ORION MINERALS LIMITED – ORN : Completion of BEE Restructure Share Issue marks another key step forward for Prieska Copper-Zinc Project

2019/09/12 09:21:00
SENS announcement for JSE listed company: ORN
                        

ORN : Completion of BEE Restructure Share Issue marks another key step forward for Prieska Copper-Zinc Project:
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’)

COMPLETION OF BEE RESTRUCTURE SHARE ISSUE MARKS ANOTHER KEY STEP FORWARD FOR
PRIESKA COPPER-ZINC PROJECT

Orion Minerals Limited (ASX/JSE: ORN) (Orion or the Company) is pleased to announce that
the major component of the Black Economic Empowerment (BEE) Restructure referred to in its
recent announcements has now been completed, marking another important step forward
for its flagship Prieska Copper-Zinc Project in South Africa.

The transactions announced today includes the issue of Orion shares to key existing BEE
shareholders at the asset level and a simultaneous transaction with new BEE partner
company Prieska Resources (Pty) Ltd (Prieska Resources).

The effect of the transactions is to implement an ownership structure whereby Orion holds a
70% interest in Repli Trading No. 27 (Pty) Ltd (Repli) (which owns the majority of the Prieska
Project), alongside Prieska Resources with 20% and the Prieska Community Trust and Prieska
Employees Trust with 5% each – a structure that complies fully with the objectives of South
Africa’s Mining Charter 3.

Commenting on the transactions, Orion’s Managing Director and CEO, Errol Smart, said:
‘We are pleased to have completed the major component of our BEE restructuring today.
This comes hard on the heels of the grant of the Mining Right last week and shows that we are
continuing to tick all of the key boxes required to move the Prieska Project forward as rapidly
as possible. The structure now in place, means that all of our key BEE partners are now fully
aligned with international investors as Orion shareholders, while also complying with the
objectives of Mining Charter 3.

Our original BEE shareholders in Repli are exchanging their shares at the asset level for Orion
shares. At the same time, we welcome the inclusion of top-class BEE partners Safika, KNI and
Black Star, who through Prieska Resources, will fund their proportionate share of Prieska
development costs through their 20% shareholding at the asset level. These BEE partners are
already Orion shareholders after participating in the $4 million share placement at $0.04 a
share completed earlier this year.’

Transaction Details

Shareholders are referred to the announcements by the Company on 16 April 2019 and 2
August 2019, regarding the restructure of its BEE participation in its subsidiaries, being Repli,
which owns the majority of the Prieska Copper-Zinc Project (Prieska Project) and which has
recently been granted a Mining Right (refer ASX release 3 September 2019), Vardocube (Pty)
Limited (Vardocube), Bartotrax (Pty) Limited (Bartotrax) and Rich Rewards Trading 437 (Pty)
Limited (Rich Rewards)(BEE Restructure).

In terms of the BEE Restructure, the existing BEE shareholders in Repli, Rich Rewards and
Bartotrax, being the Mosiapoa Family Trust (Mosiapoa) and Power Matla (Pty) Ltd (Power
Matla), have exchanged their shares in Repli, Rich Rewards and Bartotrax (as applicable) for
48.48M and 37.58 M Orion fully paid ordinary shares (Shares), respectively, at a deemed issue
price of $0.0314 per Share.

In a simultaneous transaction, new BEE shareholder, Prieska Resources, whose shareholders
recently subscribed for a ZAR20M placement of Orion Shares at ZAR0.40 per Share (~$2.0M at
$0.04) (refer ASX release 6 September 2019) has acquired an effective 20% interest in Repli for
a purchase consideration of ZAR142.78M (~$14.08M), with this acquisition being vendor
financed by Orion.

Prieska Resources is a BEE company whose shares are held by Black Star Minerals (Pty) Ltd
(17.31%), Kolobe Nala Investment Company (Pty) Ltd (37.97%) and Safika Resources (Pty) Ltd
(44.72%) (refer Figure1 and ASX release 2 August 2019).

The vendor finance advanced by Orion comprises two parts, namely:
– A secured loan for ZAR10.14M plus interest, at South African Prime Interest Rate,
repayable within 12 months after the project finance for the Prieska Project is closed; and
– Preference shares in Prieska Resources issued to Orion to the value of ZAR132.64M which
are redeemable by Prieska Resources at any time prior to the 8 th anniversary of their date
of issue at an IRR of 12% to Orion, failing which, any of the preference shares, held by
Orion, remaining after the 8th anniversary, will be automatically converted pro rata into
ordinary shares in Prieska Resources up to a maximum of 49% of the shares in Prieska
Resources or, subject to compliance with South African laws, an equivalent number of
shares directly in Repli.

Simultaneously with the acquisition by Prieska Resources, the Orion Siyathemba Community
Trust (Prieska Community Trust) and the Orion Siyathemba Employees Trust (Prieska
Employees Trust) have each acquired an effective 5% interest in Repli (refer Figure 1). While
this acquisition was for nominal consideration, in terms of the prevailing Mining Charter 3
legislation, Orion and Prieska Resources will be entitled to recover the costs incurred on
behalf of the two trusts in developing the Prieska Project from future project cash-flows.

Orion and Prieska Resources will both contribute on a pro-rata basis to the equity financing
costs of the Prieska Mine construction.

Figure 1: Repli group structure following BEE Restructure.

The BEE Restructure also involves a proposed exchange of shares by Mosiapoa and another
existing BEE shareholder, African Exploration and Mining Finance Corporation (SOC) Limited in
Vardocube, for Orion Shares. The completion of this component of the BEE Restructure
remains subject to the satisfaction of certain conditions precedent which are being
progressed. Once the conditions precedent have been satisfied, Orion will finalise the
implementation of this final component of the BEE Restructure shortly.

The Shares were issued pursuant to shareholder approval obtained at the Company’s general
meeting on 7 June 2019 and ASX waiver granted 11 September 2019.

Please find attached an Appendix 3B relating to today’s issue of the Shares to Mosiapoa and
Power Matla.

Errol Smart
Managing Director and CEO

ENQUIRIES
Investors Media JSE Sponsor
Errol Smart – Managing Nicholas Read Barnaby Hayward Rick Irving
Director
* 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).
Appendix 3B
New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B
New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and
documents given to ASX become ASX’s property and may be made public.
Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity
Orion Minerals Ltd

ABN
76 098 939 274

We (the entity) give ASX the following information.

Part 1 – All issues
You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to Fully paid ordinary shares.
be issued

2 Number of +securities issued or to 86,056,022
be issued (if known) or maximum
number which may be issued

3 Principal terms of the +securities Fully paid ordinary shares.
(e.g. if options, exercise price and
expiry date; if partly paid
+securities, the amount outstanding
and due dates for payment; if
+convertible securities, the
conversion price and dates for
conversion)

4 Do the +securities rank equally in Shares rank equally with all other fully paid
all respects from the +issue date ordinary shares on issue.
with an existing +class of quoted
+securities?

If the additional +securities do not
rank equally, please state:
– the date from which they do
– the extent to which they
participate for the next
dividend, (in the case of a trust,
distribution) or interest
payment
– the extent to which they do not
rank equally, other than in
relation to the next dividend,
distribution or interest payment

5 Issue price or consideration Deemed issue price of 3.14 cents per fully paid
ordinary share.
Issue of fully paid ordinary shares to existing
Black Economic Empowerment (BEE) Investors to
satisfy, in full, the repurchase of shares held by
existing BEE investors in Orion’s subsidiary entities,
Repli Trading No 27 (Pty) Ltd, Rich Rewards
Trading 437 (Pty) Ltd and Bartotrax (Pty) Ltd
(Subsidiaries).
The deemed issue price of 3.14 cents per fully
paid ordinary share is in consideration for the
price payable by the Company’s Subsidiaries to
the relevant Existing BEE Investor for the
repurchase of shares.

6 Purpose of the issue The fully paid ordinary shares were issued as
(If issued as consideration for the consideration for the repurchase by the
acquisition of assets, clearly Company’s subsidiaries Repli, Rich Rewards and
identify those assets) Bartotrax of shares held by the Existing BEE
Investors in those companies and as such, no
funds will be raised from the issue of the fully
paid ordinary shares.

6a Is the entity an +eligible entity that No.
has obtained security holder
approval under rule 7.1A?

If Yes, complete sections 6b – 6h
in relation to the +securities the
subject of this Appendix 3B, and
comply with section 6i

6b The date the security holder Not applicable.
resolution under rule 7.1A was
passed

6c Number of +securities issued Not applicable.
without security holder approval
under rule 7.1

6d Number of +securities issued with Not applicable.
security holder approval under rule
7.1A

6e Number of +securities issued with Not applicable.
security holder approval under rule
7.3, or another specific security
holder approval (specify date of
meeting)

6f Number of +securities issued under Not applicable.
an exception in rule 7.2

6g If +securities issued under rule Not applicable.
7.1A, was issue price at least 75%
of 15 day VWAP as calculated
under rule 7.1A.3? Include the
+issue date and both values.
Include the source of the VWAP
calculation.

6h If +securities were issued under Not applicable.
rule 7.1A for non-cash
consideration, state date on which
valuation of consideration was
released to ASX Market
Announcements

6i Calculate the entity’s remaining Rule 7.1 – 337,601,257.
issue capacity under rule 7.1 and
rule 7.1A – complete Annexure 1 Rule 7.1A – Not applicable.
and release to ASX Market
Announcements

7 +Issue dates 12 September 2019.
Note: The issue date may be prescribed by ASX
(refer to the definition of issue date in rule 19.12).
For example, the issue date for a pro rata
entitlement issue must comply with the applicable
timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

Number +Class

8 Number and +class
of all 2,250,675,046 Fully paid ordinary
+securities quoted on ASX shares
(including the +securities in section
2 if applicable)

Number +Class

9 Number and +class of all 222,307,679 Convertible notes.
+securities not quoted on ASX
100,466,749 Unlisted options exercisable at $0.05
(including the +securities in expiring 31 October 2019.
section 2 if applicable)
250,000 Unlisted options exercisable at $0.045
expiring 30 November 2019.

250,000 Unlisted options exercisable at $0.06
expiring 30 November 2019.

2,200,000 Unlisted options exercisable at $0.05
expiring 30 June 2020.

1,900,000 Unlisted options exercisable at $0.035
expiring 30 June 2020.

16,333,333 Unlisted options exercisable at $0.02
expiring 30 November 2020.

18,333,333 Unlisted options exercisable at $0.035
expiring 30 November 2020.

18,333,334 Unlisted options exercisable at $0.05
expiring 30 November 2020.

12,100,000 Unlisted options exercisable at $0.03
expiring 31 May 2022.

12,100,000 Unlisted options exercisable at $0.045
expiring 31 May 2022.

12,100,000 Unlisted options exercisable at $0.06
expiring 31 May 2022.

5,100,000 Unlisted options exercisable at $0.05
expiring 31 March 2023.

5,100,000 Unlisted options exercisable at $0.06
expiring 31 March 2023.

5,100,000 Unlisted options exercisable at $0.07
expiring 31 March 2023.

30,500,000 Unlisted options exercisable at $0.04
expiring 30 April 2024.

30,500,000 Unlisted options exercisable at $0.05
expiring 30 April 2024.

30,500,000 Unlisted options exercisable at $0.06
expiring 30 April 2024.

11,000,000 Unlisted options exercisable at $0.03
expiring 17 June 2024.

10 Dividend policy (in the case of a Not applicable.
trust, distribution policy) on the
increased capital (interests)

Part 2 – Pro rata issue
Questions 11 to 33 Not Applicable

Part 3 – Quotation of securities
You need only complete this section if you are applying for quotation of securities

+ See chapter 19 for defined terms.

04/03/2013
Appendix 3B
New issue announcement

34 Type of +securities
(tick one)
(a) +Securities described in Part 1

(b) All other +securities
Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee
incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)
Additional securities forming a new class of securities
Questions 35 to 37 – Not Applicable

Entities that have ticked box 34(b)
Questions 38 to 42 – Not Applicable
Quotation agreement
1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the
+ securities on any conditions it decides.
2 We warrant the following to ASX.
– The issue of the +securities to be quoted complies with the law and is not for an
illegal purpose.
– There is no reason why those +securities should not be granted +quotation.
– An offer of the +securities for sale within 12 months after their issue will not
require disclosure under section 707(3) or section 1012C(6) of the Corporations
Act.
Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

– Section 724 or section 1016E of the Corporations Act does not apply to any
applications received by us in relation to any +securities to be quoted and that no-
one has any right to return any +securities to be quoted under sections 737, 738 or
1016F of the Corporations Act at the time that we request that the +securities be
quoted.
– If we are a trust, we warrant that no person has the right to return the +securities to
be quoted under section 1019B of the Corporations Act at the time that we request
that the +securities be quoted.
3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action
or expense arising from or connected with any breach of the warranties in this agreement.
4 We give ASX the information and documents required by this form. If any information or
document is not available now, we will give it to ASX before +quotation of the +securities
begins. We acknowledge that ASX is relying on the information and documents. We
warrant that they are (will be) true and complete.

Sign here: Martin Bouwmeester
Company Secretary
Date: 12 September 2019

+ See chapter 19 for defined terms.

04/03/2013

Date: 12/09/2019 09:10:00
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