PERTH (miningweekly.com) – Base metals developer Orion Minerals has raised A$6.2-million in a strongly supported share placement to advance its Prieska copper/zinc project, in South Africa.

The company on Friday announced a two tranche share placement to sophisticated and professional investors, comprising 365-million shares at a price of 1.7c each.

The first tranche will consist of 346-million shares and will be issued under the company’s existing placement capacity, to raise an initial A$5.9-million. The second tranche of 19-million shares, which will be issued to Tembo Capital Mining Fund and its affiliated entities, will raise the remaining A$300 000, subject to shareholder approval.

“We are really pleased with the strong level of support received from both existing and new investors as part of this capital raising, including our long-term cornerstone shareholder Tembo Capital, which has once again shown its commitment to bringing the Prieska mine back into production,” said Orion chairperson Denis Waddell.

In addition to the placement, Tembo Capital has also confirmed its continued support of Orion through subscribing A$2.1-million worth of shares, at an issue price of 1.7c a share, subject to shareholder and Foreign Investment Review Board approval.

Orion in May this year agreed to a A$1-million unsecured convertible loan facility with Tembo Capital, which would be automatically offset against the amount to be paid by Tembo Capital for shares in Orion under any capital raising undertaken by the company before the end of October this year.

Given that Tembo Capital’s subscription exceeds the outstanding amount for the convertible loan facility, the loan facility will be considered repaid in full.

Waddell on Friday said that the strong response to the capital raise reflected both the strong improvement in the copper and zinc prices, and a growing awareness among investors of how shallow the global development pipeline is for both metals.

“There are very few fully permitted, development-ready assets anywhere in the world capable of producing high-quality copper and zinc concentrate over a ten-year-plus mine life.

“Prieska is one of the few assets globally that ticks all of these boxes, plus it includes a fully developed underground mine and surface infrastructure that previously underpinned one of the most successful base metal mines in the world in the 1970s and 1980s.

“This raising puts us in a strong position moving into the back-end of this year as we progress funding discussions and move to the final stage of the Macquarie-led partnering process. We are confident that positive outcomes on any of these fronts will see this world-class asset begin to move rapidly towards a final investment decision.”

Orion earlier this week received a key water licence for the Prieska project, removing the last regulatory hurdle to allow project construction.