration, evaluation and development of base metals, gold and PGE projects in South
Africa and Australia and as such it does not have a source of income, rather it is currently reliant on equity raisings
and/or debt to fund its activities. During the financial year, the Company raised AUD12.8 million before costs to
fund exploration and development of its projects, primarily in South Africa. Net cash used in operating activities
and investing activities totalled AUD13.83 million (2019: AUD18.78 million) and included payments for exploration
and evaluation of AUD9.81million (2019: AUD15.06 million) principally related to the development of the Prieska
Project and exploration within Orion’s Areachap Projects, South Africa.
In addition, the following information is provided in accordance with paragraph 3.46 of the JSE Listings
Requirements:
• Operating loss increased by 73% to AUD18.65 million (30 Jun 2019: AUD10.75 million);
• Basic loss per share increased by 25% to AUD0.66 cents (30 Jun 2019: loss of AUD0.53 cents); and
• Headline loss per share increased by 25% to AUD0.66 cents (30 Jun 2019: loss of AUD0.53 cents).
SHORT-FORM ANNOUNCEMENT:
This short-form announcement is the responsibility of the directors and is only a summary of the information in the
full announcement.
Any investment decisions by investors and/or shareholders should be based on a consideration of the full
announcement as a whole and investors and shareholders are encouraged to review the full announcement,
which is available as detailed herein. Copies of the full announcement may also be requested from the
Company via email at info@orionminerals.com.au or from the sponsor at sponsorteam@merchantec.co.za, at
no charge.
For and on behalf of the Board.
Errol Smart
Managing Director and CEO
22 September 2020
ENQUIRIES
Investors Media JSE Sponsor
Errol Smart – Managing Director & Nicholas Read Monique Martinez
CEO
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@merchantec.co.za
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).
Date: 22-09-2020 10:46:00
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