Orion to acquire controlling interest in the Okiep Copper Project

Orion Minerals has advised that it has taken another key step in its strategy to become a leading diversified international base metals producer after it and all the relevant parties, other than the Industrial Development Corporation of South Africa Ltd (IDC) (which is in the process of finalising internal approval), have signed the agreements which Orion will acquire the controlling interest in the Okiep Copper Project (OCP), located approximately 570km north of Cape Town in the Northern Cape Province of South Africa.

As set out in the announcements by Orion on 2 February 2021 and 2 August 2021, Orion exercised a restructured option to directly acquire the mineral rights (Mineral Rights), mineral data, rehabilitation guarantees, any specified contracts and any other assets identified by Orion (Sale Assets) held by Southern African Tantalum Mining (Pty) Ltd (SAFTA), Nababeep Copper Company (Pty) Ltd (NCC) and Bulletrap Copper Co (Pty) Ltd (BCC) (collectively the Target Entities), rather than acquire the shares in the Target Entities themselves (Okiep Transaction).

The Sale Assets will be acquired by two Orion subsidiary companies, namely, New Okiep Exploration Company (Pty) Ltd (initially 100% Orion-owned) (New Okiep Exploration) and New Okiep Mining Company (Pty) Ltd (initially 56.25% owned by Orion and 43.75% owned by the IDC) (New Okiep Mining) (collectively the Purchasers).

For various reasons, including the nature and timing of certain regulatory processes and approvals required for the transfer of the Sale Assets to the Purchasers, the parties to the Okiep Transaction agreements, other than IDC in respect of the SAFTA, have signed the addenda to amend the Okiep Transaction agreements (Addenda). The nature and purpose of the Addenda is to change, amongst other things, the timing and manner of implementing the Okiep Transactions.

The aggregate purchase consideration remaining payable by Orion and its subsidiary, Area Metals Holdings No 6 (Pty) Ltd (AMH6), for the Sale Assets is approximately ZAR59.60 million (approximately A$4.88 million, which purchase consideration will be adjusted in certain inflation-related respects (Purchase Consideration).

Whilst the Purchase Consideration will still be settled partly in cash and partly by way of Orion fully paid ordinary shares (Orion Shares), the transfer of the Sale Assets and the payment of the Purchase Consideration will now occur in various phases over a period of time (as and when the various Sale Assets are capable of transfer to the Purchasers) and the Orion Shares comprising the Purchase Consideration in respect of the first phase will be subject to certain restrictions on their disposal.

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