Orion Minerals Signs Definitive Agreements For $87m Funding Package To Advance Development Of The Prieska Copper-Zinc Mine
Orion Minerals Signs Definitive Agreements For $87m Funding Package To Advance Development Of The Prieska Copper-Zinc Mine. Orion Minerals Limited has announced that it has taken a furtherkey step towards the development of its flagship Prieska Copper-Zinc Mine (Prieska Project) in South Africa’s Northern Cape Province after signing definitive agreements with certain subsidiaries of Triple Flag Precious MetalsCorp. (TSX/NYSE: TFPM) (with its subsidiaries, Triple Flag) for an US$87 million1 secured funding package.
The funding package comprises two components, being a precious metals stream (Precious Metal Stream) andadditional early funding arrangement (Funding Arrangement). The Precious Metal Stream comprises US$80 million (~A$120 million) of funding to be drawn down in tranches,alongside other bank and/or third-party funding during mine development. Orion will also receive payments of10% of the value of delivered precious metal paid at spot LBMA pricing at the time of delivery. The proposed stream rates for gold and silver to be delivered under the stream agreement are 84% of “PayableGold” until 94.3k ounces of gold are delivered under the stream agreement, and 84% of “Payable Silver” until5,710k ounces of silver are delivered, with each stream rate reducing to 50% after the respective milestones.
The Precious Metal Stream is conditional on the mine development being fully funded, finalisation of anexecutable mine plan to Triple Flag’s satisfaction, South African regulatory approvals and fulfilment of conditions precedent standard for such arrangements. Orion and Triple Flag have also entered into a definitive agreement for an additional A$10 million Funding arrangement, with this funding to be made available to Orion to complete the Feasibility Study for the mining ofthe crown and remnant pillars down to the 385m level at PCZM (Early Mining Works BFS) and the simultaneous commissioning and operating of pumping and water treatment facilities, to allow dewatering of the PCZM mine at a rate ramping up to 500m3 per hour (Dewatering Project). The Early Mining Works BFS and the Dewatering Project are both key pre-development workstreams that arealready well advanced. The Dewatering Project is a critical long-lead item for the development of the Prieska Project, given that total dewatering of the mine to facilitate access to the main sulphide VMS orebody will take approximately three years.
The A$10 million Funding Arrangement draw-down is conditional on Orion securing an additional A$20 million funding to execute the agreed work focused on the Dewatering Project and the Early Mining Works BFS, as well as South African regulatory approvals and fulfilment of conditions precedent standard for such agreements. Triple Flag has confirmed to Orion that draw-down of the Industrial Development Corporation of South Africa Limited (IDC) Convertible Loan will be sufficient for this A$20 million funding condition to be satisfied. Draw-down of the A$10 million Funding Arrangement will be in tranches and will pro rata match the draw downrequests that Orion will make under the ZAR250 million IDC Convertible Loan.
Under each of the Precious Metal Stream and Funding Arrangement, Prieska Copper Zinc Mine (Pty) Ltd (PCZM)(a majority-owned subsidiary of Orion) and other obligors will agree to grant a first ranking security in favour of Triple Flag over certain assets and claims, with the security in respect of the Precious Metal Stream to be subordinated to Prieska Project financiers.
