On 17 April 2024, Orion Minerals Ltd (ASX/JSE: ORN) advised 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.

Orion’s MD 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.”

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 data, rehabilitation guarantees, any specified contracts and any other assets identified by Orion  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, among 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 R59.60-million (approximately AUD4.88-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. Further, 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

Orion said, 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. The company adds that 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 the same.

Orion said it 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.

Source: Supplied by Orion Minerals