Much excitement at Orion Minerals

Orion Minerals has a market cap of around R1.2 billion and kept the SENS system rather busy on Monday. The company announced two term sheets and the availability of an investor presentation.

Prieska Project term sheets

Orion has entered into non-binding term sheets for a $87 million funding package related to the Prieska Copper-Zinc Mine. The package comprises of an $80 million precious metal stream and a AUD10 million funding arrangement for each production and underground mine dewatering. Yes, these elements are denominated in different currencies.

The counterparty is Triple Flag Precious Metals, a Canadian streaming and royalty finance company. This is an entirely different type of streaming to your Netflix account! In these structures, the deal is that Orion needs to deliver future gold and silver by-product production against the funding and will receive 10% of the spot price at the time of delivery.

Orion hopes to achieve binding agreements by the third quarter of this year. One of the conditions is that the AUD10 million funding will only be advanced if Orion secures another AUD20 million in funding for mine dewatering.

If this goes ahead, Orion will have funding to complete the Feasibility Study for early mining at Prieska and commence mine dewatering and development.

Interestingly, the potential deal also includes funding from Triple Flag of $55,000 per annum for community social funding projects over the life of the Prieska Copper-Zinc Mine.

Battery refining facility

Orion has signed a term sheet with Stratega Metals, which provides Orion with exclusivity to use Stratega’s refining technology to test concentrates from the Jacomynspan Nickel-PGE Project in the Northern Cape. The goal here is to produce “value-added metal products” which trade at a premium to the spot metal prices. These “battery precursor products” effectively take the metals a step closer to being used in batteries, by producing battery metal salts and fine carbonyl powders.

The deal gets even more interesting, as Stratega holds an exclusive licensing agreement to use TCM Research’s suite of proprietary technologies for base metal refining in the Northern Cape. Orion has the exclusive right to enter into an earn-in agreement for a 75% interest in Strategy by funding construction of a demonstration-scale refinery.

Although there’s a long way to go from a technical perspective, it’s exciting to see these types of projects in our country. The battery materials sector is growing quickly as the world looks to reduce its reliance on fossil fuels.

Investor presentation

With so much exciting news to share with the market, I’m not surprised that Orion has released a detailed investor presentation. If you find this company interesting and you would like to learn more, you’ll find it here.

Orion’s stock is fairly illiquid and has traded nearly 33% lower in the past year. After a strong rally in January, the stock has given up those gains and is flat year-to-date.