ORION Minerals said today it had signed definitive agreements for the supply of $80m in funding for its Prieska Copper Zinc Mine (PCZM) in return for metals supply.
The deal was announced earlier this year by Orion in terms of which it will be able to fund the completion of a feasibility study into early mining at PCZM as well as start dewatering of deeper parts of the mine. In return it will supply 84% of all silver and gold produced from the mine to Triple Flag.
Triple Flag is a Toronto and New York listed streaming royalty company that operates mostly with mine owners in the Americas and New York. “This funding, provided by Triple Flag together with the IDC, is pivotal for Orion as we transition from being an exploration company to a mine developer,” said Orion CEO, Errol Smart.
As part of the overall financing of PCZM is a R250m funding package from the South African government-owned development lender, the Industrial Development Corporation. It previously announced this package in terms of which A$22m will be advanced to Orion as a senior secured, convertible debt facility. The loan and capitalised interest can be converted into Orion shares equal to a value of R1.2bn.
Orion said today that definitive agreements with the IDC for this funding of PCZM were “progressing well”.
The details of the streaming deal with Triple Flag is that each stream rate will reduce to 50% of overall metals production once certain milestones are met.
Orion will also receive payments of 10% of the delivered precious metal value at spot gold and silver prices at the time of delivery, it said.
An additional A$10m will be advanced against calculated payments equal to 0.8% of gross revenue from future mineral sales. The first draw-down of funds from the A$10m funding arrangement is expected in January.