A N N U A L R E P O R T
Accelerating delivery,
unlocking value
2020 29
Cu
Copper
30
Zn
Zinc
28
Ni
Nickel
27
Co
Cobalt
PGE
PGE
79
Au
Gold
ABOUT THIS REPORT
This Annual Report is a summary of the
operations, activities and performance of
Orion Minerals Limited ABN 76 098 939 274
and its financial position for the year ended
30 June 2020.
In this report, unless otherwise stated,
references to Orion Minerals, Orion,
Company, we, us and our, refer to Orion
Minerals Limited.
Monetary amounts in this document are
reported in Australian dollars (AUD, $), unless
otherwise stated.
Forward-looking statements
This report may include forward-looking statements. Such forward-
looking statements:
• are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by Orion, are
inherently subject to significant technical, business, economic,
competitive, political and social uncertainties and contingencies;
• involve known and unknown risks and uncertainties that could
cause actual events or results to differ materially from estimated
or anticipated events or results reflected in such forward-looking
statements; and
• may include, among other things, statements regarding targets,
estimates and assumptions in respect of metal production and
prices, operating costs and results, capital expenditures, mineral
reserves and mineral resources and anticipated grades and
recovery rates, and are or may be based on assumptions and
estimates related to future technical, economic, market, political,
social and other conditions.
Orion disclaims any intent or obligation to update publicly any
forward-looking statements whether as a result of new information,
future events or results or otherwise.
The words ‘believe’, ‘expect’, ‘anticipate’, ‘indicate’, ‘contemplate’,
‘target’, ‘plan’, ‘intends’, ‘continue’, ‘budget’, ‘estimate’, ‘may’,
‘will’, ‘schedule’ and similar expressions identify forward-looking
statements.
All forward-looking statements made in this report are qualified by
the foregoing cautionary statements. Readers of this report are
cautioned that forward-looking statements are not guarantees of
future performance and are cautioned not to put undue reliance on
forward-looking statements due to the inherent uncertainty therein.
All information in respect of Exploration Results and other technical
information should be read in conjunction with Competent Person
Statements in this report (where applicable) and relevant ASX
announcements released by Orion.
To the maximum extent permitted by law, Orion and any of its related
bodies corporate and affiliates and their officers, employees, agents,
associates and advisers:
• disclaim any obligations or undertaking to release any updates or
revisions to the information to reflect any change in expectations
or assumptions;
• do not make any representation or warranty, express or implied,
as to the accuracy, reliability or completeness of the information
in this report, 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).
ORION MINERALS ANNUAL REPORT 2020
CONTENTS
Accelerating delivery,
unlocking value
About this report
Forward-looking statements
Section 1: CORPORATE PROFILE
Key achievements in 2020
Orion projects in South Africa and Australia
Strategy
Section 2: LEADERSHIP
Chairman and Managing Director/CEO Review
Board of directors
Senior management
Section 3: BUSINESS REVIEW
Safety, health and environment
Environmental management
Corporate social responsibility
Review of operations
South Africa
Overview of Areachap Belt Projects
Prieska Project
Exploration
Australia
Ore reserve and mineral resource statement
Corporate
Section 4: FINANCIAL STATEMENTS
Directors’ report
Auditor’s independence declaration
Consolidated statement of profit or loss and other
comprehensive income
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to financial statements
Directors’ declaration
Independent auditor’s report
Additional ASX information
2
3
4
6
8
9
11
11
12
14
14
22
34
41
47
52
70
71
72
73
74
75
111
112
116
1
ORION MINERALS ANNUAL REPORT 2020
SECTION
1
CORPORATE PROFILE
KEY ACHIEVEMENTS
IN 2020
Rapid and effective response to the COVID-19 pandemic,
with appropriate lockdown and work protocols implemented,
non-essential activities curtailed and significant cost reductions
across the business.
Updated mine Bankable Feasibility Study (BFS) for the
Prieska Copper-Zinc Project in South Africa completed in
May 2020, with the study delivering numerous improvements on
the previous June 2019 study.
Key outcomes of the updated BFS included a 43% increase in
undiscounted pre-tax free cash flows to AUD1.6 billion,
a 36% increase in NPV (8% discount) to AUD779 million, an
increase in mine life to 12 years and a reduced capital
payback period.
Prieska Project fully permitted following the grant of the
Prieska Copper Zinc Mine (PCZM) (formerly Repli) Mining Right
in August 2019 and the grant of the Vardocube Mining Right and
the PCZM Water Use Licence in August 2020.
Completion of Black Economic Empowerment (BEE)
ownership restructure to achieve full compliance with the
objectives of South Africa’s Mining Charter 2018.
Successful AUD9.5 million capital raising completed in
December 2019 to support ongoing optimisation studies and
operational readiness activities at Prieska.
A further AUD6.2 million raised subsequent to the end of
the reporting period to progress final permitting at Prieska
and advance key funding and partnering negotiations.
Major shareholder, Tembo Capital, advanced a AUD2.0 million
loan and subsequent to the end of the reporting period,
confirmed its continued support by converting the balance of
the loan to Shares, enabling Orion to repay the loan in full
(subject to shareholder and FIRB approvals).
VALUES
Prioritising employee
health and safety
Committed to community
engagement and
corporate social
responsibility
Promoting technology
advancement
Driving education and
skills development
Adopting a
pioneering spirit
2
ORION MINERALS ANNUAL REPORT 2020 CORPORATE PROFILE
ORION PROJECTS IN SOUTH AFRICA AND AUSTRALIA
Accelerating delivery,
unlocking value
PROJECT
LOCATIONS
GAMESBERG
BLACK MOUNTAIN
COPPERTON
3
Prieska Project, Northern CapeTotal Mineral Resource of30.49Mt @ 1.2% Cu and 3.7% ZnJohannesburg, GautengSOUTH AFRICAN OFFICES:Melbourne, VictoriaAUSTRALIA HEAD OFFICE:Western AustraliaFRASER RANGE PROJECT:SOUTH AFRICAAUSTRALIAORION MINERALS ANNUAL REPORT 2020 CORPORATE PROFILE
STRATEGY
BANKABLE
FULLY PERMITTED
READY TO BUILD
Orion Minerals is well on its way to
becoming a new-generation Australian-
South African mining company through
the development of its flagship Prieska
Copper-Zinc Project, located in South
Africa’s Northern Cape Province
(Prieska Project).
Based on a globally significant Volcanic Massive Sulphide (VMS)
deposit with a Foundation Phase delineated Mineral Resource
that will become a platform for further mining of deposit extensions
and the exploration and mine development of neighbouring
prospects (Foundation Phase). The initial 12-year life of mine
plan delivers an impressive 47% all-in-sustaining margin and is
underpinned by a robust mine plan delivering more payable metal in
differentiated high quality copper and zinc concentrates.
Capital payback period is less than two-and-a-half years from first
production and production start-up is targeted for 2024, market
conditions permitting.
Meanwhile, there is further scope to significantly extend the mine
of 30.49Mt at 1.2% Cu and 3.7% Zn, Prieska is slated for
life, given that the deposit remains open both at depth and along
development as an initial 12-year, 2.4Mtpa operation targeting
strike. Potential satellite discoveries both near-mine and within the
22ktpa Cu and 70ktpa Zn with globally competitive costs, strong
broader region provides the opportunity to potentially operate in
margins and financials.
this district for many decades to come.
An updated Bankable Feasibility Study (BFS), completed in May
2020, delivered a substantial increase in production, cash flow and
mine life for the Prieska Project.
Sustainable development goals have been planned at the
outset with strategies in place to increase the use of renewable
energy and reduce the carbon footprint. Water conservation and
recycling in the dry and arid conditions at the project has also
This fully permitted project is forecast to deliver AUD1.6 billion of
pre-tax free-cash-flow over the initial Foundation Phase and has
been maximised.
a pre-tax Net Present Value of AUD779 million (at an 8% discount
The business plan also provides a clear roadmap for progressive
rate).The Prieska Project aims to deliver sound commercial returns
4IR adoption, which should deliver high productivity and personnel
while also establishing mine infrastructure and operational capacity
well-being gains to our workforce.
4
ORION MINERALS ANNUAL REPORT 2020 CORPORATE PROFILE
STRATEGY continue d
ORION’S STRATEGY IS TO:
Accelerating delivery,
unlocking value
Focus on exploring
Target projects
and developing
capable of meeting
Concentrate on
fast-tracking the
Further evaluate
Continue exploration
recently discovered
of the Areachap
globally significant
growing demand for
development of the
near-mine targets,
Belt, using advanced
multi-commodity base
key industrial metals
Prieska Copper-
including immediate
metals deposits located
– such as copper,
Zinc Project, where
extensions of the
in outstanding mineral
zinc and nickel –
a positive updated
Deep Sulphide
belts and Tier-1 mining
which have strong
Bankable Feasibility
Resource at Prieska
districts such as the
market fundamentals
Study was completed
(28.73Mt at 1.2%
geological and
geophysical
techniques to
discover further
clusters of VMS
Areachap Province of
because of declining
in May 2020.
Cu and 3.8% Zn and
deposits, thereby
South Africa and the
global resource
Fraser Range Province
inventories, falling
of Australia.
grades at major mines
and lack of investment
in new mines.
near-mine targets
creating a sustainable
such as the recent
growth pipeline.
Ayoba discovery) to
extend the mine life
at Prieska.
ORION AT A GLANCE
• Flagship Prieska Copper-Zinc Project – accessing globally significant VMS deposit in Northern Cape Province, South Africa
• Bankable – updated BFS following successful optimisation & value engineering
• Foundation Phase Mineral Resource – 30.49Mt at 1.2% Cu and 3.7% Zn
• Development of an initial 12-year, 2.4Mtpa operation targeting production of 22ktpa copper and 70ktpa zinc at globally competitive
costs, strong margins and financials
• Fully permitted as of August 2020
• Ready to build – project financing and strategic partner discussions well advanced
• Sustainable development planned from the outset
• Increase use of renewable energy and reduce the carbon footprint
• Water conservation and recycling in the dry and arid conditions at the project maximised
• Progressive 4IR adoption – clear roadmap, should deliver high productivity and personnel well-being gains for workforce
• Economic upliftment – well placed to play key role in local economic recovery and community development post COVID-19
• Significant exploration pipeline in South Africa and Australia
• Multiple Cu-Zn-Ni-Co targets in the Northern Cape Province, South Africa
• IGO Limited Fraser Range, Western Australia joint venture - Key Ni-Cu targets directly along trend from recent Legend Mining discovery,
with air-core drilling underway ahead of planned diamond drilling
5
ORION MINERALS ANNUAL REPORT 2020 LEADERSHIP
CH AI R MAN AND MANAGING DIRECTO R/ CEO R EVIE W
Denis Waddell
Chairman
Errol Smart
Managing Director and Chief Executive Officer
It is our pleasure to
provide a review of
Orion’s achievements
during the 2020
financial year.
We are pleased to report on what
has been a demanding yet ver y
positive year for Orion. The significant
milestones achieved during the year
have positioned Orion to become a
successful diversified base metals
miner and explorer.
Looking back at the year in review, the most prominent achievement
for Orion Minerals was to significantly improve and complete an
updated BFS for our flagship Prieska Copper-Zinc Project (Prieska
Project or Project).
The updated BFS was completed to the highest possible level
of detail and quality, and the end result reflects substantial
improvements over the June 2019 BFS. These improvements
include increased free cash-flow, net present value, mine life and total
metal production. We consider this an outstanding result by every
measure. We are pleased to report that there is significant scope
to further extend the mine life beyond the current 12 years, as the
deposit remains open both at depth and along strike. There are also
The updated BFS has also enhanced the Project’s environmental,
social, and governance outcomes. By implementing best practices
consistent with sustainable development goals from the outset, we
aim to increase the use of renewable energy, minimise our carbon
footprint and maximise water conservation.
The other standout development during the year was the
completion of permitting for the Prieska Project with the grant of the
final Mining Right for the Vardocube portion of the Resource. This
followed the grant of the Mining Right for the PCZM (formerly Repli)
Portion in August 2019, and the issue of the Water Use Licence in
August 2020.
These permitting milestones, which have been achieved in
unprecedented rapid advance, make the Prieska Project one of
the world’s few bankable, fully permitted base metal projects,
ready for development.
In just over three years, since acquiring the Project on 29 March
2017, we have drilled out a world-class Volcanic Massive Sulphide
(VMS) Resource, completed a BFS and now completed all required
permitting, to have a ‘shovel-ready’ project that stands to soon
transform us into a profitable base metals producer. Importantly,
we have also met our Mining Charter 2018 BEE obligations with
a very strong BEE partnership now in place, which includes the
establishment of the Employees and Community Trusts for the
Prieska Project.
This is an exceptional achievement by our hard-working and
dedicated team, attained while adhering to the highest standards of
health, safety, environmental preservation and corporate governance
and while successfully managing the effects that the COVID-19
pandemic has had on our business.
broader discovery opportunities to be exploited in the area, so the
The COVID-19 pandemic was an unexpected and unwelcome visitor
potential exists to operate there for many decades to come.
that has cast a dark shadow over markets, economies, businesses
6
ORION MINERALS ANNUAL REPORT 2020 Accelerating delivery,
unlocking value
and communities worldwide and did not spare Orion. However, the
raised in the December 2019 Quarter by way of share placement,
Company was able to move quickly and efficiently to respond to
a further $6.2 million raised through a share placement announced
COVID-19, implementing measures to minimise the potential impact
in August 2020 and a loan of $2.0 million advanced by our largest
of the virus.
Measures, including work-from-home protocols (where it was
possible) and a mandatory Code of Practice, setting out clear health
and safety requirements for all of our staff and contractors, were put
in place in March 2020.
shareholder, Tembo Capital, which will be converted to shares
(subject to shareholder and FIRB approval).
We would like to sincerely thank all investors who participated in
these raisings, including our long-term cornerstone shareholder,
Tembo Capital. Tembo Capital’s unyielding support over the past
We also implemented a range of cost saving and asset preservation
three years for our vision to bring the world-class Prieska mine
initiatives across the business, including a revised interim
back into production has been instrumental in helping us get to
remuneration structure for Directors and Executives that significantly
this position.
reduced the Company’s cash outlay.
Alongside these measures, we also made the difficult decision to
stand down a number of our employees and contractors in light of
the disruption to planned activities caused by COVID-19 lockdowns.
We recognise that this has had a profound impact on these people
and their families and we are hopeful that we are able to re-employ
many of these previous team members as soon as possible.
Now that we have completed a high-quality BFS and have all
permitting in place, the Prieska Project is poised to play a major
role in the post-COVID-19 economic recovery of the Northern Cape
region of South Africa, where it promises to deliver low-cost base
metals production over a long mine life. Moreover, we are fortunate
to have an enviable portfolio of some of the most prospective base
metals tenements on the continent under our stewardship, and
We are especially proud of the way that Orion as a company,
these will ensure a full project development pipeline to support the
our communities and our on ground team responded to these
Prieska Project.
challenges. None of our contractors or staff have contracted the
disease and we have assisted our communities to successfully
manage their pandemic response.
Orion continues to set new benchmarks in South Africa for
community engagement by a junior exploration and development
company. We maintain strong communication channels with our
communities via an active Social Engagement Forum, as well as
holding regular public meetings in the areas surrounding Prieska and
supporting a wide range of community initiatives.
The Prieska Project itself has already seen over $36 million invested
to reach this stage, with a further investment of over $432 million
anticipated over the next three years as we construct the mine, that
is projected to deliver more than $3.2 billion of product sales over its
initial 12 year foundation phase.
We thank our dedicated and hard-working team members for
their significant contribution and also thank their families for their
ongoing support.
We are proud of our role within the local communities and will continue
to seek opportunities to help the local area prosper and thrive.
Despite the COVID-19 disruption and the challenges presented by
lockdown and travel restrictions, Orion has managed to maintain the
We also thank our BEE partners, our host communities, the
Siyathemba Municipality, the Siyathemba Joint Corporate Social
Investment Forum, the Orion Siyathemba Stakeholder Engagement
Forum, consultants, advisors, contractors, suppliers, industry
momentum and continue with efforts to secure the debt and equity
associations and regulators for their contribution and assistance
funding for the Prieska Project.
during the year. We also thank our loyal shareholders for their
As part of the funding process, Orion has engaged Macquarie
continuing support.
Capital to run a process to secure a suitable equity partner to finance
We are tremendously pleased with the progress achieved during the
the Prieska Project. We believe that engaging the right partner at
Prieska could help us deliver an integrated funding and development
package that will minimise dilution for shareholders, while retaining
significant exposure to the substantial cash flows that will be
generated by a long-life base metal operation.
We are confident of delivering a positive outcome on a financing and
development package in the near future, allowing us to advance the
world-class Prieska Project towards a final investment decision.
past year and are enlivened by the prospects of imminent delivery of
shareholder and stakeholder rewards.
The strength of our position is reflected by the strong support for
the capital raisings undertaken by the Company, with $9.5 million
Denis Waddell
Chairman
Errol Smart
Managing Director and
Chief Executive Officer
7
ORION MINERALS ANNUAL REPORT 2020
Leadership
BOARD OF
DIRECTORS
Denis Waddell
Chairman
Errol Smart
Managing Director and Chief Executive Officer
Tom Borman
Non-Executive Director
Godfrey Gomwe
Non-Executive Director
Alexander Haller
Non-Executive Director
Mark Palmer
Non-Executive Director
8
Denis Waddell
Chairman
Denis is a Chartered Accountant with extensive experience in the
management of exploration and mining companies. Denis founded
Tanami Gold NL in 1994 and was involved with the Company as
Managing Director and then Chairman and Non-Executive Director
until 2012. Prior to founding Tanami Gold NL, Denis was the Finance
Director of the Metana Minerals NL group. During the past 36 years,
Denis has gained considerable experience in corporate finance and
operations management of exploration and mining companies.
Errol Smart
Managing Director and Chief Executive Officer
Errol is a geologist, registered for JORC purposes. Mr Smart has
27 years of industry experience across all aspects of exploration,
mine development and operations with experience in precious and
base metals. Mr Smart has held positions in Anglogold, Cluff Mining,
Metallon Gold, Clarity Minerals LionGold Corporation and African
Stellar Holdings. Mr Smart’s senior executive roles have been on
several boards of companies listed on both the TSX and ASX and
currently serves as a Director on the Board of the Mineral Council of
South Africa.
Tom Borman
Non-Executive Director
Tom is a highly-experienced global mining executive who served
more than 11 years working for the BHP Billiton Group in various
senior managerial roles, including that of chief financial officer. He
also held senior roles in strategy and business development, and
served as the project manager for the merger integration transaction
between BHP Limited and Billiton. After leaving BHP Billiton in
2006, Tom joined Warrior Coal Investments, where he was part of
the executive team which established the portfolio of assets which
became the Optimum Group of companies.
Godfrey Gomwe
Non-Executive Director
Godfrey is the former chief executive officer of Anglo American plc’s
Thermal Coal business, where his responsibilities included oversight
over the company’s manganese interests in the joint venture with
BHP. Until August 2012, Godfrey was an executive director of Anglo
American South Africa, prior to which he held the positions finance
director and chief operating officer. He was also chairman and chief
executive of Anglo American Zimbabwe Limited and served on a
number of Anglo American executive committees and operating
boards, including Kumba Iron Ore, Anglo American Platinum,
Highveld Steel & Vanadium and Mondi South Africa.
Alexander Haller
Non-Executive Director
Alexander is a partner of Zachary Capital Management, providing
advisory services to several private investment companies, including
Silja Investment Ltd, focusing on principal investment activities. From
2001 to 2007 Alexander worked in the corporate finance division at
JP Morgan Chase & Co. in the USA, as an advisor on mergers and
acquisitions, and financing, in both equity and debt capital markets.
Mark Palmer
Non-Executive Director
Mark has 13 years of experience working with entities in Australia,
including eight years with Dominion Mining. He previously worked
with NM Rothschild & Sons Limited for the London mining project
as part of the finance team where he was responsible for assessing
mining projects globally. He later moved to the investment banking
team at UBS, where his focus was global mergers and acquisitions,
and equity and debt financing. He also ran the EMEA mining team at
UBS, later joining Tembo Capital in 2015 as investment director.
ORION MINERALS ANNUAL REPORT 2020 Leadership
SENIOR
MANAGEMENT
Errol Smart
Managing Director and Chief Executive Officer
Walter Shamu
Chief Operating Officer
Martin Bouwmeester
Chief Financial Officer and Company Secretary
Michelle Jenkins
Executive: Finance and Administration
Louw van Schalkwyk
Executive: Exploration
Errol Smart
Managing Director and Chief Executive Officer
Errol is a geologist, registered for JORC purposes. He has some
25 years of industry experience across all aspects of exploration,
mine development and operation, with a key focus on gold and base
metals throughout Africa and in Australia. Errol has held positions in
African Stellar, LionGold Corporation, Clarity Minerals, Metallon Gold,
Cluff Mining and AngloGold.
Walter Shamu
Chief Operating Officer
Walter is a mining engineer with a BEng (Mining Engineering) and
a Masters in Engineering (Rock Mechanics) from Curtin University
as well as an LLB (Law) from Macquarie University in Australia. He
spent 12 years in the Australasian mining industry with Henry Walker
Eltin, Western Mining and Gold Fields before moving to South Africa,
where he has held technical and corporate roles with Gold Fields,
ERG and Taurus Gold on exploration projects, mine development
and mining operations throughout Africa.
Martin Bouwmeester
Chief Financial Officer and Company Secretary
Martin is an FCPA highly experienced in exploration, mine
development and operations. He was previously the chief financial
officer, business development manager and company secretary of
Perseverance Corporation Limited. Martin was a key member of the
team that successfully completed feasibility studies, funding and
development of the Fosterville Gold Mine in Australia.
Michelle Jenkins
Executive: Finance and Administration
Michelle is both a geologist and a chartered accountant with over
20 years’ experience in exploration and mining. She holds an
Honours Degree in Geology from the University of the Witwatersrand
and BSc Hons in Accounting Science from the University of South
Africa. Michelle has substantial experience working as a geologist
prior to joining KPMG’s mining group as a chartered accountant.
She was also the chief financial officer at Taurus Gold and held the
role of chief financial officer with several exploration and mining
companies throughout Africa. She is currently an Independent Non-
Executive Director of Kumba Iron Ore. She was previously a director
within the Clarity Capital Group and an executive director of Pangea
Exploration. Michelle offers a wealth of knowledge in resource risk
management and mitigation as well as strategic leadership and has
been involved in operating resources ventures.
Louw van Schalkwyk
Executive: Exploration
Louw holds a BSc Geology Honours degree from the University of
Stellenbosch. He started his career as a geologist with Gold Fields
of South Africa, then worked as an exploration consultant for Anglo
American. He served as technical director on the boards of two junior
exploration companies before joining Vedanta Zinc International.
Louw specialises in structural and exploration geology and was part
of the team that discovered the 60 Mt Gamsberg East Zinc Deposit
in 2005, which is one of the highlights of his career. Other notable
achievements include the discovery and drill out of the 250,000oz
Byumba Gold deposit in Rwanda in 2008.
9
ORION MINERALS ANNUAL REPORT 2020 Nelson Mosiapoa
Group Corporate Social Responsibility Adviser
Nelson studied chemical engineering at the Cape Peninsula
University of Technology. As an advanced policy scholar of science
and technology, he served on the policy unit of the governing
party in South Africa prior to the first democratic elections. His
professional career started at Sasol Petroleum as a gasification
process controller and then a learner official at Anglo American/De
Beers. He is also the founder and trustee of the Mosiapoa Family
Trust, a private and investment equity company in the resources
sector with assets featured on the JSE.
Marcus Birch
Commercial and Business Support Manager
Marcus holds a BSc Honours Geology degree from the University
of Exeter and a BCom from the University of South Africa. He has
over 25 years’ experience in the mining and minerals exploration
industry, initially as a geologist in the South African gold mining
sector. Marcus subsequently moved into the field of procurement
and supply chain with Anglo Gold Ashanti, where he led a team of
commodity specialists. During the last decade, Marcus has held
senior general management positions in the junior exploration
sector, with Clarity Minerals and High Power Exploration,
responsible for the establishment and growth of minerals service
companies and the management of the logistical aspect of
exploration projects across Africa, Australia and South America.
Pieter Roux
Group Financial Controller
Pieter holds a BCom (Management Accounting) and DipICIMA.
He has 17 years’ experience in finance team leadership and
management in mining and exploration in Cote d’ivoire, Mali,
Burkina Faso, Zimbabwe, Zambia, Namibia and South Africa.
Pieter has implemented and operated real-time web-based financial
control systems for companies across the African continent. He has
also developed various funding models, applied for fund raising,
budgeting and operational control purposes. Most recently, Pieter
has worked with Taurus Gold as group financial controller, providing
leadership within the finance team and management reporting
for the Taurus Gold Group. Prior to that he was the finance unit
manager for Evraz Highveld & Vanadium’s Mapochs Mine and
group management accountant for Clarity Capital Group.
Leadership
SENIOR
MANAGEMENT
Nelson Mosiapoa
Group Corporate Social Responsibility Advisor
Marcus Birch
Commercial and Business Support Manager
Pieter Roux
Group Financial Controller
10
ORION MINERALS ANNUAL REPORT 2020
BUSINESS REVIEW
SAFETY, HEALTH AND ENVIRONMENT
HEALTH AND
SAFETY
Orio n remain s co mmi tted to en sur ing
a hig h st andar d o f saf ety an d h ealth
manageme nt in all wo rkpl aces.
Within South Africa, a risk-adjusted, phased lifting of lockdown
work restrictions commenced in May 2020, with partial levels of
restrictions expected to continue as long as the risks of COVID-19
remain present.
Despite ongoing efforts to remain injury-free, one lost-time injury
was recorded during the financial year across the group. A
colleague at the Prieska Project sustained a laceration to a finger
while manually carrying a drill rod for use in an underground
The Company responded proactively to managing the hazards
associated with the COVID-19 pandemic by implementing a Code
of Practice and Standard Operating Procedures across
all operations.
roadway. We have since taken the risk-mitigating step to institute
No cases of affliction by COVID-19 have been reported among any
mechanical pipe-handling as a measure to reduce manual
handling of drill rods. This is in keeping with the Company’s
ongoing drive to adopt new and 4th Industrial Revolution
technologies, particularly those that will allow us to remove people
from potentially hazardous environments.
Company employees or contractors as of year end.
Environmental Management
Orion recognises that its environmental performance is a critical
component of its success. The Company strives to always deliver
During the financial year, approximately 54,000 hours were worked
the highest level of environmental compliance, with a commitment
on South African projects sites. This shows a significant reduction
to monitoring and managing the environmental impacts of its
from the 205,000 hours reported last year and reflects the rapid
activities during and beyond the life of its operations.
transition from project site-centred tasks to design, engineering and
the permitting work effort to update the Prieska Project BFS and
advance it to the point of being fully-permitted and build ready.
The past year has born testament to this commitment, as zero
reportable environmental incidents occurred and all environmental
inspections and audits were carried out according to the applicable
When the COVID-19 pandemic struck, the Company pre-emptively
law and operating practices across the Company’s projects, with
implemented work-from-home measures from 13 March 2020
no major non-conformances being identified.
across all sites. We then went into full lockdown in line with the
South African government’s statutory directives from 26 March
2020. COVID-19 thus also contributed to a reduction in work hours
recorded on project sites.
Hours worked at the Areachap Projects (South Africa).
Category of Work
Exploration
Mine Re-Entry
Contractors
Total
FY 2020 (Hours)
39,443
11,513
3,310
54,266
The Lost-Time Injury Frequency Rate (LTIFR) per 200,000 hours
worked was 3.71 for the financial year.
The Environmental Authorisation for the Vardocube Mining Right
portion of the Prieska Project was granted during the year,
completing the full complement of environmental licencing required
for the Prieska Project to commence construction.
An Electromagnetic Capability (EMC) Committee was formed during
the year, mandated to secure the approval required for the mine to
operate within the Square Kilometre Array Radio Telescope Project
(SKA) area, where the Prieska Project is located. The South African
Astronomy Management Authority (AMA) had already provided its
approval of Orion’s proposed EMC Plan for the Project in 2019.
The EMC Committee consists of representatives from Orion,
AMA and Orion’s technical and compliance advisors, Power Plant
Electrical Technologies and Interference Testing Consultants
Only essential work required to safeguard Company
respectively. The EMC Committee will oversee the processes that
property and workforce health and safety was undertaken at
ensure that electromagnetic emission levels from mining operations
administration and project sites during the initial phase of the
remain below the limits set by AMA authorities and that the required
statutory lockdown period.
permits are issued as part of the Project’s commissioning process.
11
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
SAFETY, HEALTH AND ENVIRONMENT co nti nued
Community, Stakeholder Engagement & Social
Responsibility
The increasing importance of renewable energy and the growing
demand for green energy minerals like copper and zinc, all of
which are abundant in South Africa’s Northern Cape province,
suggest that this part of the world can become a globally significant
contributor to the green economy. Developing the region’s natural
resources will translate into social and economic upliftment for
local communities. Orion believes that the Prieska Project can be a
a variety of events and by hosting public ‘town hall’ meetings
featuring Company leaders in all of the neighbouring towns of
Prieska, Marydale, Niekerkshoop, Vanwyksvlei and Copperton.
The Company is intent on preparing communities local to the
Prieska Project to be able to take full advantage of the benefits of
the planned mine construction, commissioning and operational
activities. In support of this, various community social investment
initiatives have been implemented, including those focused on:
catalyst for this improvement, especially considering the recovery
• Familiarisation with the mining industry:
needed as a result of the economic impact of COVID-19.
In 2019, the Orion Siyathemba Stakeholder Engagement Forum
(OSSEF) was formed to ensure communities that are local to the
Prieska Project stay informed and continue to play a significant part
of the project’s development. The OSSEF is constituted of
20 members representing local community interest groups, various
local government departments, Company employees, shareholders
and management.
The OSSEF met periodically throughout the year, with remote
meetings taking place when in-person attendance was prevented
by COVID-19 restrictions. The forum continues to be an effective
means of informing and engaging with local communities on a
variety of matters related to project development and will be integral
to ensuring civic harmony during the planned construction and
commissioning phases of the Project.
Eighty-four high school graduates from Vanwyksvlei attended
a one-week course that earned them credits towards industry-
recognised, mining-related qualifications. The Company began
providing the course two years ago, and this most recent
group brings the total number of people from the surrounding
communities to have successfully completed the course to 350.
• Promotion and supporting small businesses:
The Company collaborated with the Department of Economic
Development and Tourism (DEDAT) in Kimberley, the Northern Cape
Rural Technical and Vocational Education and Training (TVET) College
and the Centre for Enterprise Rapid Incubation (CFE) to offer a variety
of workshops aimed at promoting and educating Small Medium and
Micro Enterprises (SMMEs) in the Siyathemba Municipality.
• Collaboration of local business enterprises to assist in
improving the welfare of local communities:
In addition to these and similar formal forums, the Company
The Company facilitated the establishment of the Siyathemba Joint
engaged with the communities surrounding the Project through
Corporate Social Investment (CSI) Forum.
12
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
SAFETY, HEALTH AND ENVIRONMENT co nti nued
The aim of the CSI Forum is to rally different entities to collaborate
The agreement sets out water tariffs and specific scopes of work
on initiatives aimed at improving the welfare of the local community.
for water infrastructure upgrades.
It comprises representation from the major private and state
enterprises that are active in the municipal area, including Orion,
Mulilo Prieska Solar Community Trust, Copperton Wind Farm, Garob
Wind Farm, Sonnedix, GWK (an agricultural cooperative), Alkantpan
Test Range and South African National Roads Agency (SANRAL).
The CSI Forum had a meaningful role to play as part of the COVID-19
response effort, presenting an ideal platform for local enterprises to
share information and resources and to coordinate efforts.
• Community health and well-being:
The Company was a significant sponsor of the first Siyathemba
Community Annual Sports Day, held in Prieska. This event
promotes healthy recreational activity particularly among the
In July 2020, the Siyathemba Municipality and District Municipal
Planning Tribunal approved the zoning of all land to be used for
the Prieska Project for designation as Special Zone (Extractive
Industry). This provides permission for the land to be used for
mining purposes.
Orion has made progress in its application for proposed
residential development in the town of Prieska, in accordance with
the Spatial Planning and Land Use Management Act (SPLUMA).
This development will eventually provide the Prieska Project with
the option to establish mine personnel accommodation within the
Prieska town precinct, some 60km from the Project site.
youth and attracted nearly 600 residents from the Siyathemba
The Company plans to construct and commission mine
community. It featured 16 teams participating in soccer and
accommodation at the project site, then gradually migrate
netball matches on the day. For 50 families that had been
accommodation facilities to Prieska. By doing this, the mining
identified by the Department of Social Development and local
operations will establish infrastructure that will remain useful
Hospice as being in need, the event was also an opportunity
beyond the life of the mining operation.
During the year, the SPLUMA process has required the
engagement of environmental consultants to commence the
environmental impact assessment and commissioning of
geotechnical and bulk services engineering studies. In addition,
the Municipality and the Company reached agreement on the
conceptual layout for the proposed residential development,
paving the way for the start of the public participation process
required under SPLUMA protocols. The conceptual layout also
makes provision for third party private development of modern
mixed density housing.
to receive food hampers. In a separate initiative, Bicycles for
Humanity Western Australia donated 420 used bicycles to Orion
with the shared objective of establishing a Bicycle Empowerment
Centre (BEC) in Siyathemba. The BEC will offer a micro enterprise
opportunity through the provision of bicycle mobility for targeted
sections of the community, at the same time promoting health and
an active lifestyle.
• Company’s direct response to the COVID-19 pandemic:
The impact of the statutory lockdown was devastating for many
parts of the community. The Company facilitated the provision
of food parcels to destitute families and hand sanitisers to old
age homes. The Company also empowered a local entrepreneur
in Marydale to establish a small mask-making business by
providing seed capital for the purchase of material. To alleviate the
pressures on families with young children, the Company arranged
for the printing and distribution of children’s playbooks which were
accompanied by crayons donated by another participant from the
CSI Forum, the Mulilo Prieska Solar Community Trust.
Engagement with Local Authorities
The Company has had a collaboration Memorandum of
Understanding (MoU) in place with the Siyathemba Municipality
since October 2017. This MoU has facilitated the progress of
important aspects that require local government involvement to
prepare for the Prieska Project construction.
During the year, the Company and the Municipality formulated
the terms to guide collaboration on water supply infrastructure
upgrades and supply to the proposed mining operations. A water
supply agreement has been drafted and tabled with the Municipal
Council for assent.
13
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
REVIEW OF OPERATIONS
Overview of Areachap Belt Projects Progress
In June 2020, the Company received confirmation from the South
Orion believes in the vast untapped potential of the Northern Cape
Province of South Africa to become a globally important base
metals producing district. By applying our modern exploration
and mine development techniques, we aim to help unlock this
latent value for all stakeholders. Not only will development of
our projects fast-track Orion’s growth strategy thereby delivering
shareholder value, it will make a notable contribution to the
broader economy, and sustainable socio-economic development
in our neighbouring communities.
Prieska Copper-Zinc Project
Project Overview
During the reporting period, Orion updated the BFS (refer ASX
release 26 May 2020) for the Prieska Project development,
African Companies and Intellectual Property Commission, that
Orion’s application to change the name of Repli Trading No 27
(Pty) Ltd (Repli) to Prieska Copper Zinc Mine (Pty) Ltd (PCZM)
was successful. PCZM (a 70%-owned subsidiary of Orion) and
its subsidiary company Vardocube (Pty) Ltd (Vardocube), hold the
mining and prospecting rights which cover the Prieska Project area.
Prieska Project Updated Bankable Feasibility Study
Feasibility Study Outcomes
The updated BFS (BFS-20) was completed in May 2020 for the
proposed new 2.4Mtpa1 copper and zinc brownfields Prieska
Project. It reflects numerous improvements on the previous study,
(BFS-19) which was completed in June 2019 (refer ASX release
26 June 2019), including 2:
confirming the Project’s potential to underpin a significant near-
• 43% increase in undiscounted free cashflows to AUD1.6 billion,
term, low-cost, copper and zinc development, with exceptional
pre-tax (AUD1.2 billion post-tax);
opportunities for future growth.
With the updated BFS now complete, Orion has commenced
discussions with potential project development partners and
financiers, received the remaining regulatory approvals required and
the Project is now ‘shovel-ready’.
Orion is targeting a final investment decision for the Project as soon
as these financing negotiations have been concluded. Orion intends
• 36% increase in NPV (at an 8% discount rate) to AUD779 million,
pre-tax (AUD552 million post-tax);
• 6-month reduction in the capital payback period to 2.4 years;
• 6% decrease in all-in-sustaining costs to USD3,531/t
(USD1.60/lb) of copper equivalent metal sold;
• 3% increase in all-in-sustaining margin increasing to 47%;
to fund the Prieska Project development through a combination of
• 5% increase in pre-tax IRR to 39%; and 9% increase in peak
debt and equity and is progressing discussions with both potential
funding requirements to AUD413 million to cater for the
debt and equity providers. The Company has appointed Macquarie
operational improvements.
Capital to assist in evaluating equity funding alternatives.
While these negotiations are underway, the Orion team is
continuing to progress project execution planning, contracting
activities and working towards building an Owner’s Team for the
construction phase.
1 This production target was first reported in ASX release of 26 May 2020:
“Updated Feasibility Study Delivers…” available to the public on
http://www.orionminerals.com.au/investors/asx-jse-announcements/.
All material assumptions underpinning the production target detailed in the
initial report continue to apply and have not materially changed.
The near-mine and regional exploration strategy and programs for
the Areachap belt were updated to ensure the project development
pipeline was in line and complementary to the anticipated Prieska
Project development milestones.
2 The forecast financial information provided here was first reported in ASX
release of 26 May 2020: “Updated Feasibility Study Delivers…” available
to the public on http://www.orionminerals.com.au/investors/asx-jse-
announcements/. All material assumptions underpinning the forecast
financial information derived from a production target detailed in the initial
report continue to apply and have not materially changed.
14
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
REVIEW OF OPERATIONS co ntinue d
Compared to the June 2019 BFS, the updated mining plan results show most metrics are improved upon, as shown in Table 2.
Table 2: Valuation result comparison between the BFS-20 (updated BFS) and the BFS-19 (June 2019 BFS).
Business Case Comparison
BFS-20
BFS-19
Variance
Valuation Results
NPV (pre-tax)
NPV (post-tax)
Undiscounted Free Cash Flow (pre-tax)
Undiscounted Free Cash Flow (post-tax)
IRR (pre-tax)
IRR (post-tax)
Undiscounted Payback (from first prod)
Peak Funding (Max. Neg. Cash Flow)
Time to Reach Peak Funding
Project Capital (Incl. Contingency)
NPV/Max. Exposure
AiSC/Cu eq Tonne
AiSC/Zinc eq Tonne
Zinc revenue contribution
Sustaining Capital (LoM)
First Concentrate Produced
Life of Mine
Copper Price
Zinc Price
Forex
UoM
AUDM
AUDM
AUDM
AUDM
%
%
years
AUDM
months
AUDM
ratio
USD/lb
USD/lb
%
AUDM
months
years
USD/lb
USD/lb
USD:AUD
AUD
779
552
1,608
1,166
39%
33%
2.4
413
33
373
1.3
1.60
0.38
41%
137
33
11.5
3.03
1.06
1.64
AUD
574
408
1,127
819
38%
33%
2.9
378
32
400
1.1
1.71
0.49
46%
83
25
9.7
3.10
1.25
1.45
Value
204
144
482
347
2%
1%
-0.5
35
1
-27
0.3
-0.11
-0.12
-5%
54
8
1.8
-0.1
-0.2
0.2
%Var
36%
35%
43%
42%
5%
2%
-16%
9%
3%
-7%
24%
-6%
-24%
-11%
64%
32%
19%
-2%
-15%
13%
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ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
REVIEW OF OPERATIONS co ntinued
The key updates in the refined BFS-20 mining plan include:
• Incorporation of a water treatment plant to produce agricultural-quality water and reduce the pumping timeline for the shaft
dewatering from 14 months to 10 months. This follows the successful conclusion of the water treatment pilot trials that began at the
beginning of the reporting period;
• The implementation of value engineered modifications to the processing plant layout to incorporate semi-autogenous grinding
mills, resulting in cost savings by removing the need for multi-stage crushing. Ore processing value engineering work was carried out
throughout the year under the supervision of South African-based engineering firm METC Engineering; and
• Refinement of the mine schedule to further prioritise extraction of the higher grade and higher confidence Mineral Resource
categories in the early stages of the Foundation Phase. This follows some of the learnings coming out of the Whittle Enterprise
Optimisation process that remained incomplete by year end but showed promise.
Mine Design and Production Schedule
The much-improved mining production profile, with the expected copper and zinc head grades is illustrated in Figure 1. Steady-state
production is planned at an average of 200,000 tonnes per month. The average underground head grades over the life of mine are
1.03% Cu and 3.33% Zn.
Figure 1: Underground production profile.
Figure 1: Underground production profile
Tonnes
250,000
200,000
150,000
100,000
50,000
0
Grade %
5.0
1 5 9
3
1
7
1
1
2
5
2
9
2
3
3
7
3
1
4
5
4
9
4
3
5
7
5
1
6
5
6
9
6
3
7
7
7
1
8
5
8
9
8
3
9
7
9
1
0
1
5
0
1
9
0
1
3
1
1
7
1
1
1
2
1
5
2
1
9
2
1
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
ROM tonnes mined
Cu grade
Zn grade
Months
Figure 2: Comparison of the mining production profiles for the updated BFS-20 and the BFS-19, illustrating the deferred build-up to
steady-state production.
Figure 2: Comparison of the mining production profiles for the updated BFS and the BFS-19, illustrating the deferred build-up to steady-state production
Tonnes
250,000
200,000
150,000
100,000
50,000
0
Tonnage mined
1 6
1
1
6
1
1
2
6
2
1
3
6
3
1
4
6
4
1
5
6
5
1
6
6
6
1
7
6
7
1
8
6
8
1
9
6
9
1
0
1
6
0
1
1
1
1
6
1
1
1
2
1
6
2
1
1
3
1
6
3
1
1
4
1
6
4
1
1
5
1
4
5
1
6
5
1
BFS – 20 mined
BFS – 19 mined
Months
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ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
REVIEW OF OPERATIONS co ntinue d
A general long section view of the mine plan is shown in Figure 3. The grey zones depict those areas previously mined. The 957 level,
located some 900m below the surface, is the main haulage level for the planned new Deeps Mine that will be operated more efficiently,
with not only the benefit of hindsight, but also improved technology and mining practices.
Figure 3: Underground mine layout.
The mining methods to be employed remain unchanged compared to those stated in BFS-19. Tunnel development remaining from the previous
mining operations allows for early access to underground production mining areas. It is planned that a combination of Long-hole Open Stoping
with Fill (LHOSF) and Drift and Fill (D&F) mining methods will be used, supported with paste back-fill. Some low-profile, D&F mining is planned
from year five of operation, along with open-pit mining of the near-surface +105 Level Supergene Deposit for the last two years.
Open-pit mining takes place at the end of the underground operation and contributes a further 1.1 million tonnes of material with average
head grades of 1.85% Cu and 2.44% Zn.
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ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
REVIEW OF OPERATIONS co ntinued
Mine Dewatering and Water Treatment
The underground workings are currently filled with water to a depth of 310m below surface and contain a volume of 8.6 million cubic metres
of water (Figure 4). Dewatering of the workings will be done by means of a planned pumping system, to be installed in the Hutchings Shaft.
Water will be pumped into a 1 million cubic metre volume dewatering dam on surface. From here, mechanical evaporators and a reverse
osmosis (RO) water treatment plant will be used to dispose of and treat the water for discharge into the environment.
Figure 4: Views showing the remnant pillars and the accumulated water level.
The incorporation of the RO water treatment plant to produce
agricultural-quality water is the improvement made from the
original BFS-19. As stated earlier, introducing the RO treatment
plant reduces the dewatering pumping timeline from a duration
of 14 months to 10 months, by providing a secondary means of
discharging the water pumped from underground. The design and
cost of the RO plant is based on site-based trials that took place
over 6 months during which water was pumped from various
levels in the shaft down to 480m below the water level.
The variability of the water quality was tested by taking 14 water
samples from various areas of the underground mine in order to
design the requisite water treatment flexibility into the RO process
and operating costs.
Value Engineering Outcomes
Value engineering modifications were made to the design of
the processing plant to incorporate semi-autogenous grinding
(SAG) mills, in which achieves cost savings by removing the need
for multi-stage crushing and conveying previously required for
primary and secondary ball milling design. Revisions to the plant
footprint and building arrangements also resulted in a reduction in
capital costs.
18
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
REVIEW OF OPERATIONS co ntinue d
The general surface, shaft area and plant layout are shown below in Figure 5.
Figure 5: General surface, shaft and plant layout.
In addition to refining the mine schedule to prioritise the
extraction of higher grade, higher confidence Mineral
Resource categories, a detailed drilling program was
formulated to upgrade those Inferred Deep Sulphide
Mineral Resources included in the mine plan to
Indicated Mineral Resources. The drilling plan has been
independently peer reviewed.
The drilling program will consist of 120 drill holes totalling
22,406m and has been scheduled to match the mining
schedule. The Inferred Mineral Resources included in the
mine plan total 6.1Mt at 1.24% Cu and 4.52% Zn and
make up 36% of the total Resources in the mine plan.
As previously reported, the total Indicated and Inferred
Deep Sulphide Resource is 28.7Mt at 1.16% Cu and
3.77% Zn (Indicated Resources of 18.5Mt at 1.17%
Cu and 3.60% Zn and Inferred Resources of 10.2Mt at
1.14% Cu and 4.08% Zn) 3.
3 Mineral Resource reported in ASX release of 18 December 2018: “Landmark Resource Upgrade Sets Strong Foundation” available to the public on
http://www.orionminerals.com.au/investors/asx-jse-announcements. Competent Person: Orion’s Mineral Resource: Mr. Sean Duggan. Orion confirms it is not
aware of any new information or data that materially affects the information included above. The company confirms that all material assumptions and technical
parameters underpinning the resource estimates in the ASX release of 18 December 2018 continue to apply and have not materially changed. Orion confirms
that the form and context in which the Competent Person’s findings are presented here have not been materially modified.
19
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
REVIEW OF OPERATIONS co ntinued
Figure 6 shows the 120 drill holes planned to upgrade Inferred Mineral Resources to an Indicated level of confidence.
Figure 6: Oblique view of the Deep Sulphide Resource showing the planned drill layout on the preliminary mine schedule.
Further improvements to the updated BFS business plan that are
• The potential extraction of mineralised structural pillars remaining
targeted for possible implementation during commissioning and
from historical mining activities;
operation include:
• Improvements in plant and concentrate-grade recoveries to
match historical plant performance, which exceed the results
achieved during the bench-scale test work that was conducted
as part of the BFS and assumed in the study projections;
• Likely mine life extension opportunities based on high-grade
drilling intersections and geophysical targets on the periphery of
the Prieska deposit;
• Ongoing delineation of significant new satellite deposits within
an emerging Volcanogenic Massive Sulphide (VMS) camp, as
evidenced by the early success of the limited amount of regional
exploration completed to date; and
• Implementation of the results of the ongoing mine-to-market
optimisation studies to refine mine development and early
production plans.
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ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
REVIEW OF OPERATIONS co ntinue d
Post-Feasibility Study Activities
EPCM Contracting – Orion will use an Engineering, Procurement
and Construction Management (EPCM) construction strategy for
the Project, with an Owner’s Team providing oversight of the EPCM
contractor. Work progressed during the latter part of the reporting
period to compile an EPCM Enquiry Document. Subsequent to
year-end, inquiry documents were sent out to 12 potential bidders.
It is intended that the process will culminate in Orion selecting a
preferred contractor by early CY2021.
Ore Processing Plant Operations – Discussions continued
during the year with Minerals Operations Executive (Pty) Ltd
(Minopex), who were selected as a preferred business partner
to manage and operate the ore processing plant. In addition to
the Operating Agreement which has outlined the costing metrics
(included in the updated BFS), talks are advancing with Minopex
around the approach to adopt for operational readiness and the
commissioning stage of ore processing operations.
Underground Mining Contract – The company signed
a Memorandum of Understanding with Byrnecut Offshore
(Proprietary) Limited to investigate commercial collaboration for
the underground mining activities. These discussions were put
on hold while the Company focused on completing the updated
BFS. In parallel with its fundraising efforts, the Company has
re-commenced an evaluation of the most suitable approach for
conducting underground mining operations with the expectation
that it will settle on an approach concurrent with the fund raising
efforts that are under way.
Mining Right Applications – The Environmental Approval for the
Vardocube portion of the Prieska Resource was granted in March
2020 and the associated Mining Right was granted in August 2020.
subject to expected funding and investment approvals. The
40MVA application for the permanent power supply required for
the operating phase of the Project was approved by Eskom, the
national utility company. Eskom is now required to issue a Budget
Quote Letter which formally outlines the Connection Fee payable
by Orion. The 40MVA power is required near the end of the
construction phase as the mine winders and process plant mills
come online.
Water Supply Agreement – With the Siyathemba Municipality’s
approval of the key terms for a water supply agreement in place,
it is expected that a binding formal agreement will be executed
during the second half of CY2020.
Collaboration on Renewable Energy Supply Option – Orion
and juwi Renewable Energies RSA (Pty) Ltd (juwi) intend to
collaborate on establishing a hybrid wind and solar renewable
energy facility that will supply 52% of the Prieska Project’s power
requirements. The collaboration Memorandum of Understanding
entered into between the Company and juwi was extended to
October 2020. The extension gives the parties an opportunity
to continue to explore funding options that prove most
advantageous to the Project as it seeks to establish and operate
the renewable energy plant.
Whittle Enterprise Optimisation – Whittle Consulting (Pty)
Limited (Whittle Consulting) was engaged to undertake mine-to-
market optimisation of the BFS business plan (refer ASX release
30 July 2019). Whittle Consulting use their proprietary enterprise
optimisation process (WEO), which involves the detailed and
accurate mapping and linking of the whole value chain, from the
Mineral Resource inventory to the marketed product. Thereafter,
critical value drivers along the value chain are simultaneously
varied, using specialised computer algorithms, until optimal
Water Use Licence – The PCZM Water Use Licence was also
permutations are identified.
approved in August 2020. This was the final regulatory permit
that was needed following the grant of the PCZM Mining Right in
August 2019, for work on site to proceed, subject to the Orion
Board’s investment decision.
Optimisation scenarios were carried out on the selected mine
plan with the expectation of incorporating positive results into
the updated BFS Report. However, due to the variable shape
and thickness of the deposit, together with the requirement to
Power Supply Infrastructure – Design work was completed on the
assign different mining costs (which had to be calculated from
15MVA power infrastructure for the Cuprum Sub-station feeder bay,
first principles) to the various mining areas, it was decided to build
which is the temporary power supply required during the construction
in additional time to fully optimise the mine plan and schedule,
phase of the project. The design work is needed to begin the
making this work ongoing. New results are expected during
construction of the feeder bay during the December 2020 Quarter,
November 2020.
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ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
REVIEW OF OPERATIONS co ntinued
Near-Mine Exploration
Near-mine exploration covers the area within a 20km radius of the Prieska Project. Executed prospecting rights and mining rights held by
Bartotrax (Pty) Ltd, Vardocube (Pty) Ltd and PCZM (formerly Repli) cover 14,679ha and a further 53,938ha is under application by Orion
through Orion Exploration No. 5 (Figure 7).
Figure 7: Map showing the areas covered by executed prospecting and mining rights and new prospecting right applications.
Rights:
1. PCZM (Pty) Ltd
2. Vardocube (Pty) Ltd
3. Bartotrax (Pty) Ltd
4. Orion Exploration
No. 5 (Pty) Ltd
Legend
Roads
Rights Executed
Prospecting Right Application
Granted for the Mining Right
Mineral occurrences and deposits
Cu – Zn
Ni – Cu – Co – PGE –Au
Geology
Karoo Supergroup
Areachap Group
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ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
REVIEW OF OPERATIONS co ntinue d
Figure 8: Channel 25 SkyTEMTM image showing current prospects and the prospective VMS horizon on the near-mine area.
23
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
REVIEW OF OPERATIONS co ntinued
VMS deposits commonly occur in clusters or camps. The Prieska
Figure 9: Cross-section summarising drill intersections at Ayoba.
Project is no exception and the Company is aiming to develop a
number of prospects with proven mineralisation on the near-mine
tenements, as well as exploring the prospective horizon or
paleo-seafloor position along strike from known copper-zinc
and nickel-copper deposits as defined by field mapping and
aeromagnetic data. In addition, the Company conducted an
airborne EM survey in 2018 which defined a number of untested
conductors that will be followed-up with ground EM and drilling
(Figure 8). Desktop studies and field work were carried out during
the financial year to prioritise the prospects for follow-up.
Annex Copper Deposit
Annex, located approximately 6km south of the Prieska Project,
was discovered by Anglovaal in 1969. Mineralisation was identified
over a strike length of 1,000m and drilled down to 550m below
surface. There is significant exploration potential with the deposit
remaining open down-plunge.
Ayoba Target
Orion discovered a zinc-copper-bearing massive sulphide body
at the Ayoba Prospect at the end of 2018 using ground EM and
diamond drilling. The massive sulphide intersection was made
5.3km south-southwest of Orion’s Hutchings Shaft on the Prieska
Project and 1.6km west and along strike of the known copper
mineralisation at Annex.
The discovery drill hole intersected 9.5m of massive sulphides from
654.0m grading 0.63% Cu and 0.93% Zn, including 1.50m from
654.50m at 0.89% Cu and 4.98% Zn (Figures 9 and 10) (refer ASX
release 16 January 2019). A deflection, OAXD002-D1, intersected
0.88m at 0.89% Cu and 11.2% Zn on the same stratigraphic
horizon as the high-grade zone intersected in the mother hole.
These high-grade intersections confirm a zonation from low to high-
grade zinc along strike to the west of Annex, opening up exciting
exploration potential. Interpretation of aeromagnetic data shows
that the mineralisation occurs in a fold structure. Future exploration
will include further ground EM surveys to fully cover the fold and
diamond drilling to test for the continuation and thickening of the
high-grade copper-zinc intersection.
Ayoba represents the first new VMS discovery in the Areachap Belt
in over 36 years. Further exploration at Ayoba will target the high-
grade zinc zone in the upper part of the mineralisation.
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Figure 10: Geological map interpreted from aeromagnetic data showing the Annex and Ayoba prospects with the modelled ground EM
conductors shown at Ayoba.
The Kielder Deposits
The three Kielder zinc-copper deposits, PK1, PK3 and PK6
and the PK7 copper-nickel gossan were discovered in 1976
by Newmont S.A. (Figure 8). Due to poor outcrop and complex
geology, the structural relationship between the deposits was
never understood and Orion stands to benefit from the use of new
improved geophysical techniques.
Historical diamond drill results highlight the potential of these
prospects, confirming the presence of thick, shallow massive
mineralisation to occur in a synformal structure. SkyTEMTM
conductors occur on both limbs (Figure 11). The northern
conductor is modelled as a sub-horizontal, 160m long and
28m wide plate. Historical drill holes intersected the north-
western margin of the plate with good results.
A 202m long and 20m wide conductor interpreted to occur
on the southern limb of the fold structure remains untested.
The conductor extends from 44m below surface to 300m
down-dip.
sulphide mineralisation at PK3. The best intersections made
Historical drilling by Newmont at the PK6 prospect intersected
were 16.8m at 0.21% Cu, 3.29% Zn from 116.32m and
high-grade mineralisation including 4.20m at 0.38% Cu,
7.09m at 0.35% Cu, 2.76% Zn from 117.07m. Integration of
7.21% Zn, 0.11g/t Au and 14.3g/t Ag from 116.8m, and 1.64m at
SkyTEMTM and aeromagnetic data with historical results shows
0.45% Cu, 9.96% Zn and 13.92g/t Ag from 186.42m.
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Figure 11: Channel 25 SkyTEMTM image over the KC3 prospect with modelled EM plates, soil sampling results and interpreted fold
structure shown.
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SkyTEMTM survey follow-up and soil sampling
Follow-up exploration of the 2018 SkyTEMTM targets in the near-mine area is currently underway. Soil sampling and geological mapping are
being carried out to prioritise targets for ground EM and drill follow up.
In addition to the detailed soil sampling surveys over the anomalies, regional soil sampling covering the near-mine tenements is also in
progress. To date a total of 6,254 samples have been collected and analysed using a hand-held x-ray fluorescence (XRF) instrument
(Figure 12). Samples over selected areas will be assayed using an aqua regia digest combined with inductively coupled plasma mass
spectrometry (ICPM) once sampling is completed.
Figure 12: Channel 25 SkyTEMTM image showing soil sampling completed to date.
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Figure 13: Location of Ayboa and Annex Deposits from Prieska Deposit.
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Regional Exploration
Orion maintains a substantial and prospective landholding in the
Areachap Belt in the Northern Cape province. The Areachap Belt
is similar to other Proterozoic mobile belts hosting major VMS and
magmatic Ni-Cu-Co-PGE deposits.
geological setting, the area offers the potential for economic VMS
copper-zinc and magmatic nickel-sulphide discoveries. It is common
for VMS districts to have small copper-zinc deposits clustering close
to a large deposit. On the Masiqhame prospecting right, the larger
deposits are yet to be discovered.
Orion holds the prospecting rights over a total area of 167,833ha to
the north of the Near-Mine Project (Figure 14). Orion has submitted
applications for a further three prospecting rights to the Department
of Mineral Resource and Energy (DMRE) covering an area of
82,145ha. A Mining Right for copper, nickel, cobalt, Platinum
Group Elements (PGE) and gold was granted in September 2016 to
Namaqua Nickel and awaits execution. The Mining Right falls within
the limits of the prospecting rights and covers an area of 41,176ha.
A new prospecting right application, covering 17,555ha, was
submitted over the Marydale Project.
VMS deposits almost always occur in clusters or ‘districts’
associated with volcanic spreading centres. So far, four such
centres have been identified in the Areachap Belt. Besides the
near-mine projects, Orion is also prospecting for VMS deposits
on the Masiqhame Prospecting Right. Adjoining the north of the
Similarly, world-class nickel deposits also tend to occur in clusters
both on prospect and regional scale. Within these intrusive centres,
a small number of the intrusions tend to host the best mineralisation
depending on the intrusion magma-flow dynamics and the timing
of magmatic sulphide immiscibility and transport. Several mafic
intrusive bodies with nickel and associated metals are known to
occur on the Namaqua-Disawell prospecting rights. The setting of
mineralisation has been confirmed to be similar to other orogenic-
hosted, deep-seated magma conduit complexes in Africa, Australia
and South America. Conduit style mineralisation is currently the top
priority global target for magmatic Ni-Cu-PGE sulphide exploration.
EM geophysical methods are the primary tool for the discovery
of massive magmatic Ni-Cu-Co-PGE deposits. The complexity of
these intrusions requires an innovative approach to exploration to
resolve the locations of economic mineralisation. This entails using
airborne, ground and down-hole surveying systems.
Namaqua-Disawell Project (Ni-Cu), this project is defined in terms
During the reporting period, regional exploration continued on
of the Masiqhame tenement holding and includes the Kantienpan
the Masiqhame and Namaqua-Disawell prospecting rights with
and Boksputs zinc-copper VMS deposits. With its known VMS
comprehensive desktop studies, field mapping and soil sampling
deposits, numerous copper-zinc mineral occurrences and regional
being undertaken.
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Figure 14: Locality Map showing Orion Prospecting and Mining Rights in the Areachap Belt north of Prieska Project.
30
ORION MINERALS ANNUAL REPORT 2020 Figure 15: Aeromagnetic image over the Masiqhame prospecting right
showing the paleo-seafloor setting and soil sampling progress.
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Masiqhame Project Area
The Masiqhame prospecting right is located 90km
north of the Prieska Project in easily accessible, flat-
lying countryside. The area is served by regional grid
power and there are rail lines within 10km of the site
(Figure 14). Orion is currently focusing on VMS-style
mineralisation on Masiqhame, following up on selected
anomalies that were detected by a regional SkyTEMTM
survey completed in early 2018 over the prospecting
right. After ground EM surveys were completed in
FY2019, geological mapping and soil sample surveys
were undertaken over interpreted paleo-seafloor
settings to identify additional prospects and prioritise
drill targets (refer ASX release 24 September 2018)
(Figure 15).
During the reporting period, a comprehensive desk top
study was completed to characterise the stratigraphic
and structural setting of the VMS style deposits and
geochemical signature of the related seafloor setting
on the Orion tenements. Orion believes that prioritising
the paleo-seafloor setting as the prospective horizon
together with the integration of geophysical and
geochemical data may quickly enable new VMS targets
to be identified.
Field work during the reporting period included soil
sampling and reconnaissance mapping. Soil sampling
was concentrated on the Boksputs and Kantienpan
areas. A total of 3,156 samples were collected and
assayed using a handheld XRF instrument to obtain
preliminary results. Samples over selected areas will
be sent to the ALS Laboratory in Johannesburg for
analysis using partial extraction followed by inductive
plasma mass spectrometry.
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Namaqua-Disawell Project Area
The Namaqua-Disawell Project area, which hosts the
Jacomynspan intrusion, is located 65km northwest
of the Prieska Project, within the central part of the
Areachap Terrane (Figure 16). The Project area is highly
prospective for magmatic nickel-copper-cobalt-PGE
sulphide mineralisation within syn- to late-tectonic
ultramafic intrusions, several of which have been
identified. In 2018, Orion completed fixed loop time
domain electromagnetic (FLTDEMs), 11 diamond drill
holes and two down-hole time domain electromagnetic
(DHTDEM) surveys. Orion believes a substantial
exploration opportunity exists within the project area for
VMS copper-zinc and intrusive nickel-copper-cobalt-
PGE mineralisation.
The suite of intrusions on the Namaqua-Disawell
prospecting right is located within the Meso to
NeoProterozoic Namaqua-Natal Orogenic Belt.
This is a complex, long-lived, multi-phase, orogenic
assembly zone, related to the amalgamation of the
Rodinia Supercontinent. This tectonic setting is
favourable for production and ascent of metal-enriched
mantle-derived magma that utilises deep-seated
structural zones as pathways to intrude the upper crust.
Figure 16: Map of the Namaqua – Disawell and Masiqhame Projects showing
the Jacomynspan Ni-Cu district.
Jacomynspan
Ni-Cu District
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Jacomynspan Nickel-Copper-Cobalt-
PGE Project
Figure 17: Aeromagnetic image with areas and structures prioritised for follow-
up indicated, as well as the area covered by soil sampling during FY2020.
The Jacomynspan Deposit hosts a JORC-compliant
Mineral Resource of 6.8 million tonnes grading
0.57% nickel, 0.33% copper and 0.03% cobalt,
containing 39,480 tonnes of nickel, 22,800 tonnes
of copper and 1,800 tonnes of cobalt at a 0.4% Ni
cut-off (refer ASX release 8 March 2018). No changes
to the Mineral Resource were reported during the
reporting period.
Rok Optel Prospect and Area 4
Two other nickel-copper deposits, Area 4 and Rok
Optel, were investigated during the 1970s by Anglo
American Prospecting Services, Newmont, Phelps
Dodge and Hoch Metals.
Four diamond drill holes were drilled in 2018 to
test FLTDEM anomalies and subsequent DHTDEM
conductors on Rok Optel. Transgressive vein and
stringer-style mineralisation intersected in the drill
holes is genetically very significant (refer ASX release
10 September 2018). Most massive sulphide ore
deposits are characterised by magma chamber
dynamics that cause repeated mineralising events
within a constrained locality. The presence of magmatic
sulphide veins injected into the country rock observed
in the drill core is also particularly encouraging as
it highlights the potential to discover bulk massive
sulphide mineralisation.
Namaqua-Disawell Target Generation
Comprehensive desktop studies were undertaken
during the reporting period with several new
geophysical targets identified and existing targets
confirmed. Geophysical targets include:
• Untested subtle aeromagnetic highs similar to
magnetic signatures associated with known
mineralisation on the prospecting right; and
• Structures that host known nickel-copper
mineralisation (Figure 17).
Soil sampling covering the area between Rok Optel
and Area 4 was completed during the September
2019 Quarter bringing the total number of soil samples
collected to date on the Disawell Prospecting Right to
1,670 samples.
Drill ready targets include both untested ground EM
targets at Area 4 (refer ASX release 3 July 2018) and
downhole EM targets at Rok Optel (refer ASX release
24 October 2018). Once field operations resume, the
Company intends to test these targets by means of
mapping, soil sampling, ground geophysics and drilling.
33
ORION MINERALS ANNUAL REPORT 2020 Figure 18: An overview of tenements contained within the IGO-ORN JV, underlain
by aeromagnetics.
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Marydale Gold-Copper Project
(Witkop)
In December 2019, preliminary evaluation of
the potential for small scale or exploratory
gold mining on the Witkop gold project
was completed. This work was done in
collaboration with Orion’s BEE Partner,
Black Star Pty Ltd, and its subsidiary Gariep
Mining (Gariep). Gariep has extensive small-
scale mining experience and a significant
fleet of surface and underground mining
equipment. Orion is evaluating entering
into a joint venture mining agreement with
Gariep to pursue the project.
The following work was completed at the
Marydale Project during FY2020:
• Modelling of mineralisation and resource
estimation in the area of best gold
mineralisation as defined by drilling
and trenching (refer ASX release
17 August 2016);
• First phase metallurgical test work;
• Preliminary pit design, mining and
production schedules; and
• Compilation of a Mine Works Program.
Australia
Fraser Range – Nickel-Copper Projects
(Western Australia)
Orion maintains a sizeable tenement
package in the Fraser Range Province
of Western Australia, which is subject to
an earn-in Joint Venture agreement (JVA)
with IGO Limited (ASX: IGO) (Figure 18).
Under the JVA, IGO is responsible for
all exploration on the tenements and
provides regular updates to Orion on
activities and results.
The combination of magmatic nickel-
copper-cobalt and VMS copper-zinc
mineralisation in the Fraser Range is similar
to the Areachap Belt in South Africa where
Orion holds Prospecting Rights over both
magmatic nickel-copper and VMS-style
copper-zinc deposits.
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The North West Passage – E39/1653
The North West Passage target was initially identified by Orion in
a 2014 versatile time domain electromagnetic (VTEM) survey and
was interpreted further by IGO using additional geophysical data,
including aeromagnetics and ground gravity (refer ASX release
30 July 2019).
Two diamond drill holes were completed by IGO during FY2020
to test EM plates representing nickel-copper massive sulphide
targets (Figure 19). The holes were successful in intersecting
assemblages intrusive into carbonatitic and graphitic sub-units are
considered to be highly prospective for magmatic nickel-copper
mineralisation within the Fraser Range while the injected massive
sulphide veins are commonly associated with intrusive complexes
hosting massive sulphide nickel deposits.
In hole 19AFDD1001, ultramafic rocks intersected from 160m to
215m returned maximum values of 2,350ppm (parts per million)
nickel, 2,350ppm chromium and 28% magnesium oxide (MgO)
(refer ASX release 3 February 2020).
mafic-ultramafic intrusive rocks intercalated with carbonate
Ground reconnaissance began at North West Passage in May
and graphitic meta-sediments, proving the area to be highly
2020, ahead of a planned campaign of infill aircore drilling.
prospective for massive nickel-copper sulphide mineralisation.
When potential heritage artifacts were identified at North West
The intrusive rocks contain visible sulphides with massive
passage, it was recommended that a consultant be appointed
and semi massive pyrrhotite – pyrite stringers injected into
to carry out a heritage survey to better delineate areas of cultural
both ultramafic rock and its host rocks. Multiphase ultramafic
significance before the proposed aircore drill program.
Figure 19: Completed collars and drill traces of drill holes 19AFDD1001 and 19AFDD1002 (looking from the south) with targeted EM plate in
red on the left and in plan view over merged tilt derivative and Total Magnetic image (north is up).
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ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
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Figure 20: Semi massive pyrite-pyrrhotite vein intersected in hole
19AFDD1001 from 188.3-188.8m. The yellow circle indicates a
chalcopyrite grain.
Tenement E28/2367
Four prospects, Hook, Pike, Pike Eye and Garfish
have been identified on tenement E28/2367, based
on EM, airborne magnetic, gravity and geochemical
data (Figure 21).
Figure 21: IGO-Orion Fraser Range Joint Venture Tenements showing regional aeromagnetic image and locality of the Hook and
Pike Prospects, relative to nearby Legend Mining Mawson Prospect.
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The Hook 1 prospect lies 16km north-east of Legend Mining’s
IGO drilled three holes on tenement E28/2367 (Figure 22).
(ASX: LEG) Mawson Prospect (previously known as Area D) (Figure
Drill hole 19AFDD1008 drilled on Hook 1 intersected gabbronorite
21). During FY2020, Legend Mining confirmed a significant new
zones 6m to 57m thick that are intercalated with locally graphitic
discovery at the Mawson Prospect, with high-grade massive
metasedimentary rocks containing sulphide stringers and semi-
sulphide intercepts of up to 12.8m at 2.76% nickel and 1.36%
massive sulphide veins up to 10cm thick (Figure 23). A down-hole
copper from 234.9m reported in diamond hole RKDD008 (refer LEG
EM survey identified a strong conductive response beyond the
ASX release 21 April 2020). The Mawson intrusive is reported to be
end of hole. Once drilling recommences, hole 19AFDD1008 will be
hosted by graphitic sediments similar to those at Pike and Hook.
deepened by 180m to test the down-hole EM conductor.
Figure 22: Plan view of the Pike 1, Hook 1 and 2 prospects with diamond drill holes and targeted conductors plotted on airborne magnetics.
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ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
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Figure 23: Semi-massive to massive pyrrhotite-pyrite vein at
331m down-hole depth in drill hole 19AFDD1008 drilled on the
Hook 1 prospect.
Based on EM, geochemistry and magnetic structural
data, a further six diamond drill holes (including deepening
of 19AFDD1008) for 2,380m have been planned to test
further EM targets at Hook, Pike Eye and Pike.
The Pike conductors offer both copper-zinc VMS targets
and magmatic hosted nickel-copper targets.
Diamond drilling at Kanandah Station has been delayed
to the first half of FY2021 to enable access tracks to be
improved and to develop a reliable source of water to
support drilling activities.
Ground reconnaissance and infill aircore drilling programs
were conducted within tenements E39/1654, E39/1653,
E69/2707, E28/2596 and E69/2379 (Figure 18) in the
June 2020 Quarter, with assay results pending at the end
of the reporting period.
Completed Aircore Drilling
A total of 119 aircore holes were drilled at the Peninsula,
Pennor West and Black Magic prospects across
tenements E39/1654, E39/1653, E69/2707, E69/2379
and E28/2596 (Figure 24). Drilling near the Peninsula
and Pennor West areas targeted the Peninsula Intrusive
Complex whilst the remaining infill drilling targeted
discrete gravity highs adjacent to zones of anomalous
geochemistry. Of the holes drilled, 54 intersected mafic and
ultramafic rocks. Assay results from the mafic-ultramafic
rocks were pending at the end of the reporting period and
will be reviewed by IGO to determine the prospectivity for
magmatic nickel-copper sulphide mineralisation.
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Figure 24: Infill aircore drilling completed during FY2020, underlain by aeromagnetics (TMI) with historical drill collars illustrated.
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During April 2020, IGO designed and peer reviewed an infill aircore
drilling program for 2020. This program was designed to test and
define the top-of-basement expression of existing geochemical,
geophysical and geological targets.
The main areas proposed for infill aircore drilling within the
IGO-ORN JV project include:
• Hootie and CE North prospects in the northern extent of the
project area;
• An extension to the Pennor / Peninsula prospect area; and
• Kanandah Station Trend prospects; Pike, Pike-Eye and Old
Soldiers.
The Hootie prospect is defined by an area of anomalous
geochemistry situated proximal to two shear zones and a fold
hinge structure. These combined attributes make this a favourable
prospect for magmatic nickel-copper mineralisation.
CE North is focused within a magnetic feature previously targeted
by Orion, where favourable host rocks were intersected. This infill
aircore drilling program will cover an area devoid of drilling and
ground moving-loop EM-surveys. If the infill drilling is successful,
IGO will consider conducting a moving-loop electromagnetic survey
(MLEM) and/or diamond drill testing.
Walhalla Gold and Polymetals Project (Victoria)
While the Walhalla-Woods Point District is best known for gold
mining, high-grade copper-nickel and PGE mineralisation also
occurs within the belt. Both the gold and copper-nickel-PGE
mineralisation within this district are hosted within dykes from the
Woods Point Dyke Swarm (WPDS), a series of ultramafic to felsic
dykes occurring over a 75km long north-south belt.
The Company continued to progress its licence applications over
prospective areas at Walhalla.
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ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
ORE RESERVE & MINERAL RESOURCE STATEMENT
O r i o n h a s a d u a l l i s t i n g w i t h t h e A u s t r a l i a n
S e c u r i t i e s E x c h a n g e ( A S X ) a n d t h e
J o h a n n e s b u r g S t o c k E x c h a n g e ( J S E )
a n d r e p o r t s E x p l o r a t i o n R e s u l t s , M i n e r a l
R e s o u r c e a n d O r e R e s e r v e E s t i m a t e s i n
a c c o r d a n c e w i t h t h e A S X l i s t i n g r u l e s
a n d t h e r e q u i r e m e n t s a n d g u i d e l i n e s
o f t h e A u s t r a l a s i a n C o d e f o r R e p o r t i n g
E x p l o r a t i o n R e s u l t s , M i n e r a l R e s o u r c e s a n d
O r e R e s e r v e s , 2 0 1 2 ( t h e J O R C C o d e ) .
Firstly, the Competent Persons responsible for public reporting:
• Must be current members of a professional organisation that is
recognised in the JORC Code framework;
• Must have at least five years relevant experience in the style of
mineralisation and reporting activity for which they are acting as
Competent Person;
• Must have given a written consent to inclusion of the results and
estimates that are reported, stating that the report agrees with
supporting documentation regarding the results or estimates
prepared by each Competent Person; and
The JSE requires reporting in terms of the South African Code
• Must has prepared supporting documentation for results and/or
for the Reporting of Exploration Results, Mineral Resources and
estimates to a level consistent with standard industry practices.
Mineral Reserves, 2016 (SAMREC Code), however the JORC Code
requirements are considered similar enough to be accepted by
the JSE. The Orion financial year end is 30 June and most of its
This includes JORC Table 1 Checklists for any results and/or
estimates reported.
subsidiaries have been aligned to this annual reporting date.
Orion also ensures that any publicly reported results and/ or
The 2020 Annual Report covers Orion’s five exploration projects in
the Northern Cape province of South Africa as well as its interest in
a number of Australian projects. By the end of FY2018, Indicated
and Inferred Mineral Resources were classified and reported from
both Orion’s flagship Prieska VMS Project (refer ASX releases 8
February 2018 and 9 April 2018) as well as the Jacomynspan
Nickel-copper Project (refer ASX release 8 March 2018). By the
end of FY2019, the Prieska Project’s Mineral Resources had
been upgraded to Probable Mineral Reserves, Indicated Mineral
Resources and Inferred Mineral Resources for both the surface
+105 Level Mineral Resources (refer ASX releases 15 January 2019
and 26 June 2019) and the underground Deep Sulphide Mineral
Resource (refer ASX releases 18 December 2018 and 26 June
2019). The Prieska Deep Sulphide Ore Reserve was updated in
estimates are prepared using JORC and ASX guidelines, accepted
industry methods and using specialised guidance for aspects
where required, such as metal prices and foreign exchange rates.
Estimates and results are also peer reviewed internally by Orion’s
senior technical staff before being presented to Orion’s Board for
approval and subsequent ASX reporting.
Market sensitive or production critical estimates may also be
audited by suitably qualified external consultants to ensure the
precision and correctness of the reported information. Once
operational, Orion plans to ensure that the estimation precision of
actual mine and process production is compared to the Mineral
Resource and Ore Reserve forecasts.
FY2020. A comparison of the FY2019 and FY2020 estimates are
Prieska Project Mineral Resources and Reserves
summarised below on a project by project basis.
Listings of the respective estimates as they stand at the end of
FY2020 are tabulated below for Orion’s total interests and for the
operational and project divisions. The tables are accompanied by
the relevant JORC Code Competent Person statements. Refer to
the Corporate section for Orion’s interest in each project.
The BFS reported on herein contains production targets and
forecast financial information supported by a combination of
Probable Ore Reserves, Indicated Mineral Resources and Inferred
Mineral Resources, all as defined, compiled and disclosed in
compliance with ASX Listing Rules and The Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves, 2012 (JORC (2012) or JORC Code) reporting standards.
Orion’s procedures for public reporting ensures transparency,
The Ore Reserves and Mineral Resources underpinning the
materiality and competence in its governance of Mineral Resource
production target in this report have been prepared by competent
and Ore Reserve Estimates and release of results requires several
persons in accordance with the requirements in Appendix 5A
assurance measures.
(JORC (2012)).
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ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
ORE RESERVE & MINERAL RESOURCE STATEMENT continu ed
Mineral Resources
The Mineral Resource Estimates classified and reported in terms of the JORC Code, 2012 guidelines, for both the Deep Sulphide Mineral
Resource and the +105 Level Mineral Resource are as tabled individually below and then combined in the final table.
Deep Sulphide Mineral Resource for PCZM + Vardocube Tenements
(Effective Date: 15 December 2018)
Tenement
PCZM
Vardocube
Deep Sulphide Total
Classification
Tonnes
Cu (metal tonnes)
Cu (%)
Zn (metal tonnes)
Zn (%)
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
15,052,000
6,998,000
22,050,000
3,455,000
3,221,000
6,676,000
18,507,000
10,219,000
170,000
80,000
249,000
44,000
41,000
85,000
217,000
117,000
1.15
1.04
1.13
1.27
1.27
1.27
1.17
1.14
510,000
270,000
779,000
158,000
147,000
305,000
667,000
417,000
3.38
3.86
3.53
4.57
4.56
4.57
3.60
4.08
3.77
Deep Sulphide Resource bottom cut-off = 4% Equivalent Zn (Zn Eq = Zn% + (Cu%*2)). Mineral Resources stated at zero % cut-off. Tonnes
are rounded to thousands, which may result in rounding errors.
28,726,000
1,084,000
334,000
Total
1.16
+105 Updated Mineral Resource for the PCZM Tenement
(Effective Date: 11 January 2019) 2
Classification
Indicated
Inferred
Mineralised zone
Tonnes
Cu (metal tonnes)
Cu (%)
Zn (metal tonnes)
Zn (%)
Supergene
Total
Oxide
Supergene
Total
+105
624,000
624,000
511,000
627,000
1,138,000
10.000
10,000
3,000
14,000
17,000
1.54
1.54
0.6
2.2
1.5
19,000
19,000
4,000
11,000
16,000
3.05
3.05
0,9
1.8
1.4
2.0
Total
+105m Level Mineral Resource bottom cut-off = 0.3% Cu. Mineral Resources stated at zero % cut-off. Tonnes are rounded to thousands,
which may result in rounding errors.
Mineral Resource
1,762,000
27,000
35,000
1.5
1 Mineral Resource reported in ASX release of 18 December 2018: “Landmark Resource Upgrade Sets Strong Foundation” available to the public on
http://www.orionminerals.com.au/investors/asx-jse-announcements/. Competent Person Orion’s exploration: Mr. Errol Smart. Competent Person: Orion’s
Mineral Resource: Mr. Sean Duggan. Orion confirms it is not aware of any new information or data that materially affects the information included above.
For the Mineral Resources, the company confirms that all material assumptions and technical parameters underpinning the estimates in the ASX release of
18 December 2018 continue to apply and have not materially changed. Orion confirms that the form and context in which the Competent Person’s findings are
presented here have not been materially modified.
2 Mineral Resource reported in ASX release of 15 January 2019: “Prieska Total Resource Exceeds 30Mt @ 3.7% Zn and 1.2% Cu Following Updated Open Pit
Resource” available to the public on http://www.orionminerals.com.au/investors/asx-jse-announcements/. Competent Person Orion’s exploration:
Mr. Errol Smart. Competent Person: Orion’s Mineral Resource: Mr. Sean Duggan. Orion confirms it is not aware of any new information or data that materially
affects the information included above. For the Mineral Resources, the company confirms that all material assumptions and technical parameters underpinning
the estimates in the ASX release of 15 January 2019 continue to apply and have not materially changed. Orion confirms that the form and context in which the
Competent Person’s findings are presented here have not been materially modified.
Mineral Resource
Deep Sulphide
Resource
+105m Level Resource
Combined Prieska Project Mineral Resource for PCZM + Vardocube Tenements
(Effective Date: 11 January 2019) 2
Classification
Indicated
Tonnes
18,507,000
Cu (metal tonnes)
217,000
Cu (%)
1.17
Zn (metal tonnes)
667,000
Zn (%)
3.60
Inferred
Indicated
Inferred
Indicated
Inferred
10,219,000
624,000
1,138,000
19,131,000
11,357,000
30,488,000
117,000
10,000
17,000
227,000
134,000
361,000
1.1
1.54
1.4
1.18
1.2
1.2
417,000
19,000
16,000
686,000
433,000
1,119,000
4.1
3.05
1.4
3.59
3.8
3.7
Total
Grand total
Deep Sulphide Mineral Resource bottom cut-off = 4% Equivalent Zn (Zn Eq = Zn% + (Cu%*2)); +105m Level Mineral Resource bottom
cut-off = 0.3% Cu. Mineral Resources stated at zero % cut-off. Tonnes are rounded to thousands, which may result in rounding errors.
The Mineral Resources are inclusive of Ore Reserves.
42
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
ORE RESERVE & MINERAL RESOURCE STATEMENT continu ed
Ore Reserves
The Ore Reserves that follow are classified and reported in accordance with JORC Code, 2012.
The Deep Sulphide Probable Ore Reserve estimate amounts to 14.0Mt grading 1.0% Cu and 3.2% Zn, including 146kt copper metal tonnes
and 446kt zinc metal tonnes (Cu-Eq of 248kt metal tonnes at 1.8%) as tabulated below.
Prieska Project Deep Sulphide Ore Reserves (Effective Date: 30 April 2020) 3
Cu
Zn
Cu equivalent 4
Deposit
Deep Sulphide
Total
Ore Reserve
classification
Tonnage
(Mt)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Probable
Probable
14.0
14.0
146
146
1.0
1.0
446
446
3.2
3.2
248
248
Grade
(%)
1.8
1.8
Deep Sulphide Ore Reserves calculated using financial assumptions and modifying factors stated in the Study. Tonnes are rounded to
thousands, which may result in rounding errors.
The +105 Level Probable Ore Reserve is estimated at 480kt grading 1.5% Cu and 3.3% Zn, including 7kt copper metal tonnes and 16kt
zinc metal tonnes, (Cu-Eq of 11kt metal tonnes at 2.3%).
Prieska Project +105 Level Ore Reserves (Effective Date: 15 June 2019) 5
Cu
Zn
Cu equivalent 4
Deposit
+105 Level
Total
Ore Reserve
classification
Probable
Probable
Tonnage
(Mt)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
484
484
7
7
1.5
1.5
16
16
3.3
3.3
11
11
Grade
(%)
2.3
2.3
+105m Level Ore Reserves calculated using financial assumptions and modifying factors stated in the Study. Tonnes are rounded to
thousands, which may result in rounding errors.
3 Ore Reserve reported in ASX/JSE release of 26 May 2020: “Prieska BFS – Long life, high margin project” available to the public on www.orionminerals.com.
au/investors/ asx-jse-announcements. Competent Person: Orion’s Ore Reserve: Mr. William Gillespie. Orion confirms it is not aware of any new information
or data that materially affects the information included above. For the Ore Reserves, the Company confirms that all material assumptions and technical
parameters underpinning the estimates in the ASX release of 26 May 2020 continue to apply and have not materially changed. Orion confirms that the form
and context in which the Competent Person’s findings are presented here have not materially changed.
4 Method used to determine Cu equivalent Zn grades:
Underground Cu Equivalent Estimation
1% Zn = (Zn price x Zn NSR) x (Zn plant recovery) = (2,337 x 68.3%) x (81.6%) = 0.23% Cu
(Cu price x Cu NSR) x (Cu plant recovery) (6,680 x 99.3%) (85.5%)
Therefore Cu Equivalent grade = Cu grade + 0.23 x Zn grade.
Open-pit Cu Equivalent Estimation
1% Zn = (Zn price x Zn NSR) x (Zn plant recovery) = (2,337 x 52.2%) x (75.8%) = 0.17% Cu
(Cu price x Cu NSR) x (Cu plant recovery) (6,680 x 91.9%) (61.7%)
Therefore Cu Equivalent grade = Cu grade + 0.17 x Zn grade.
Combined Cu Equivalent Estimation
1% Zn = (Zn price x Zn NSR) x (Zn plant recovery) = (2,337 x 67.8%) x (81.4%) = 0.23% Cu
(Cu price x Cu NSR) x (Cu plant recovery) (6,680 x 99.0%) (84.3%)
Therefore Cu Equivalent grade = Cu grade + 0.23 x Zn grade.
Metal prices assumptions based on S&P Global commodity long-term forecast (April 2020).
Plant recovery assumptions are based on metallurgical test work completed to date at Mintek Laboratories (South Africa) under the supervision of DRA. Refer
to JORC Table 1 in the ASX/JSE releases 15 November 2017, 8 February 2018, 1 March 2018, 12 June 2018, 22 October 2018 and 31 October 2019.
5 Ore Reserve reported in ASX/JSE release of 26 June 2019: “Prieska BFS – Long life, high margin project” available to the public on www.orionminerals.com.
au/investors/ asx-jse-announcements. Competent Person: Orion’s Ore Reserve: Mr. William Gillespie. Orion confirms it is not aware of any new information
or data that materially affects the information included above. For the Ore Reserves, the Company confirms that all material assumptions and technical
parameters underpinning the estimates in the ASX release of 26 June 2019 continue to apply and have not materially changed. Orion confirms that the form
and context in which the Competent Person’s findings are presented here have not materially changed.
43
ORION MINERALS ANNUAL REPORT 2020
BUSINESS REVIEW
ORE RESERVE & MINERAL RESOURCE STATEMENT continu ed
Prieska Project Ore Reserves Estimate (Effective Date: 30 April 2020)
Deposit
+105 Level
Deep Sulphide
Total
1.8
Project Ore Reserves calculated using financial assumptions and modifying factors stated in the Study. Tonnes are rounded to thousands,
14.5
462
259
153
3.2
1.1
Grade
(%)
3.3
3.2
Metal tonnes
(Kt)
11
248
Grade
(%)
2.3
1.8
Ore Reserve
classification
Probable
Probable
Probable
Cu
Tonnage
(Mt)
0.5
14.0
Metal tonnes
(Kt)
7
146
Zn
Metal tonnes
(Kt)
16
446
Grade
(%)
1.5
1.0
Cu equivalent
which may result in rounding errors.
Prieska Project Mineral Resource and Ore Reserve Annual Comparison
Prieska Project
Financial year
July 2018 – June 2019
July 2019 – June 2020
Tenement
PCZM and
Vardocube
Mineral
Resource
Deep
Sulphide
+105m
Level
Classification
Probable Ore Reserve
Indicated Mineral Resource
Inferred Mineral Resource
Probable Ore Reserve
Indicated Mineral Resource
Inferred Mineral Resource
Tonnage
(Mt)
13.14
18.5
10.2
0.48
0.6
1.1
The Mineral Resources are inclusive of Ore Reserves.
Probable Ore Reserve
Indicated Mineral Resource
13.6
19.1
Totals
Inferred Mineral Resource
11.3
The Mineral Resources are inclusive of Ore Reserves.
Cu
(Kt)
1.0
1.2
1.1
1.5
1.5
1.4
1.1
1.2
1.2
Zn
(%)
3.2
3.6
4.1
3.3
3.1
1.4
3.2
3.6
3.8
Tonnage
(Mt)
14.0
18.5
10.2
0.5
0.6
1.1
14.5
19.1
11.3
Cu
(Kt)
1.0
1.2
1.1
1.5
1.5
1.4
1.1
1.2
1.2
Zn
(%)
3.2
3.6
4.1
3.3
3.1
1.4
3.2
3.6
3.8
Refer
ASX release
26 May 2020
18 Dec 2019
9 Apr 2018
18 Dec 2018
26 Jun 2019
8 Feb 2018
15 Jan 2019
8 Feb 2018
15 Jan 2019
26 May 2020
15 Jan 2019
8 Feb 2018
15 Jan 2019
44
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
ORE RESERVE & MINERAL RESOURCE STATEMENT continu ed
Competent Persons’ Statements – Prieska Project
The information in this report that relates to Exploration Results is not in contravention of the 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) and has been compiled and assessed under the
supervision of Mr Errol Smart, Orion’s Managing Director. Mr Smart (PrSciNat) is registered with the South African Council for Natural
Scientific Professionals, a Recognised Overseas Professional Organisation (PRO) for JORC purposes and has sufficient experience
that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as
a Competent Person as defined in the 2012 Edition of the JORC Code. Mr Smart consents to the inclusion in this report of the matters
based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources is not in contravention of the JORC Code and has been compiled and
assessed under the supervision of Mr Sean Duggan, a Director and Principal Analyst at Z Star Mineral Resource Consultants (Pty) Ltd.
Mr Duggan (PrSci.Nat) is registered with the South African Council for Natural Scientific Professionals (Registration No. 400035/01),
an PRO for JORC purposes and has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the JORC Code.
Mr Duggan consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to the Ore Reserves is based on mining-related information incorporated under the supervision
of Mr William Gillespie, a Competent Person who is a fellow of the Institute of Materials, Minerals and Mining (IMMM), a Recognised
Overseas Professional Organisation, (PRO). Mr Gillespie takes overall responsibility for the Ore Reserve aspects of the release as
Competent Person. Mr Gillespie is an employee of A & B Global Mining Consultants (Pty) Ltd which contracts to Orion. Mr Gillespie has
sufficient experience that is relevant to the type of mining and type of deposit under consideration and to the activities being undertaken
to qualify as a Competent Person as defined in the 2012 Edition of the JORC Code. Mr Gillespie consents to the inclusion in this report of
the matters based on his information in the form and context in which it appears.
The information in this report that relates to the metallurgy and processing plant information incorporated under supervision of Mr John
Edwards, a Competent Person, who is a fellow of the South African Institute of Mining and Metallurgy (SAIMM), a PRO. Mr Edwards is
an employee of METC Engineering Ltd., that provides consulting services to Orion. Mr Edwards has sufficient experience that is relevant
to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent
Person as defined by the 2012 Edition of the JORC Code. Mr Edwards consents to the inclusion of the report of the matters based on his
information in the form and context in which it appears.
Jacomynspan Project Mineral Resources
The Mineral Resource Estimate for the Namaqua-Disawell Jacomynspan Project is as reported in the 2018 annual report. There are no
material changes to the estimate.
A maiden Mineral Resource Estimate, based on drilling data from 1971 to 2012 , reported at a 0.4% Ni cut-off grade gives 6.8 Mt
containing 39,000 tonnes Ni at 0.5% Ni, 22,000 tonnes Cu at 0.3% Cu and 1,800 tonnes Co at 0.03% Co (refer ASX release 8 March
2018). The Mineral Resources for the Jacomynspan Project were previously reported (refer ASX release 14 July 2016) in accordance with
the SAMREC Code (2007) as a “qualifying foreign resource estimate” as defined in the ASX Listing Rules.
The Mineral Resources have subsequently been reassessed by the MSA Group (Pty) Ltd on behalf of the Company and reported in
compliance with the JORC Code, 2012 6.
6 Mineral Resource reported in ASX/JSE release of 8 March 2018: “modelling confirms target around Jacomynspan intrusive” available to the public on
http://www.orionminerals.com.au/investors/asx-jse-announcements/. Competent Person Orion’s exploration: Mr. Errol Smart. Competent Person: Orion’s
Mineral Resource: Mr. Jeremy Witley. Orion confirms it is not aware of any new information or data that materially affects the information included above.
For the Mineral Resources, the company confirms that all material assumptions and technical parameters underpinning the estimates in the ASX release of
8 March 2018 continue to apply and have not materially changed. Orion confirms that the form and context in which the Competent Person’s findings are
presented here have not been materially modified.
45
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
ORE RESERVE & MINERAL RESOURCE STATEMENT continu ed
Indicated and Inferred Mineral Resource Statement for the Jacomynspan Project on the Namaqua Mining Right using a 0.4% Ni cut-off
Mineral Resource Grade-Tonnage Table for the Jacomynspan Project at a 0.40% Ni cut-off grade
Ni
Cu
Co
Pt
Pd
Au
Classification
Indicated
Inferred
Cut off
% Ni
0.40
Volume
(m3)
Grade
Metal
Grade
Metal
Grade
Metal
Grade
Metal
Grade
Metal
Grade
Metal
Tonnes
(%)
tonnes
(%)
tonnes
(%)
tonnes
(g/t)
ounces
(g/t)
ounces
(g/t)
ounces
584,000 1,780,000
0.55 10,000
0.29
5,000
0.03
1,000
0.17 10,000
0.11
6,000
0.07
4,000
0.40 1,647,000 5,056,000
0.58 29,000
0.35 18,000
0.03
1,000
0.19 31,000
0.13 21,000
0.07 11,000
Indicated and Inferred Mineral Resource for the Jacomynspan Project at various cut-offs
Indicated Mineral Resource for the Jacomynspan Project at various Ni cut-off grades
Cut off
% Ni
Volume
(m3)
Tonnes
Grade
(%)
Metal
tonnes
Grade
(%)
Metal
tonnes
Grade
(%)
Metal
tonnes
Grade
(g/t)
Metal
ounces
Grade
(g/t)
Metal
ounces
Grade
(g/t)
Metal
ounces
Ni
Cu
Co
Pt
Pd
Au
0.20 11,252,000 33,000,000
0.26
86,000
0.18
58,000
0.25
0.30
0.40
0.50
4,205,000 12,393,000
0.32
40,000
0.20
25,000
1,501,000
4,461,000
0.42
19,000
0.24
11,000
584,000
1,780,000
0.55
10,000
284,000
872,000
0.66
6,000
0.29
0.37
5,000
3,000
0.02
0.02
0.02
0.03
0.04
Note: Mineral Resource stated at 0.4% cut-off.
6,000
3,000
1,000
1,000
0.10 101,000
0.05
53,000
0.04
44,000
0.11
45,000
0.06
25,000
0.05
19,000
0.14
20,000
0.08
12,000
0.17
10,000
300
0.16
5,000
0.11
0.11
6,000
3,000
0.05
0.07
0.07
8,000
4,000
2,000
Inferred Mineral Resource for the Jacomynspan Project at various Ni cut-off grades
Ni
Cu
Co
Pt
Pd
Au
Cut off
% Ni
Volume
(m3)
Tonnes
Grade
(%)
Metal
tonnes
Grade
(%)
Metal
tonnes
Grade
(%)
Metal
tonnes
Grade
(g/t)
Metal
ounces
Grade
(g/t)
Metal
ounces
Grade
(g/t)
Metal
ounces
0.20 11,022,000 32,304,000
0.29
94,000
0.20
63,000
0.25
0.30
0.40
0.50
3,974,000 11,863,000
0.42
49,000
0.26
31,000
2,303,000
7,008,000
0.52
36,000
0.31
22,000
1,647,000
5,056,000
0.58
29,000
0.35
18,000
982,000
3,041,000
0.67
20,000
0.41
13,000
0.02
0.02
0.02
0.03
0.03
6,000
2,000
2,000
1,000
1,000
0.10 108,000
0.06
60,000
0.04
44,000
0.15
55,000
0.09
34,000
0.05
20,000
0.19
42,000
0.12
27,000
0.06
14,000
0.19
31,000
0.13
21,000
0.07
11,000
0.17
16,000
0.12
11,000
0.07
7,000
Note: Mineral Resource stated at 0.4% cut-off.
Namaqua-Disawell Project Mineral Resource and Ore Reserve Annual Comparison
Namaqua-Disawell Project
Financial Year
July 2017 – June 2018
July 2019 – June 2020
Tenement
Mineral Resource
Classification
Namaqua-
Disawell
Indicated Mineral Resource
Jacomynspan
Inferred Mineral Resource
Indicated Mineral Resource
Inferred Mineral Resource
Note: Mineral Resource stated at 0.4% cut-off.
Tonnage
Mt
1.78
5.06
1.78
5.06
Ni
(%)
0.6
0.6
0.6
0.6
Cu
(%)
Co
(%)
Pt
(g/t)
Pd
(g/t)
Tonnage
Mt
Ni
(%)
Cu
(%)
Refer ASX
release
0.3 0.03
0.4 0.03
0.3 0.03
0.4 0.03
0.2
0.2
0.2
0.2
0.1
0.1
2.6
3.8
No material change 8 Mar 2018
No material change 8 Mar 2018
No material change 8 Mar 2018
No material change 8 Mar 2018
Competent Person’s Statement – Jacomynspan Project
The information in this report that relates to the Mineral Resource at the Jacomynspan Project is based on information compiled by
Mr Jeremy Charles Witley (BSc Hons, MSC (Eng.)), a Competent Person who is registered with the South African Council for Natural
Scientific Professionals (Registration No. 400181/05), a ‘Recognised Professional Organisation’ (RPO) included in a list posted on the
ASX website from time to time. Mr Witley is a Principal Resource Consultant at the MSA Group Pty Ltd and a consultant to Orion.
Mr Witley has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the
activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Mr Witley consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
46
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
CORPORATE
The Company recorded a loss of $18.65 million after tax for the
$2.5 million in the placement. In November 2019, the Company
full year ended 30 June 2020. The Company continues to focus
issued a total of 308.7 million Shares in the Company at
strongly on the development of the Prieska Project as well as
$0.025 per Share, finalising the placement.
exploration, evaluation and development within its Areachap
exploration projects in South Africa. A total of $9.81 million in
exploration expenditure was incurred during the year. Cash
received from financing activities totalled $14.0 million.
Cash on hand at the end of the year was $1.22 million.
Capital raisings
During the financial year, the Company raised $12.8 million before
costs to fund its operations primarily in South Africa and for working
capital. In summary, key capital raisings comprised:
Placements
• In April 2019, the Company announced a pivotal $8 million
capital raising underpinned by a group of high-profile South
African investors as part of a proposed restructure of the
Company’s BEE equity participation at project level, achieving
accelerated compliance with the ownership aspects of the South
African Mining Charter 2018 (refer South African BEE ownership
re-structure and share issue section below).
The capital raising, conducted by way of a share placement,
comprised the issue of 200.9 million ordinary shares in Orion
(Shares) at an issue price of $0.04 per Share, together with
one free attaching unlisted option for every two Shares issued
(exercise price of $0.05 and an expiry date of 31 October 2019).
The placement included approximately $4 million placed to
experienced BEE entrepreneurs, of which $2 million was placed to
incoming BEE equity investors who will also invest at the Prieska
Project level.
• Following year-end, on 7 August 2020, Orion announced a
strongly supported $6.2 million capital raising to progress the
Prieska Project (Capital Raising). The Capital Raising, which is
being conducted via a two-tranche placement, comprises
365.2 million Shares at an issue price of $0.017 Share.
The Capital Raising was strongly supported by existing
cornerstone shareholders and new investors, with the proceeds
expected to put Orion in a strong financial position as it progresses
pivotal funding discussions and advances the previously
announced Macquarie Capital led partnering process for the
Prieska Project. The placement will occur in two stages, being:
• Tranche 1 – In August 2020, the Company issued
346.1 million Shares, to raise $5.8 million, resulting from a
receipt of funds from investors for Tranche 1 commitments; and
• Tranche 2 – This will comprise the issue of 19 million Shares
to Tembo Capital to raise $0.3 million (subject to shareholder
approval, to be sought at a general meeting of Orion
shareholders to be held on 29 September 2020 and Foreign
Investment Review Board (FIRB) approvals).
In addition to the Capital Raising, Tembo Capital subscribed
for a further $2.1 million worth of Shares, at an issue price of
$0.017 per Share, being the issue price for Shares issued under
the Capital Raising (subject to shareholder and FIRB approvals).
This amount will be offset against the Tembo Capital Loan Facility
(see below), enabling Orion to repay the Loan Facility in full.
Share Purchase Plan
In addition to the placement announced on 24 October 2019,
the Company also announced a Share Purchase Plan (SPP)
Tembo Capital Mining Fund II LP and its affiliated entities
giving shareholders an opportunity to increase their shareholding
(Tembo Capital) also confirmed its continued support of Orion
in the Company as it continues to advance its Prieska Project
by subscribing for $2 million in Tranche 1 of the placement. The
development opportunity. The SPP offered eligible shareholders
placement occurred in two stages, being:
• Tranche 1 – In April 2019, a total of 117.23 million Shares
the opportunity to participate in the Company’s Capital Raising on
substantially the same terms as the Company’s placement at an
and 58.61 million options were issued, to raise $4.69 million,
issue price of $0.025 per Share.
resulting from a receipt of funds from investors for Tranche 1
commitments; and
The SPP opened on 30 October 2019 and closed on
6 December 2019 and attracted strong support from eligible
• Tranche 2 – In September 2019, a total of 83.71 million Shares
shareholders, with applications totalling $1.75 million received.
and 41.85 million options were issued, to raise $3.34 million.
On 12 December 2019, the Company issued 70.1 million Shares
• On 24 October 2019, the Company announced that it had
subscribed for under the SPP.
received commitments from investors to raise approximately
$5.5 million by way of a placement of Shares at $0.025 per
Conversion of Tembo Capital Loan Facility
On 14 May 2020, Orion announced that a $1.0 million unsecured
Share. Following the announcement, the Company received
convertible loan facility had been agreed with Tembo Capital (Loan
additional commitments from investors, increasing the amount
Facility) and following this, on 29 June 2020, the Company and
raised by the Company to $7.7 million, by way of the placement
Tembo Capital agreed to increase the Loan Facility amount by
of 308.7 million Shares at $0.025 per Share. Tembo Capital
$1.0 million to $2.0 million. Under the terms of the Loan Facility, the
again confirmed its continued support for Orion, subscribing for
Loan Facility amount, interest and any amount capitalised under
47
ORION MINERALS ANNUAL REPORT 2020
BUSINESS REVIEW
CORPORATE co ntinue d
the Loan Facility (Outstanding Amount) will be automatically setoff
As at 30 June 2020, the balance of the Loan Facility was
against the amount to be paid by Tembo Capital for the issue and
$2.01 million (including capitalised interest).
allotment of Shares to Tembo Capital under any capital raising
undertaken by Orion on or before 31 October 2020 (Subscription
Amount) (subject to Tembo Capital Board approval and shareholder
and FIRB approvals).
The key terms of the Loan Facility agreement are:
• Loan amount – $2.0 million;
• Interest – capitalised at 12% per annum;
• Set-off under capital raising – the Outstanding Amount will
be automatically set-off against the amount to be paid by Tembo
Capital for the issue and allotment of Shares to Tembo Capital
under any capital raising undertaken by Orion on or before
31 October 2020 (Subscription Amount) (subject to shareholder
Additional information regarding the Loan Facility is included in the
Annual Financial Report.
South African BEE ownership re-structure and share issue
In April 2019, Orion entered into a MoU with each of the existing
BEE participants (being the Mosiapoa Family Trust (Mosiapoa),
Power Matla (Pty) Ltd (Power Matla) and African Exploration
and Mining Finance Corporation (SOC) Ltd (AEMFC) in its South
African subsidiaries (being PCZM) (formerly Repli), Vardocube,
Bartotrax and Rich Rewards Trading 437 (Pty) Limited (Rich
Rewards). Under the terms of this MoU, the existing BEE
participants agreed to exchange their shares in Orion’s South
African subsidiaries for approximately 134 million JSE-listed
and regulatory approvals required to permit Tembo Capital to
Orion Shares.
participate in any capital raising);
• Conversion – if Orion does not undertake a capital raising by
31 October 2020 (Repayment Date), Tembo Capital may elect
to receive Shares in repayment of the Outstanding Amount at
an issue price of the volume weighted average price of Shares
on the ASX over the ten trading days prior to the date that
Tembo Capital issues a conversion notice to Orion (subject to
shareholder and FIRB approvals);
• Repayment – if Orion does not undertake a capital raising
by the Repayment Date and Tembo Capital does not elect to
receive Shares in repayment of the Outstanding Amount by the
Repayment Date, or if all regulatory and shareholder approvals
required to permit Tembo Capital to participate in any capital
raising or to be issued Shares in repayment of the Outstanding
Amount have not been obtained by the later of the Repayment
Date and specified dates to obtain the required shareholder and
regulatory approvals, the Outstanding Amount is to be repaid
within 10 business days;
At the same time, Orion entered into an MoU with two BEE
entrepreneurs, Black Star Minerals (Pty) Ltd (Black Star) and Kolobe
Nala Investment Company (Pty) Ltd (KNI), under which they agreed
to acquire a 20% interest in PCZM, as well as a 20% interest in
Orion’s ownership interest in its Jacomynspan Project.
In July 2019, Orion concluded a Revised MoU with Black Star, KNI
and Safika Resources (Pty) Ltd (Safika) under which Safika joined
Black Star and KNI as part of the BEE consortium which would
acquire the 20% interest in PCZM and the 20% interest in Orion’s
ownership interest in its Jacomynspan Project. The BEE restructure
was finalised in November 2019 following the issue of shares in
September 2019 and November 2019.
In a simultaneous transaction, Prieska Resources acquired an
effective 20% interest in PCZM for a purchase consideration of
South African Rand (ZAR)142.78 million (~$14.45 million), with this
acquisition being vendor financed by Orion. Prieska Resources is
a BEE company whose shares are held by Black Star (17.31%),
• Security – the Loan Facility is unsecured;
KNI (37.97%) and Safika (44.72%).
• Undertakings – Orion has provided undertakings which are
The vendor finance advanced by Orion to Prieska Resources
customary for an agreement of this type, including in relation to
comprised two parts, namely:
the incurring of debt, granting of security, compliance with laws,
and operational matters; and
• a secured loan for ZAR15.29 million plus interest at South African
Prime Interest Rate, repayable within 12 months after the project
• Warranties – customary warranties for a transaction of this
finance for the Prieska Project is closed; and
nature are given each by Orion and Tembo Capital.
• preference shares in Prieska Resources issued to Orion to
As referred to above, on 7 August 2020 Orion announced a
the value of ZAR200 million which are redeemable by Prieska
$6.2 million Capital Raising. In addition to the Capital Raising,
Resources at any time after the expiry of a period of three
Tembo Capital subscribed for a further $2.1 million worth of Shares
years and one day after the date of issue of the Preference
at an issue price of $0.017 per Share, being the issue price for
Shares, and prior to the eighth anniversary of their date of
Shares issued under the Capital Raising (subject to shareholder
issue at a rate of return of 12%, failing which any of the
and FIRB approvals). Under the terms of the Loan Facility, the
preference shares held by Orion (through its subsidiary,
Outstanding Amount will be offset against the Subscription
Agama Exploration & Mining (Pty) Ltd (Agama)) remaining after
Amount. As Tembo Capital’s Subscription Amount of $2.4 million
the eighth anniversary, will be automatically converted pro rata
exceeds the Outstanding Amount, the issue of Shares to Tembo
into ordinary shares in Prieska Resources up to a maximum
Capital will therefore result in the Loan Facility being repaid in full.
of 49% of the shares in Prieska Resources or, subject to
48
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
CORPORATE continu ed
compliance with South African laws, an equivalent number of
of the Convertible Notes are set out in the Company’s ASX releases
shares directly in PCZM.
dated 8 March 2017 and 25 January 2019.
Simultaneously with the acquisition by Prieska Resources, the
Orion Siyathemba Community Trust (Prieska Community Trust)
and the Orion Siyathemba Employees Trust (Prieska Employees
Trust) each acquired an effective 5% interest in PCZM. While this
On 24 September 2019, the Company issued 222.31 million
Shares to the Noteholders on conversion of the Convertible Notes,
thereby reducing the Company’s current liabilities by $5.8 million
(as 10.38 million Convertible Notes were converted into Shares in
acquisition was for nominal consideration, in terms of prevailing
April 2019).
Mining Charter 2018 legislation, Orion and Prieska Resources will
be entitled to recover the value of the 5% shareholding acquired by
the two trusts from future project cash flows.
In September 2019, a major component of the BEE restructure
was implemented. In terms of these transactions, Mosiapoa and
Power Matla exchanged their shares in PCZM, Rich Rewards and
Bartotrax (as applicable) for 48.48 million and 37.58 million Orion
Shares respectively, at a deemed issue price of $0.0314 per Share.
Additional information as to the Company’s capital raising activities
is included in the Annual Financial Report.
Debt facilities
Conversion of Tembo Capital Loan Facility
As referred to earlier in this section, on 14 May 2020, Orion
announced that a Loan Facility has been entered into with Tembo
Capital and on 7 August 2020 Orion announced a $6.2 million
On 29 November 2019, Orion issued 47.83 million Shares in the
Capital Raising. In addition to the Capital Raising, Tembo Capital
Company at a deemed issue price of $0.0314 per Share to AEMFC
subscribed for a further $2.1 million worth of Shares, at an issue
and Mosiapoa (together, Residual BEE Investors). The Shares
price of $0.017 per Share, being the issue price for Shares
were issued to the Residual BEE Investors as consideration for
issued under the Capital Raising (subject to shareholder and
the repurchase by Vardocube of shares held by the Residual BEE
FIRB approvals). The Loan Facility Outstanding Amount will be
Investors in that company, finalising the BEE restructure.
Convertible Notes - Conversion
On 24 September 2019, the Company announced that it had
received conversion notices from all Convertible Noteholders,
requesting the conversion of the Convertible Notes held by them
into Shares.
offset against the Subscription Amount and as Tembo Capital’s
Subscription Amount of $2.4 million exceeds the Outstanding
Amount, the issue of Shares to Tembo Capital will therefore result in
the Loan Facility being repaid in full.
Tembo Capital Convertible Loan Facility
In January 2019, Orion announced that a $3.6 million unsecured
convertible Loan Facility had been agreed with Tembo Capital
A total of 232.69 million Convertible Notes to the value of
(Convertible Loan Facility). Under the terms of the Convertible Loan
$6.05 million (each with a face value of $0.026) were issued on
Facility, Tembo Capital may elect for repayment of the balance of
17 March 2017 to various sophisticated and professional investors
the Convertible Loan Facility (including capitalised interest and fees)
(Convertible Notes). The Company obtained shareholder approval
(Outstanding Loan Amount) to be satisfied by the issue of Shares
for the issue of the Convertible Notes on 13 March 2017. Key terms
by the Company to Tembo Capital at a deemed issue price of
49
ORION MINERALS ANNUAL REPORT 2020 BUSINESS REVIEW
CORPORATE co ntinue d
$0.026 per Share (subject to receipt of Shareholder approval and
• Interest: Prime lending rate in South Africa;
FIRB approval). The Outstanding Loan Amount must be repaid by
31 October 2020 (previously 25 June 2020), or if Tembo Capital
• Repayment date: 30 April 2021 (previously 31 July 2020); and
elects to receive Shares in repayment of the Outstanding Loan
• Security: 29.17% of the shares held in PCZM by Agama (a
Amount in lieu of payment in cash, the date on which the Shares
wholly owned subsidiary of Orion) have been pledged as security
are to be issued to Tembo Capital (or such later date as may be
to AASMF for the performance of PCZM’s obligations in terms of
agreed between Tembo Capital and Orion) (refer ASX release
the Loan.
25 January 2019).
The key terms of the Convertible Loan Facility are:
• Convertible Loan Facility Amount: $3.6 million;
Following year end, on 29 July 2020, the Company announced that
it has reached agreement with AASMF to extend the term of the
Loan from 31 July 2020 to 30 April 2021.
• Interest: Capitalised at 12% per annum accrued daily on the
amount drawn down;
As at 30 June 2020, the balance of the Loan was ZAR19.0 million
(~$1.6 million) (including capitalised interest).
• Repayment: Tembo Capital may elect for repayment of the
Additional information regarding the Loan is included in the Annual
Outstanding Loan Amount to be satisfied by the issue of
Financial Report.
Shares by the Company to Tembo Capital at a deemed issue
price of $0.026 per Share, subject to receipt of Shareholder
approval. The Outstanding Loan Amount must be repaid
by 31 October 2020, or if Tembo Capital elects to receive
Shares in repayment of the Outstanding Loan Amount in lieu
of payment in cash, the date on which the Shares are to be
issued to Tembo Capital (or such later date as may be agreed
between Tembo Capital and Orion);
• Establishment fee:
• Cash - capitalised 5% of the Convertible Loan Facility Amount
and capitalised 4% of the Outstanding Loan Amount as of
24 January 2020, payable on the Repayment date; and
• Options – 11 million unlisted Orion options, exercisable at a
price of $0.03 per option, expiring on 17 June 2024.
• Security: Convertible Loan Facility is unsecured.
Anglo American sefa Mining Fund – Preference Share
Redemption
On 4 March 2019, the Company announced it had reached
agreement with AASMF to redeem Preference Shares held by
AASMF in PCZM, one of Orion’s key project subsidiaries, for shares
in Orion (Share Exchange Agreement).
AASMF subscribed for 15.75 million redeemable preference shares
in PCZM in November 2015 at a subscription price of ZAR1 per
redeemable preference share (ZAR15.75 million (~$1.5 million))
(Preference Shares) as part of a seed capital investment with the
previous owners of the Prieska Project.
Under the terms of the Share Exchange Agreement and following
the receipt of Orion shareholder approval at a general meeting
held on 7 June 2019, on 7 July 2019, PCZM voluntarily redeemed
the Preference Shares in consideration for Orion issuing the
As at 30 June 2020, the balance of the Convertible Loan Facility
Shares to AASMF.
was $4.58 million (including capitalised interest and fees).
Additional information as to the Convertible Loan Facility forms
part of the Annual Financial Report.
Anglo American sefa Mining Fund – Loan
On 2 November 2015, PCZM (a 70%-owned subsidiary of Orion)
and Anglo American sefa Mining Fund (AASMF) entered into a
ZAR14.25 million loan agreement for the further exploration and
development of the Prieska Project (Loan). Under the terms of
the Loan, on 1 August 2017, AASMF advanced ZAR14.25 million
to PCZM.
The key terms of the Loan are:
• Loan amount: ZAR14.25 million (~$1.2 million);
In satisfaction of the redemption amount payable by PCZM to
AASMF of ZAR25.05 million (~$2.5 million), in connection with the
voluntary redemption of the Preference Shares by PCZM, on
5 July 2019, Orion issued 77.57 million Shares to AASMF at a
deemed issue price of $0.0323 per Share.
Jacomynspan Project
Following year end, on 13 July 2020 the Company announced that
it has entered into an agreement whereby Orion (or its nominated
subsidiary) will acquire the remaining minority interests in the
Jacomynspan Nickel-Copper-PGE Project (South Africa) (Jacomynspan
Project) held by two companies, Namaqua Nickel Mining (Pty) Ltd
(Namaqua) and Disawell (Pty) Ltd (Disawell) (Agreement).
50
ORION MINERALS ANNUAL REPORT 2020
BUSINESS REVIEW
CORPORATE continu ed
In September 2017, Orion entered into a binding earn-in agreement
to acquire the earn-in rights over the Jacomynspan Project held by
Namaqua and Disawell.
Orion’s earn-in is held via its wholly-owned subsidiary company,
Areachap Investments 3 S.À R.L, and its South African subsidiary
company, Area Metals Holdings No 3 (Pty) Ltd (AMH3).
Since finalising the earn-in agreement, AMH3 has advanced
exploration programs on the Jacomynspan Project, with
expenditure held in a shareholder loan account and AMH3 having
reached an earn-in right stage. This will see its shareholding
increase by a further 25% interest (increasing its total interest to
50%). Upon receipt of regulatory approval, AMH3 will be issued
with the additional shares earned. Orion is the manager and
operator of the joint venture.
The key terms of the Sale Agreement are:
• Purchase Assets
• Orion will acquire all of the:
• Remaining issued shares in Namaqua and Disawell held by
the Namaqua and Disawell minority shareholders (Selling
Shareholders); and
• Claims of any nature which any of the Selling Shareholders
may have against either Namaqua and/or Disawell, including
(without limitation) the Shareholders’ loans held by each
Selling Shareholder and the founders’ royalty held by each
founding Shareholder (collectively, Sale Equity).
• Purchase Price
• The purchase price payable by Orion to the Selling
Shareholders for the Sale Equity will be a total amount of
$0.75 million (Purchase Price);
• The Purchase Price will be settled by way of Orion issuing
its Shares to each Selling Shareholder (Consideration Shares),
where:
• The Purchase Price will be converted into ZAR at the
average ZAR/AUD exchange rate in the 30 days prior to the
date on which the last of the Suspensive Conditions (refer
below) is fulfilled (Fulfilment Date); and
• The issue price of the Consideration Shares will be equal
to the 30-day volume weighted average price of the Orion
Shares traded on the Johannesburg Stock Exchange as at
the Fulfilment Date.
• The Consideration Shares will be issued by Orion to the Selling
Shareholders within 10 business days after the Fulfilment Date
(Closing Date) against the transfer of the Sale Equity to Orion.
• Suspensive Conditions
• Orion and the Selling Shareholders (Sale Parties) entering into
comprehensive formal written agreement/s incorporating the
principal terms and conditions set out in the Offer Letter and
such other terms and conditions as are usual for a transaction
of this nature (Sale Agreement);
• Approval and/or ratification of the Sale Agreement and the
implementation of the proposed transaction by the board of
directors or trustees (if and where applicable) of each the
Sale Parties;
• Approval, where required, from Orion’s shareholders for the
proposed transaction;
• Receipt of any and all regulatory approvals (on terms
reasonably acceptable to the Sale Parties) as may be
required for the purposes of implementing the proposed
transaction; and
• There being no material adverse change in the business,
operations, assets, compliance, position (financial, trading
or otherwise) or prospects of either Namaqua or Disawell
between the date of signature of the Sale Agreement and the
Closing Date.
• Such other suspensive conditions, undertakings, warranties and
terms and conditions as would be standard and customary to
include in transactions of this nature.
51
ORION MINERALS ANNUAL REPORT 2020 FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Directors’ Report
Directors’ Report
Your directors submit their report for the year ended 30 June 2020.
Your directors submit their report for the year ended 30 June 2020.
BOARD OF DIRECTORS
BOARD OF DIRECTORS
Director
Director
Designation
Designation
Qualifications, experience and expertise
Qualifications, experience and expertise
Non-
executive
Chairman
Non-
executive
Chairman
Mr Denis
Waddell
Mr Denis
Waddell
Appointed
Appointed
27 February
27 February
2009
2009
ACA, FAICD
ACA, FAICD
Mr Waddell is a Chartered Accountant with extensive experience in
Mr Waddell is a Chartered Accountant with extensive experience in
the management of exploration and mining companies. Mr
the management of exploration and mining companies. Mr
Waddell founded Tanami Gold NL in 1994 and was involved with the
Waddell founded Tanami Gold NL in 1994 and was involved with the
Company as Managing Director and then Chairman and Non-
Company as Managing Director and then Chairman and Non-
Executive Director until 2012. Prior to founding Tanami Gold NL, Mr
Executive Director until 2012. Prior to founding Tanami Gold NL, Mr
Waddell was the Finance Director of the Metana Minerals NL group.
Waddell was the Finance Director of the Metana Minerals NL group.
During the past 36 years, Mr Waddell has gained considerable
experience in corporate finance and operations management of
exploration and mining companies.
During the past 36 years, Mr Waddell has gained considerable
experience in corporate finance and operations management of
exploration and mining companies.
Mr Errol
Mr Errol
Smart
Smart
Managing
Managing
Director
Director
Appointed
26
November
2012
Appointed
26
November
2012
Mr Thomas
Mr Thomas
Borman
Borman
Appointed
Appointed
16 April 2019
16 April 2019
Non-
Non-
executive
executive
Director
Director
BSc(Hons) Geology (University of Witwatersrand)
BSc(Hons) Geology (University of Witwatersrand)
None
None
NHD Economic Geology (Technikon Witwatersrand)
NHD Economic Geology (Technikon Witwatersrand)
(PrSciNat)
(PrSciNat)
Mr Smart is a geologist, registered with the South African Council of
Natural Scientific Professionals, a Recognised Overseas Professional
Organisation in terms of the 2012 Edition of the Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves (JORC) purposes. Mr Smart has 27 years of industry
experience across all aspects of exploration, mine development
and operations with experience in precious and base metals. Mr
Smart has held positions in Anglogold, Cluff Mining, Metallon Gold,
Clarity Minerals LionGold Corporation and African Stellar
Holdings. Mr Smart’s senior executive roles have been on several
boards of companies listed on both the TSX and ASX and currently
serves as a Director on the Board of the Mineral Council of South
Africa.
Mr Smart is a geologist, registered with the South African Council of
Natural Scientific Professionals, a Recognised Overseas Professional
Organisation in terms of the 2012 Edition of the Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves (JORC) purposes. Mr Smart has 27 years of industry
experience across all aspects of exploration, mine development
and operations with experience in precious and base metals. Mr
Smart has held positions in Anglogold, Cluff Mining, Metallon Gold,
Clarity Minerals LionGold Corporation and African Stellar
Holdings. Mr Smart’s senior executive roles have been on several
boards of companies listed on both the TSX and ASX and currently
serves as a Director on the Board of the Mineral Council of South
Africa.
BCom (Hons) (University of Pretoria)
BCom (Hons) (University of Pretoria)
None
None
Mr Borman is a respected and highly experienced global mining
executive who served more than 11 years working for the BHP Billiton
Group in various senior managerial roles, including that of Chief
Financial Officer of an Australian-listed mining company. He also
held senior roles in strategy and business development, and served
as the project manager for the merger integration transaction
between BHP Limited and Billiton.
Mr Borman is a respected and highly experienced global mining
executive who served more than 11 years working for the BHP Billiton
Group in various senior managerial roles, including that of Chief
Financial Officer of an Australian-listed mining company. He also
held senior roles in strategy and business development, and served
as the project manager for the merger integration transaction
between BHP Limited and Billiton.
After leaving BHP Billiton in 2006, Mr Borman joined Warrior Coal
After leaving BHP Billiton in 2006, Mr Borman joined Warrior Coal
Investments (Proprietary) Limited, where he formed part of the
Investments (Proprietary) Limited, where he formed part of the
executive team which established and consolidated the portfolio of
executive team which established and consolidated the portfolio of
assets which became the Optimum Group of companies. Optimum
assets which became the Optimum Group of companies. Optimum
listed on the Johannesburg Stock Exchange in 2010, and was
listed on the Johannesburg Stock Exchange in 2010, and was
subsequently acquired by Glencore for R8.5 billion in March 2012.
subsequently acquired by Glencore for R8.5 billion in March 2012.
52
Directorships
Directorships
of other listed
of other listed
companies
companies
Other roles
Other roles
held during
held during
the year
the year
None
None
Member of
Member of
the Audit
the Audit
Committee
Committee
Chief
Chief
Executive
Executive
Officer
Officer
Member of
Member of
the Audit
the Audit
Committee
Committee
---
---
ORION MINERALS ANNUAL REPORT 2020
Directors’ Report
Directors’ Report
BOARD OF DIRECTORS
BOARD OF DIRECTORS
Your directors submit their report for the year ended 30 June 2020.
Your directors submit their report for the year ended 30 June 2020.
Directorships
Directorships
Other roles
Other roles
of other listed
of other listed
held during
held during
companies
companies
the year
the year
None
None
Non-
Non-
ACA, FAICD
ACA, FAICD
executive
executive
Chairman
Chairman
Mr Denis
Mr Denis
Waddell
Waddell
Appointed
Appointed
27 February
27 February
2009
2009
Mr Waddell is a Chartered Accountant with extensive experience in
Mr Waddell is a Chartered Accountant with extensive experience in
the management of exploration and mining companies. Mr
the management of exploration and mining companies. Mr
Waddell founded Tanami Gold NL in 1994 and was involved with the
Waddell founded Tanami Gold NL in 1994 and was involved with the
Company as Managing Director and then Chairman and Non-
Company as Managing Director and then Chairman and Non-
Executive Director until 2012. Prior to founding Tanami Gold NL, Mr
Executive Director until 2012. Prior to founding Tanami Gold NL, Mr
Waddell was the Finance Director of the Metana Minerals NL group.
Waddell was the Finance Director of the Metana Minerals NL group.
During the past 36 years, Mr Waddell has gained considerable
During the past 36 years, Mr Waddell has gained considerable
experience in corporate finance and operations management of
experience in corporate finance and operations management of
exploration and mining companies.
exploration and mining companies.
Managing
Managing
BSc(Hons) Geology (University of Witwatersrand)
BSc(Hons) Geology (University of Witwatersrand)
None
None
Director
Director
NHD Economic Geology (Technikon Witwatersrand)
NHD Economic Geology (Technikon Witwatersrand)
(PrSciNat)
(PrSciNat)
Mr Errol
Mr Errol
Smart
Smart
Appointed
Appointed
26
26
November
November
2012
2012
Mr Thomas
Mr Thomas
Non-
Non-
BCom (Hons) (University of Pretoria)
BCom (Hons) (University of Pretoria)
None
None
Borman
Borman
Appointed
Appointed
16 April 2019
16 April 2019
executive
executive
Director
Director
Mr Smart is a geologist, registered with the South African Council of
Mr Smart is a geologist, registered with the South African Council of
Natural Scientific Professionals, a Recognised Overseas Professional
Natural Scientific Professionals, a Recognised Overseas Professional
Organisation in terms of the 2012 Edition of the Australasian Code
Organisation in terms of the 2012 Edition of the Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves (JORC) purposes. Mr Smart has 27 years of industry
Reserves (JORC) purposes. Mr Smart has 27 years of industry
experience across all aspects of exploration, mine development
experience across all aspects of exploration, mine development
and operations with experience in precious and base metals. Mr
and operations with experience in precious and base metals. Mr
Smart has held positions in Anglogold, Cluff Mining, Metallon Gold,
Smart has held positions in Anglogold, Cluff Mining, Metallon Gold,
Clarity Minerals LionGold Corporation and African Stellar
Clarity Minerals LionGold Corporation and African Stellar
Holdings. Mr Smart’s senior executive roles have been on several
Holdings. Mr Smart’s senior executive roles have been on several
boards of companies listed on both the TSX and ASX and currently
boards of companies listed on both the TSX and ASX and currently
serves as a Director on the Board of the Mineral Council of South
serves as a Director on the Board of the Mineral Council of South
Africa.
Africa.
Mr Borman is a respected and highly experienced global mining
Mr Borman is a respected and highly experienced global mining
executive who served more than 11 years working for the BHP Billiton
executive who served more than 11 years working for the BHP Billiton
Group in various senior managerial roles, including that of Chief
Group in various senior managerial roles, including that of Chief
Financial Officer of an Australian-listed mining company. He also
Financial Officer of an Australian-listed mining company. He also
held senior roles in strategy and business development, and served
held senior roles in strategy and business development, and served
as the project manager for the merger integration transaction
as the project manager for the merger integration transaction
between BHP Limited and Billiton.
between BHP Limited and Billiton.
After leaving BHP Billiton in 2006, Mr Borman joined Warrior Coal
After leaving BHP Billiton in 2006, Mr Borman joined Warrior Coal
Investments (Proprietary) Limited, where he formed part of the
Investments (Proprietary) Limited, where he formed part of the
executive team which established and consolidated the portfolio of
executive team which established and consolidated the portfolio of
assets which became the Optimum Group of companies. Optimum
assets which became the Optimum Group of companies. Optimum
listed on the Johannesburg Stock Exchange in 2010, and was
listed on the Johannesburg Stock Exchange in 2010, and was
subsequently acquired by Glencore for R8.5 billion in March 2012.
subsequently acquired by Glencore for R8.5 billion in March 2012.
Member of
Member of
the Audit
the Audit
Committee
Committee
Chief
Chief
Executive
Executive
Officer
Officer
Member of
Member of
the Audit
the Audit
Committee
Committee
---
---
Director
Director
Designation
Designation
Qualifications, experience and expertise
Qualifications, experience and expertise
Director
Designation
Qualifications, experience and expertise
Directorships
of other listed
companies
Other roles
held during
the year
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Directors’ Report (continued)
Mr Godfrey
Gomwe
Appointed
16 April 2019
Non-
executive
Director
Non-
executive
Director
Mr
Alexander
Haller
Appointed
27 February
2009
Non-
executive
Director
Mr Mark
Palmer
Appointed
31 January
2018
Bachelor Accountancy (Hons) (University of Zimbabwe)
AECI limited
Econet
Wireless
Zimbabwe
Limited
Masters Business Leadership (University of South Africa)
CA (Zimbabwe)
Mr Gomwe has extensive experience as an executive in metals and
mining industries. Mr Gomwe is the former Chief Executive Officer of
Anglo American plc’s Thermal Coal business, whose responsibilities
included oversight over Anglo’s Manganese interests in the joint
venture with BHP.
Previously Executive Director of Anglo American South Africa until
August 2012, Mr Gomwe’s Anglo American career included roles as
Head of Group Business Development Africa, Finance Director and
Chief Operating Officer of Anglo American South Africa and
Chairman and Chief Executive of Anglo American Zimbabwe
Limited. Mr Gomwe also served on a number of its Executive
Committees and Operating Boards which included Kumba Iron Ore,
Anglo American Platinum, Highveld Steel & Vanadium and Mondi
South Africa, the latter two in the capacity of Chairman.
BSc Economics
UMS Limited
Mr Haller is a partner of Zachary Capital Management, providing
advisory services to a number of private investment companies,
including Silja Investment Ltd, focusing on the principal investment
activities for these companies. From 2001 to 2007 Mr Haller worked
in the corporate finance division at JP Morgan in the U.S, advising
on corporate mergers and acquisitions as well as financing in both
the equity and debt capital markets.
BSc Mining Geology (Cardiff University)
None
Mr Palmer has 14 years’ experience working with entities in Australia,
including 8 years with Dominion Mining. In 1994 Mr Palmer joined NM
Rothschild & Sons Limited in the London mining project finance team
assessing mines and projects globally. In 1997, Mr Palmer moved to
the investment banking team at UBS to focus on global mergers and
acquisitions, equity and debt financing in the mining sector. Mr
Palmer ran the EMEA mining team at UBS for 8 years. Mr Palmer
joined Tembo Capital as Investment Director in 2015.
Chairman
of the Audit
Committee
Member of
the Audit
Committee
---
53
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Directors’ Report (continued)
Directors’ Report (continued)
COMPANY SECRETARY
COMPANY SECRETARY
The name and details of the Company Secretary in office during the financial year and until the date of this
report is as follows:
The name and details of the Company Secretary in office during the financial year and until the date of this
report is as follows:
Name
Name
Experience and qualifications
Experience and qualifications
Mr Martin
Mr Martin
Bouwmeester
Bouwmeester
Company
Company
Secretary
Secretary
(Appointed 1 April
(Appointed 1 April
2016)
2016)
Mr Bouwmeester is an FCPA highly experienced in exploration, mine development
Mr Bouwmeester is an FCPA highly experienced in exploration, mine development
and operations and was Chief Financial Officer, Company Secretary and Business
and operations and was Chief Financial Officer, Company Secretary and Business
Development Manager of Perseverance Corporation Limited. Mr Bouwmeester was
Development Manager of Perseverance Corporation Limited. Mr Bouwmeester was
a key member of the team that evaluated the sulphide mineralisation at the Fosterville
a key member of the team that evaluated the sulphide mineralisation at the Fosterville
Gold Mine; an initiative that led to the discovery and definition of more than 3M
Gold Mine; an initiative that led to the discovery and definition of more than 3M
ounces of gold and the funding for the development of the mine and processing
ounces of gold and the funding for the development of the mine and processing
plant to exploit those resources. Mr Bouwmeester also holds the position of Chief
plant to exploit those resources. Mr Bouwmeester also holds the position of Chief
Financial Officer with the Group.
Financial Officer with the Group.
CORPORATE STRUCTURE
CORPORATE STRUCTURE
Orion Minerals Ltd (Orion or Company) is a company limited by shares that is incorporated and domiciled in
Australia. The Company has prepared a consolidated financial report incorporating the entities that it
controlled during the financial year, including those newly acquired (referred to as the Group).
Orion Minerals Ltd (Orion or Company) is a company limited by shares that is incorporated and domiciled in
Australia. The Company has prepared a consolidated financial report incorporating the entities that it
controlled during the financial year, including those newly acquired (referred to as the Group).
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was exploration, evaluation and development of base metal,
gold and platinum-group element projects in South Africa (Areachap Belt, Northern Cape). The Company also
holds interests in the Fraser Range Nickel-Copper and Gold Project in Western Australia and the Walhalla Project
in Victoria, Australia. There were no significant changes in the nature of the Group’s principal activities during
the year.
The principal activity of the Group during the year was exploration, evaluation and development of base metal,
gold and platinum-group element projects in South Africa (Areachap Belt, Northern Cape). The Company also
holds interests in the Fraser Range Nickel-Copper and Gold Project in Western Australia and the Walhalla Project
in Victoria, Australia. There were no significant changes in the nature of the Group’s principal activities during
the year.
Corporate
Corporate
Results of operations – the Group
Results of operations – the Group
The Group recorded a loss of $18.65M (2019: $10.75M) after tax for the year. The result is driven primarily by a
The Group recorded a loss of $18.65M (2019: $10.75M) after tax for the year. The result is driven primarily by a
$9.96M unrealised foreign exchange loss, exploration expenditure incurred of $2.17M which, under the Group’s
$9.96M unrealised foreign exchange loss, exploration expenditure incurred of $2.17M which, under the Group’s
deferred exploration, evaluation and development policy, did not qualify to be capitalised and was expensed
deferred exploration, evaluation and development policy, did not qualify to be capitalised and was expensed
and finance expenses of $1.3M, principally related to interest on loans.
and finance expenses of $1.3M, principally related to interest on loans.
Net cash used in operating activities and investing activities totalled $13.83M (2019: $18.78M) and included
payments for exploration and evaluation of $9.81M (2019: $15.06M). The Group continues to focus strongly on
the development of its Prieska Copper-Zinc Project in South Africa’s Areachap geological terrane, Northern
Cape (Prieska Project) and exploration within its Areachap Projects, South Africa. Net cash from financing
activities totalled $14.02M (2019: $15.45M).
Net cash used in operating activities and investing activities totalled $13.83M (2019: $18.78M) and included
payments for exploration and evaluation of $9.81M (2019: $15.06M). The Group continues to focus strongly on
the development of its Prieska Copper-Zinc Project in South Africa’s Areachap geological terrane, Northern
Cape (Prieska Project) and exploration within its Areachap Projects, South Africa. Net cash from financing
activities totalled $14.02M (2019: $15.45M).
Cash on hand at the end of the year was $1.2M (2019: $1.4M).
Cash on hand at the end of the year was $1.2M (2019: $1.4M).
The basic loss per share for the Group for the year was 0.66 cents and diluted loss per share for the Group for
the year was 0.66 cents (2019: loss per share 0.53 cents and diluted loss per share 0.53 cents). No dividend has
been paid during or is recommended for the financial year ended 30 June 2020.
The basic loss per share for the Group for the year was 0.66 cents and diluted loss per share for the Group for
the year was 0.66 cents (2019: loss per share 0.53 cents and diluted loss per share 0.53 cents). No dividend has
been paid during or is recommended for the financial year ended 30 June 2020.
Business Strategies
The Company will continue to focus on exploration, evaluation and development of base metal, gold and
platinum-group element projects in South Africa (Areachap Belt, Northern Cape).
Business Strategies
The Company will continue to focus on exploration, evaluation and development of base metal, gold and
platinum-group element projects in South Africa (Areachap Belt, Northern Cape).
Risks to the Business
Risks to the business are rated on the basis of their potential impact on the Group as a whole after taking into
account current mitigating actions. Investors should be aware that the below list is not an exhaustive list and
that there are a number of other risks associated with an investment in the Company. The Group regularly
reviews the possible impact of these risks and seeks to minimise their impact through its internal controls, risk
management policy, and corporate governance. The following describes the principal risks and uncertainties
that could materially impact the Group:
Risks to the Business
Risks to the business are rated on the basis of their potential impact on the Group as a whole after taking into
account current mitigating actions. Investors should be aware that the below list is not an exhaustive list and
that there are a number of other risks associated with an investment in the Company. The Group regularly
reviews the possible impact of these risks and seeks to minimise their impact through its internal controls, risk
management policy, and corporate governance. The following describes the principal risks and uncertainties
that could materially impact the Group:
54
ORION MINERALS ANNUAL REPORT 2020
Directors’ Report (continued)
COMPANY SECRETARY
report is as follows:
Name
Experience and qualifications
The name and details of the Company Secretary in office during the financial year and until the date of this
Mr Martin
Bouwmeester
Company
Secretary
Mr Bouwmeester is an FCPA highly experienced in exploration, mine development
and operations and was Chief Financial Officer, Company Secretary and Business
Development Manager of Perseverance Corporation Limited. Mr Bouwmeester was
a key member of the team that evaluated the sulphide mineralisation at the Fosterville
(Appointed 1 April
Gold Mine; an initiative that led to the discovery and definition of more than 3M
2016)
ounces of gold and the funding for the development of the mine and processing
plant to exploit those resources. Mr Bouwmeester also holds the position of Chief
Financial Officer with the Group.
CORPORATE STRUCTURE
Orion Minerals Ltd (Orion or Company) is a company limited by shares that is incorporated and domiciled in
Australia. The Company has prepared a consolidated financial report incorporating the entities that it
controlled during the financial year, including those newly acquired (referred to as the Group).
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was exploration, evaluation and development of base metal,
gold and platinum-group element projects in South Africa (Areachap Belt, Northern Cape). The Company also
holds interests in the Fraser Range Nickel-Copper and Gold Project in Western Australia and the Walhalla Project
in Victoria, Australia. There were no significant changes in the nature of the Group’s principal activities during
the year.
Corporate
Results of operations – the Group
The Group recorded a loss of $18.65M (2019: $10.75M) after tax for the year. The result is driven primarily by a
$9.96M unrealised foreign exchange loss, exploration expenditure incurred of $2.17M which, under the Group’s
deferred exploration, evaluation and development policy, did not qualify to be capitalised and was expensed
and finance expenses of $1.3M, principally related to interest on loans.
Net cash used in operating activities and investing activities totalled $13.83M (2019: $18.78M) and included
payments for exploration and evaluation of $9.81M (2019: $15.06M). The Group continues to focus strongly on
the development of its Prieska Copper-Zinc Project in South Africa’s Areachap geological terrane, Northern
Cape (Prieska Project) and exploration within its Areachap Projects, South Africa. Net cash from financing
activities totalled $14.02M (2019: $15.45M).
Cash on hand at the end of the year was $1.2M (2019: $1.4M).
The basic loss per share for the Group for the year was 0.66 cents and diluted loss per share for the Group for
FINANCIAL STATEMENTS
the year was 0.66 cents (2019: loss per share 0.53 cents and diluted loss per share 0.53 cents). No dividend has
DIRECTORS’ REPORT co ntinued
been paid during or is recommended for the financial year ended 30 June 2020.
Business Strategies
The Company will continue to focus on exploration, evaluation and development of base metal, gold and
platinum-group element projects in South Africa (Areachap Belt, Northern Cape).
Risks to the Business
Risks to the business are rated on the basis of their potential impact on the Group as a whole after taking into
account current mitigating actions. Investors should be aware that the below list is not an exhaustive list and
that there are a number of other risks associated with an investment in the Company. The Group regularly
reviews the possible impact of these risks and seeks to minimise their impact through its internal controls, risk
Directors’ Report (continued)
management policy, and corporate governance. The following describes the principal risks and uncertainties
that could materially impact the Group:
• Capital – Each of the Group’s key exploration targets remain in the exploration and evaluation phase.
Future exploration programs require substantial levels of expenditure to ensure that Group’s tenements
are held in good standing. The Group is currently reliant on the capital and debt markets to fund its
ongoing operations and therefore any unforeseeable events in these markets may impact the Group’s
ability to finance its future exploration projects;
•
•
•
•
•
Sovereign risk – The Group’s exploration, evaluation and development activities are carried out in South
Africa and Australia. As a result, the Group is subject to political, social, economic and other
uncertainties including, but not limited to, changes in policies or the personnel administering them,
foreign exchange restrictions, changes of law affecting foreign ownership, currency fluctuations,
royalties and tax increases in that country. Other potential issues contributing to uncertainty such as
repatriation of income, exploration licensing, environmental protection and government control over
mineral properties should also be considered. Potential risk to the Group’s activities may occur if there
are changes to the political, legal and fiscal systems which might affect the ownership and operation
of the Group’s interests in South Africa. This may also include changes in exchange control systems,
expropriation of mining rights, changes in government and in legislative and regulatory regimes.
Title risk – One of the Group’s key projects, being the Prieska Project and exploration projects in the
Areachap Belt, are located in the Northern Cape of South Africa. Interests in tenements in South Africa
are governed by legislation and are evidenced by the granting of mining or prospecting rights. The
Company also has an interest in several Australian exploration tenements. Interests in Australian
tenements held by the Group are governed by Federal and State legislation and are evidenced by the
granting of mining or exploration licences. These tenements are subject to periodic review and
compliance, including the relinquishment of certain areas. As a result, there is no guarantee that these
areas of interest will be renewed in the future or if there will be sufficient funds available to meet the
attaching minimum expenditure commitments when they arise.
Title risk and Native Title – It is also possible that in relation to the Australian tenements which the Group
has an interest in or will in the future acquire such an interest, there may be areas over which legitimate
common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of
the Group to gain access to tenements (through obtaining consent of any relevant landowner), or to
progress from the exploration phase to the development and mining phases of operations may be
adversely affected.
Resources and Reserve estimates – There are inherent uncertainties in estimating reserve and resource
estimates as it requires significant subjective judgements and determinations based on the available
geological, technical, and economic information. Estimates and assumptions that were previously valid
may change significantly when new information or techniques become available and therefore may
require restatement.
Rehabilitation – The Group is required to close its operations and rehabilitate the lands that it disturbs
during the exploration and operating phases in accordance with applicable mining and environmental
laws and regulations. At the Prieska Project, a closure plan and estimate of closure and rehabilitation
liabilities for prospecting activity has been prepared. These estimates of closure and rehabilitation
liabilities are based on current knowledge and assumptions, however actual costs at the time of closure
and rehabilitation may vary materially. In addition, adverse or deteriorating external economic
conditions may bring forward closure and rehabilitation costs. The Group’s intention is to conduct its
exploration and operating activities to the highest level of environmental obligations, however there
are certain risks inherent in the Group’s activities which could subject the Group to future liabilities.
Impact of COVID-19
On 11 March 2020, the World Health Organisation (WHO) declared the COVID-19 outbreak as a pandemic. The
Company’s operations, particularly in South Africa, have been, and continue to be, impacted.
Considering the volatile and uncertain global economic and investment outlook, in order to safeguard the
health and safety of its members and the wider community, the Company undertook the following actions:
•
•
55
Implemented work-from-home protocols (wherever possible) from 13 March 2020. The Company
continues to work closely with relevant authorities and key stakeholders to minimise risk and harm for
all;
Implemented strict COVID-19 risk identification, management and tracking protocols for all individuals
at the company’s South African offices and mine site (where physical presence was required), in
alignment with government regulations;
Directors’ Report (continued)
COMPANY SECRETARY
report is as follows:
Name
Experience and qualifications
The name and details of the Company Secretary in office during the financial year and until the date of this
Mr Martin
Bouwmeester
Company
Secretary
Mr Bouwmeester is an FCPA highly experienced in exploration, mine development
and operations and was Chief Financial Officer, Company Secretary and Business
Development Manager of Perseverance Corporation Limited. Mr Bouwmeester was
a key member of the team that evaluated the sulphide mineralisation at the Fosterville
(Appointed 1 April
Gold Mine; an initiative that led to the discovery and definition of more than 3M
2016)
ounces of gold and the funding for the development of the mine and processing
plant to exploit those resources. Mr Bouwmeester also holds the position of Chief
Financial Officer with the Group.
CORPORATE STRUCTURE
Orion Minerals Ltd (Orion or Company) is a company limited by shares that is incorporated and domiciled in
Australia. The Company has prepared a consolidated financial report incorporating the entities that it
controlled during the financial year, including those newly acquired (referred to as the Group).
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was exploration, evaluation and development of base metal,
gold and platinum-group element projects in South Africa (Areachap Belt, Northern Cape). The Company also
holds interests in the Fraser Range Nickel-Copper and Gold Project in Western Australia and the Walhalla Project
in Victoria, Australia. There were no significant changes in the nature of the Group’s principal activities during
the year.
Corporate
Results of operations – the Group
The Group recorded a loss of $18.65M (2019: $10.75M) after tax for the year. The result is driven primarily by a
$9.96M unrealised foreign exchange loss, exploration expenditure incurred of $2.17M which, under the Group’s
deferred exploration, evaluation and development policy, did not qualify to be capitalised and was expensed
and finance expenses of $1.3M, principally related to interest on loans.
Net cash used in operating activities and investing activities totalled $13.83M (2019: $18.78M) and included
payments for exploration and evaluation of $9.81M (2019: $15.06M). The Group continues to focus strongly on
the development of its Prieska Copper-Zinc Project in South Africa’s Areachap geological terrane, Northern
Cape (Prieska Project) and exploration within its Areachap Projects, South Africa. Net cash from financing
activities totalled $14.02M (2019: $15.45M).
Cash on hand at the end of the year was $1.2M (2019: $1.4M).
The basic loss per share for the Group for the year was 0.66 cents and diluted loss per share for the Group for
the year was 0.66 cents (2019: loss per share 0.53 cents and diluted loss per share 0.53 cents). No dividend has
been paid during or is recommended for the financial year ended 30 June 2020.
The Company will continue to focus on exploration, evaluation and development of base metal, gold and
platinum-group element projects in South Africa (Areachap Belt, Northern Cape).
Business Strategies
Risks to the Business
Risks to the business are rated on the basis of their potential impact on the Group as a whole after taking into
account current mitigating actions. Investors should be aware that the below list is not an exhaustive list and
that there are a number of other risks associated with an investment in the Company. The Group regularly
reviews the possible impact of these risks and seeks to minimise their impact through its internal controls, risk
management policy, and corporate governance. The following describes the principal risks and uncertainties
that could materially impact the Group:
ORION MINERALS ANNUAL REPORT 2020
Directors’ Report (continued)
• Capital – Each of the Group’s key exploration targets remain in the exploration and evaluation phase.
Future exploration programs require substantial levels of expenditure to ensure that Group’s tenements
are held in good standing. The Group is currently reliant on the capital and debt markets to fund its
ongoing operations and therefore any unforeseeable events in these markets may impact the Group’s
ability to finance its future exploration projects;
•
Sovereign risk – The Group’s exploration, evaluation and development activities are carried out in South
Africa and Australia. As a result, the Group is subject to political, social, economic and other
uncertainties including, but not limited to, changes in policies or the personnel administering them,
foreign exchange restrictions, changes of law affecting foreign ownership, currency fluctuations,
royalties and tax increases in that country. Other potential issues contributing to uncertainty such as
repatriation of income, exploration licensing, environmental protection and government control over
mineral properties should also be considered. Potential risk to the Group’s activities may occur if there
are changes to the political, legal and fiscal systems which might affect the ownership and operation
of the Group’s interests in South Africa. This may also include changes in exchange control systems,
expropriation of mining rights, changes in government and in legislative and regulatory regimes.
•
Title risk – One of the Group’s key projects, being the Prieska Project and exploration projects in the
Areachap Belt, are located in the Northern Cape of South Africa. Interests in tenements in South Africa
are governed by legislation and are evidenced by the granting of mining or prospecting rights. The
Company also has an interest in several Australian exploration tenements. Interests in Australian
tenements held by the Group are governed by Federal and State legislation and are evidenced by the
granting of mining or exploration licences. These tenements are subject to periodic review and
compliance, including the relinquishment of certain areas. As a result, there is no guarantee that these
areas of interest will be renewed in the future or if there will be sufficient funds available to meet the
attaching minimum expenditure commitments when they arise.
Title risk and Native Title – It is also possible that in relation to the Australian tenements which the Group
has an interest in or will in the future acquire such an interest, there may be areas over which legitimate
common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of
the Group to gain access to tenements (through obtaining consent of any relevant landowner), or to
progress from the exploration phase to the development and mining phases of operations may be
adversely affected.
Resources and Reserve estimates – There are inherent uncertainties in estimating reserve and resource
estimates as it requires significant subjective judgements and determinations based on the available
geological, technical, and economic information. Estimates and assumptions that were previously valid
may change significantly when new information or techniques become available and therefore may
require restatement.
•
•
•
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Rehabilitation – The Group is required to close its operations and rehabilitate the lands that it disturbs
during the exploration and operating phases in accordance with applicable mining and environmental
laws and regulations. At the Prieska Project, a closure plan and estimate of closure and rehabilitation
liabilities for prospecting activity has been prepared. These estimates of closure and rehabilitation
liabilities are based on current knowledge and assumptions, however actual costs at the time of closure
and rehabilitation may vary materially. In addition, adverse or deteriorating external economic
conditions may bring forward closure and rehabilitation costs. The Group’s intention is to conduct its
exploration and operating activities to the highest level of environmental obligations, however there
are certain risks inherent in the Group’s activities which could subject the Group to future liabilities.
Impact of COVID-19
On 11 March 2020, the World Health Organisation (WHO) declared the COVID-19 outbreak as a pandemic. The
Company’s operations, particularly in South Africa, have been, and continue to be, impacted.
Considering the volatile and uncertain global economic and investment outlook, in order to safeguard the
health and safety of its members and the wider community, the Company undertook the following actions:
•
Implemented work-from-home protocols (wherever possible) from 13 March 2020. The Company
continues to work closely with relevant authorities and key stakeholders to minimise risk and harm for
all;
•
Directors’ Report (continued)
Implemented strict COVID-19 risk identification, management and tracking protocols for all individuals
at the company’s South African offices and mine site (where physical presence was required), in
alignment with government regulations;
•
Implemented cost savings and asset preservation initiatives across the business. All work sites were
closed and secured, and staff and contractors sent home until further notice; and
• Monitoring and use of published guidelines from the Minerals Council of South Africa on the prevention
of the spread of COVID-19. The Council’s guidelines and support materials are generated from
materials issued by the WHO and the National Institute for Communicable Diseases in South Africa.
The Company will continue to monitor and implement changes to operations, as per statutory regulations and
recommendations, as announced by both the Australian and South African Governments and the Minerals
Council of South Africa.
It is not possible to adequately estimate the effect this pandemic will have on the financial position and results
of the Company in future periods.
SUBESQUENT EVENTS AFTER THE BALANCE DATE
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to
affect the operations of the Group, the results of those operations or the state of affairs of the Group in
subsequent financial years except for those matters referred to below:
• On 13 July 2020, the Company announced that it has entered into an agreement whereby Orion (or its
nominated subsidiary) will acquire the remaining minority interests in the Jacomynspan Nickel-Copper-
PGE Project (South Africa) held by two companies, Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty)
Ltd.
• On 29 July 2020, the Company announced that it had reached agreement with Anglo American sefa
Mining Fund (AASMF) to extend the term of the loan facility entered into between the Company and
AASMF whereby AASMF loaned ZAR14.25M to Orion, from 31 July 2020 to 30 April 2021.
• On 7 August 2020 the Company announced a strongly supported $6.2M capital raising. The raising,
comprising the issue of 365M Shares at an issue price of $0.017 per ordinary share (Share), to be
conducted via a placement to sophisticated and professional investors to occur in two stages, being:
o
o
Tranche 1 – In August 2020, the Company issued 346M Shares, using the Company’s 15%
placement capacity under ASX Listing Rule 7.1 to raise $5.9M; and
Tranche 2 – This will comprise the issue of 19M Shares to Tembo Capital Mining Fund II LP and its
affiliated entities (Tembo Capital), to raise $0.3M (subject to shareholder approval, to be sought
at a general meeting of Orion shareholders on 29 September 2020 and Foreign Investment
Review Board (FIRB) approval.
In addition to the capital raising referred to above, Tembo Capital confirmed its continued support of
Orion through subscribing for $2.1M of Shares, at a deemed issue price of $0.017 per Share (subject to
shareholder approval and FIRB approval).
DIRECTORS’ MEETINGS
The number of meetings attended by each Director of the Company during the financial year was:
56
Board Meetings
Audit Committee Meetings
Held and entitled
to attend
Attended
Held and entitled
to attend
Attended
Mr Denis Waddell
Mr Errol Smart
Mr Thomas Borman
Mr Godfrey Gomwe
Mr Alexander Haller
Mr Mark Palmer
35
35
35
35
35
35
35
35
35
35
35
34
---
2
2
1
2
---
---
2
2
1
2
---
ORION MINERALS ANNUAL REPORT 2020
Directors’ Report (continued)
•
Implemented cost savings and asset preservation initiatives across the business. All work sites were
closed and secured, and staff and contractors sent home until further notice; and
• Monitoring and use of published guidelines from the Minerals Council of South Africa on the prevention
of the spread of COVID-19. The Council’s guidelines and support materials are generated from
materials issued by the WHO and the National Institute for Communicable Diseases in South Africa.
The Company will continue to monitor and implement changes to operations, as per statutory regulations and
recommendations, as announced by both the Australian and South African Governments and the Minerals
It is not possible to adequately estimate the effect this pandemic will have on the financial position and results
Council of South Africa.
of the Company in future periods.
SUBESQUENT EVENTS AFTER THE BALANCE DATE
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to
affect the operations of the Group, the results of those operations or the state of affairs of the Group in
subsequent financial years except for those matters referred to below:
• On 13 July 2020, the Company announced that it has entered into an agreement whereby Orion (or its
nominated subsidiary) will acquire the remaining minority interests in the Jacomynspan Nickel-Copper-
PGE Project (South Africa) held by two companies, Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty)
Ltd.
• On 29 July 2020, the Company announced that it had reached agreement with Anglo American sefa
Mining Fund (AASMF) to extend the term of the loan facility entered into between the Company and
AASMF whereby AASMF loaned ZAR14.25M to Orion, from 31 July 2020 to 30 April 2021.
• On 7 August 2020 the Company announced a strongly supported $6.2M capital raising. The raising,
comprising the issue of 365M Shares at an issue price of $0.017 per ordinary share (Share), to be
conducted via a placement to sophisticated and professional investors to occur in two stages, being:
o
Tranche 1 – In August 2020, the Company issued 346M Shares, using the Company’s 15%
placement capacity under ASX Listing Rule 7.1 to raise $5.9M; and
o
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Tranche 2 – This will comprise the issue of 19M Shares to Tembo Capital Mining Fund II LP and its
affiliated entities (Tembo Capital), to raise $0.3M (subject to shareholder approval, to be sought
at a general meeting of Orion shareholders on 29 September 2020 and Foreign Investment
Review Board (FIRB) approval.
In addition to the capital raising referred to above, Tembo Capital confirmed its continued support of
Orion through subscribing for $2.1M of Shares, at a deemed issue price of $0.017 per Share (subject to
shareholder approval and FIRB approval).
DIRECTORS’ MEETINGS
The number of meetings attended by each Director of the Company during the financial year was:
Board Meetings
Audit Committee Meetings
Held and entitled
to attend
Attended
Held and entitled
to attend
Attended
Mr Denis Waddell
Mr Errol Smart
Mr Thomas Borman
Mr Godfrey Gomwe
Mr Alexander Haller
35
35
35
35
35
Directors’ Report (continued)
Mr Mark Palmer
35
35
35
35
35
35
34
2
2
---
1
2
---
2
2
---
1
2
---
DIRECTORS’ INTERESTS
The relevant interest of each director in the ordinary shares, or options over such instruments issued by the
Company, as notified by the directors to the Australian Securities Exchange in accordance with S205G(1) of the
Corporations Act 2001, at the date of this report is as follows:
Ordinary shares
Unlisted options over ordinary shares
Mr Denis Waddell
111,714,746
Mr Errol Smart
Mr Thomas Borman
19,900,666
3,000,000
Mr Godfrey Gomwe
---
Mr Alexander Haller (i)
78,735,319
Mr Mark Palmer
---
24,000,000
60,000,000
3,000,000
3,000,000
3,000,000
---
(i)
Mr Haller holds relevant interests as follows: Silja Investment Ltd 66,321,960 ordinary shares, Mr Haller
12,412,039 ordinary shares and Pershing Securities 1,320 ordinary shares.
SHARE OPTIONS
Options granted to directors and executives of the Company
During or since the end of the financial year, the Company has granted options for no consideration over
unissued ordinary shares in the Company to key management personnel as part of their remuneration.
Unissued shares under options and performance rights
At the date of this report unissued ordinary shares of the Company under option are:
Expiry Date
Exercise price
Number of ordinary shares
30 November 2020
30 November 2020
30 November 2020
31 May 2022
31 May 2022
31 May 2022
31 March 2023
31 March 2023
31 March 2023
30 April 2024
30 April 2024
30 April 2024
17 June 2024
31 March 2025
31 March 2025
31 March 2025
Total
$0.02
$0.035
$0.05
$0.03
$0.045
$0.06
$0.05
$0.06
$0.07
$0.04
$0.05
$0.06
$0.05
$0.028
$0.035
$0.04
16,333,333
18,333,333
18,333,334
12,100,000
12,100,000
12,100,000
4,900,000
4,900,000
4,900,000
30,500,000
30,500,000
30,500,000
11,000,000
10,500,000
10,500,000
10,500,000
238,000,000
57
ORION MINERALS ANNUAL REPORT 2020
Directors’ Report (continued)
DIRECTORS’ INTERESTS
The relevant interest of each director in the ordinary shares, or options over such instruments issued by the
Company, as notified by the directors to the Australian Securities Exchange in accordance with S205G(1) of the
Corporations Act 2001, at the date of this report is as follows:
Ordinary shares
Unlisted options over ordinary shares
Mr Denis Waddell
111,714,746
Mr Errol Smart
Mr Thomas Borman
19,900,666
3,000,000
Mr Godfrey Gomwe
---
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Mr Alexander Haller (i)
Mr Mark Palmer
78,735,319
---
24,000,000
60,000,000
3,000,000
3,000,000
3,000,000
---
(i)
Mr Haller holds relevant interests as follows: Silja Investment Ltd 66,321,960 ordinary shares, Mr Haller
12,412,039 ordinary shares and Pershing Securities 1,320 ordinary shares.
SHARE OPTIONS
Options granted to directors and executives of the Company
During or since the end of the financial year, the Company has granted options for no consideration over
unissued ordinary shares in the Company to key management personnel as part of their remuneration.
Unissued shares under options and performance rights
At the date of this report unissued ordinary shares of the Company under option are:
Expiry Date
Exercise price
Number of ordinary shares
30 November 2020
30 November 2020
30 November 2020
31 May 2022
31 May 2022
31 May 2022
31 March 2023
31 March 2023
31 March 2023
30 April 2024
30 April 2024
30 April 2024
17 June 2024
31 March 2025
31 March 2025
31 March 2025
$0.02
$0.035
$0.05
$0.03
$0.045
$0.06
$0.05
$0.06
$0.07
$0.04
$0.05
$0.06
$0.05
$0.028
$0.035
$0.04
Total
Directors’ Report (continued)
16,333,333
18,333,333
18,333,334
12,100,000
12,100,000
12,100,000
4,900,000
4,900,000
4,900,000
30,500,000
30,500,000
30,500,000
11,000,000
10,500,000
10,500,000
10,500,000
238,000,000
Shares issued on exercise of options
There were no options exercised during the financial year by a former director of the Company. There has been
no options exercised since the end of the financial year.
REMUNERATION REPORT - AUDITED
The Remuneration Report sets out remuneration information for Orion Minerals Ltd for the year ended 30 June
2020. The following were key management personnel (KMP) of the Group at any time during the reporting
period and unless otherwise indicated were key management personnel for the entire period.
Key Management Personnel
Designation
Position held during the year
Mr Denis Waddell
Chairman – Non-Executive
Chairman
Mr Errol Smart
Director – Executive
Managing Director & Chief Executive Officer
Mr Thomas Borman
Director – Non-Executive
Director
Mr Godfrey Gomwe
Director – Non-Executive
Director
Mr Alexander Haller
Director – Non-Executive
Director
Mr Mark Palmer
Mr Walter Shamu
Mr Martin Bouwmeester
58
Mr Louw van Schalkwyk
Ms Michelle Jenkins
Remuneration Policy
Director – Non-Executive
Director
---
---
---
---
Chief Operating Officer
Chief Financial Officer & Company Secretary
Executive: Exploration (South Africa)
Executive: Finance & Administration (South Africa)
Key management personnel have authority and responsibility for planning, directing and controlling the
activities of the Group. Key management personnel comprise the directors and executives of the Company
and the Group, which comprise executives that report directly to the Managing Director and CEO of the
Company and the Group.
It is the Group’s objective to provide maximum stakeholder benefit from the retention of a high quality Board
and management by remunerating directors and executives fairly and appropriately with reference to relevant
employment and market conditions. To assist in achieving the objective the Board links the nature and amount
of executive directors’ remuneration to the Group’s financial and operational performance.
The expected outcome of the Group’s remuneration structure is:
Retention and motivation of directors and executives;
• Attraction of quality management to the Group; and
•
•
Performance rewards to allow directors and executives to participate in the future success of the Group.
Remuneration may include base salary and fees, short term incentives, superannuation contributions and long
term incentives. Any equity based remuneration for directors will only be made with the prior approval of
shareholders at a general meeting. All base salary and fees, short term incentives, superannuation contributions
granted to key management personnel during the year was fixed under service agreements between the
Company and key management personnel and was not impacted by performance related measures. In
relation to the payment of bonuses, options and other incentive payments, discretion is exercised by the Board,
having regard to the overall performance of the Group and the performance of the individual during the
The Board of directors is responsible for determining and reviewing compensation arrangements for the
executive and non-executive directors. The maximum remuneration of non-executive directors is the subject of
shareholder resolution in accordance with the Company’s Constitution, and the Corporations Act 2001 as
period.
applicable.
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
Directors’ Report (continued)
DIRECTORS’ REPORT co ntinued
Shares issued on exercise of options
There were no options exercised during the financial year by a former director of the Company. There has been
no options exercised since the end of the financial year.
REMUNERATION REPORT - AUDITED
The Remuneration Report sets out remuneration information for Orion Minerals Ltd for the year ended 30 June
2020. The following were key management personnel (KMP) of the Group at any time during the reporting
period and unless otherwise indicated were key management personnel for the entire period.
Key Management Personnel
Designation
Position held during the year
Mr Denis Waddell
Chairman – Non-Executive
Chairman
Mr Errol Smart
Director – Executive
Managing Director & Chief Executive Officer
Mr Thomas Borman
Director – Non-Executive
Director
Mr Godfrey Gomwe
Director – Non-Executive
Director
Mr Alexander Haller
Director – Non-Executive
Director
Mr Mark Palmer
Mr Walter Shamu
Mr Martin Bouwmeester
Mr Louw van Schalkwyk
Ms Michelle Jenkins
Director – Non-Executive
Director
---
---
---
---
Chief Operating Officer
Chief Financial Officer & Company Secretary
Executive: Exploration (South Africa)
Executive: Finance & Administration (South Africa)
Remuneration Policy
Key management personnel have authority and responsibility for planning, directing and controlling the
activities of the Group. Key management personnel comprise the directors and executives of the Company
and the Group, which comprise executives that report directly to the Managing Director and CEO of the
Company and the Group.
It is the Group’s objective to provide maximum stakeholder benefit from the retention of a high quality Board
and management by remunerating directors and executives fairly and appropriately with reference to relevant
employment and market conditions. To assist in achieving the objective the Board links the nature and amount
of executive directors’ remuneration to the Group’s financial and operational performance.
The expected outcome of the Group’s remuneration structure is:
•
Retention and motivation of directors and executives;
• Attraction of quality management to the Group; and
•
Performance rewards to allow directors and executives to participate in the future success of the Group.
Remuneration may include base salary and fees, short term incentives, superannuation contributions and long
term incentives. Any equity based remuneration for directors will only be made with the prior approval of
shareholders at a general meeting. All base salary and fees, short term incentives, superannuation contributions
granted to key management personnel during the year was fixed under service agreements between the
Company and key management personnel and was not impacted by performance related measures. In
relation to the payment of bonuses, options and other incentive payments, discretion is exercised by the Board,
having regard to the overall performance of the Group and the performance of the individual during the
period.
The Board of directors is responsible for determining and reviewing compensation arrangements for the
executive and non-executive directors. The maximum remuneration of non-executive directors is the subject of
shareholder resolution in accordance with the Company’s Constitution, and the Corporations Act 2001 as
applicable.
59
Directors’ Report (continued)
Shares issued on exercise of options
REMUNERATION REPORT - AUDITED
There were no options exercised during the financial year by a former director of the Company. There has been
no options exercised since the end of the financial year.
The Remuneration Report sets out remuneration information for Orion Minerals Ltd for the year ended 30 June
2020. The following were key management personnel (KMP) of the Group at any time during the reporting
period and unless otherwise indicated were key management personnel for the entire period.
Key Management Personnel
Designation
Position held during the year
Mr Denis Waddell
Chairman – Non-Executive
Chairman
Mr Errol Smart
Director – Executive
Managing Director & Chief Executive Officer
Mr Thomas Borman
Director – Non-Executive
Director
Mr Godfrey Gomwe
Director – Non-Executive
Director
Mr Alexander Haller
Director – Non-Executive
Director
Director – Non-Executive
Director
Mr Mark Palmer
Mr Walter Shamu
Mr Martin Bouwmeester
Mr Louw van Schalkwyk
Ms Michelle Jenkins
Remuneration Policy
---
---
---
---
Chief Operating Officer
Chief Financial Officer & Company Secretary
Executive: Exploration (South Africa)
Executive: Finance & Administration (South Africa)
Key management personnel have authority and responsibility for planning, directing and controlling the
activities of the Group. Key management personnel comprise the directors and executives of the Company
and the Group, which comprise executives that report directly to the Managing Director and CEO of the
Company and the Group.
It is the Group’s objective to provide maximum stakeholder benefit from the retention of a high quality Board
and management by remunerating directors and executives fairly and appropriately with reference to relevant
employment and market conditions. To assist in achieving the objective the Board links the nature and amount
of executive directors’ remuneration to the Group’s financial and operational performance.
The expected outcome of the Group’s remuneration structure is:
Retention and motivation of directors and executives;
• Attraction of quality management to the Group; and
•
•
Performance rewards to allow directors and executives to participate in the future success of the Group.
Remuneration may include base salary and fees, short term incentives, superannuation contributions and long
term incentives. Any equity based remuneration for directors will only be made with the prior approval of
shareholders at a general meeting. All base salary and fees, short term incentives, superannuation contributions
granted to key management personnel during the year was fixed under service agreements between the
Company and key management personnel and was not impacted by performance related measures. In
relation to the payment of bonuses, options and other incentive payments, discretion is exercised by the Board,
having regard to the overall performance of the Group and the performance of the individual during the
The Board of directors is responsible for determining and reviewing compensation arrangements for the
executive and non-executive directors. The maximum remuneration of non-executive directors is the subject of
shareholder resolution in accordance with the Company’s Constitution, and the Corporations Act 2001 as
period.
applicable.
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
The total level of remuneration for the financial year for all non-executive directors of $235,417 is maintained
within the maximum limit of $350,000 approved by shareholders. When setting fees and other compensation for
non-executive directors, the Board may seek independent advice and apply Australian benchmarks. The
Board may recommend additional remuneration to non-executive directors called upon to perform extra
services or make special exertions on behalf of the Group.
There is no scheme to provide retirement benefits, other than statutory superannuation when applicable, to
non-executive directors.
The Chairman will undertake an annual assessment of the performance of the individual directors and meet
privately with each director to discuss this assessment. Basis for evaluation for assessing performance is by
reference to Company charters and current best practice.
Consequences of performance on shareholders wealth
In considering the Group’s performance and benefits for shareholders wealth, the Board of directors has regard
to the following indices in respect of the current financial year and the previous five financial years.
Net loss attributable to equity holders of the
Company
Dividends paid
Actual share price
Directors and KMP remuneration
2020
$’000
2019
$’000
2018
$’000
2017
$’000
2016
$’000
$ (18,651)
$(10,750)
$(8,833)
$(7,930)
$(2,528)
---
$0.015
$2,613
---
$0.031
$2,533
---
$0.04
$1,835
---
$0.025
$1,151
---
$0.016
$822
Long Term Incentive Based Remuneration
The Company has an option and performance rights based remuneration scheme for executives. In
accordance with the provisions of the Orion Minerals Option and Performance Rights Plan, as approved by
shareholders at a general meeting, executives may be granted options or performance rights to purchase
ordinary shares. The number and terms of options or performance rights granted is at the absolute discretion of
the Board, provided that the total number of options on issue under the scheme at the time of the grant does
not exceed 5% of the number of ordinary shares on issue.
Unlisted options were granted during the year ended 30 June 2020 under the terms of the Orion Minerals Option
and Performance Rights Plan to employees. The issue of options to directors and employees encourages the
alignment of personal and shareholder interests.
Service contracts
Key terms of the existing service contracts for key management personnel are as follows:
Managing Director and CEO
Unlimited in term but capable of termination on 6 months’ notice by the Company or 3 months’ notice by Mr
Smart. The Group retains the right to terminate the contract immediately, by making a payment of 3 months’
remuneration in lieu of notice.
Chief Financial Officer and Company Secretary
Unlimited in term but capable of termination on 6 months’ notice by the Company or 3 months’ notice by Mr
Bouwmeester. The Group retains the right to terminate the contract immediately, by making a payment of 6
months’ remuneration in lieu of notice.
Chief Operating Officer
Unlimited in term but capable of termination on 6 months’ notice by the Company or 3 months’ notice by Mr
Shamu. The Group retains the right to terminate the contract immediately, by making a payment of 6 months’
remuneration in lieu of notice.
Executive: Exploration (South Africa)
Unlimited in term but capable of termination on 3 months’ notice. The Group retains the right to terminate the
contract immediately, by making a payment of 3 months’ remuneration in lieu of notice.
60
ORION MINERALS ANNUAL REPORT 2020
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
The total level of remuneration for the financial year for all non-executive directors of $235,417 is maintained
within the maximum limit of $350,000 approved by shareholders. When setting fees and other compensation for
non-executive directors, the Board may seek independent advice and apply Australian benchmarks. The
Board may recommend additional remuneration to non-executive directors called upon to perform extra
services or make special exertions on behalf of the Group.
There is no scheme to provide retirement benefits, other than statutory superannuation when applicable, to
non-executive directors.
The Chairman will undertake an annual assessment of the performance of the individual directors and meet
privately with each director to discuss this assessment. Basis for evaluation for assessing performance is by
reference to Company charters and current best practice.
Consequences of performance on shareholders wealth
In considering the Group’s performance and benefits for shareholders wealth, the Board of directors has regard
to the following indices in respect of the current financial year and the previous five financial years.
Net loss attributable to equity holders of the
$ (18,651)
$(10,750)
$(8,833)
$(7,930)
$(2,528)
2020
$’000
2019
$’000
2018
$’000
2017
$’000
2016
$’000
Company
Dividends paid
Actual share price
Directors and KMP remuneration
---
$0.015
$2,613
---
$0.031
$2,533
---
$0.04
$1,835
---
$0.025
$1,151
---
$0.016
$822
Long Term Incentive Based Remuneration
The Company has an option and performance rights based remuneration scheme for executives. In
accordance with the provisions of the Orion Minerals Option and Performance Rights Plan, as approved by
shareholders at a general meeting, executives may be granted options or performance rights to purchase
ordinary shares. The number and terms of options or performance rights granted is at the absolute discretion of
the Board, provided that the total number of options on issue under the scheme at the time of the grant does
not exceed 5% of the number of ordinary shares on issue.
Unlisted options were granted during the year ended 30 June 2020 under the terms of the Orion Minerals Option
and Performance Rights Plan to employees. The issue of options to directors and employees encourages the
alignment of personal and shareholder interests.
Key terms of the existing service contracts for key management personnel are as follows:
Service contracts
Managing Director and CEO
Unlimited in term but capable of termination on 6 months’ notice by the Company or 3 months’ notice by Mr
Smart. The Group retains the right to terminate the contract immediately, by making a payment of 3 months’
remuneration in lieu of notice.
Chief Financial Officer and Company Secretary
Unlimited in term but capable of termination on 6 months’ notice by the Company or 3 months’ notice by Mr
Bouwmeester. The Group retains the right to terminate the contract immediately, by making a payment of 6
FINANCIAL STATEMENTS
months’ remuneration in lieu of notice.
DIRECTORS’ REPORT co ntinued
Chief Operating Officer
Unlimited in term but capable of termination on 6 months’ notice by the Company or 3 months’ notice by Mr
Shamu. The Group retains the right to terminate the contract immediately, by making a payment of 6 months’
remuneration in lieu of notice.
Directors’ Report (continued)
Executive: Exploration (South Africa)
Unlimited in term but capable of termination on 3 months’ notice. The Group retains the right to terminate the
REMUNERATION REPORT - AUDITED (continued)
contract immediately, by making a payment of 3 months’ remuneration in lieu of notice.
Executive: Finance & Administration (South Africa)
Unlimited in term but capable of termination on 6 months’ notice by the Company or 3 months’ notice by Ms
Jenkins. The Group retains the right to terminate the contract immediately, by making a payment of 6 months’
remuneration in lieu of notice.
Certain key management personnel are also entitled to receive on termination of employment, redundancy
benefits.
The service contract outlines the components of compensation paid to the key management personnel but
does not prescribe how compensation levels are modified year to year. Compensation levels are reviewed
each year to take into account cost-of-living changes, any change in the scope of the role performed by the
senior executive and any changes required to meet the principles of the compensation policy.
Directors
Total compensation for all non-executive directors, last voted upon by shareholders at the 2007 Annual General
Meeting, is not to exceed $350,000 per annum and is set based on advice from external advisors with reference
to fees paid to other directors of comparable companies. From 1 January 2017, the Chairman receives $75,000
per annum. Non-executive directors do not receive performance related compensation. Directors’ fees cover
all main board activities and membership of one committee. Directors may be paid additional amounts for
consulting services provided in addition to normal director duties. Such additional amounts are paid on
commercial terms.
Remuneration report approval at the 2019 Annual General Meeting
The 30 June 2019 Remuneration Report received positive shareholder support at the Company’s Annual
General Meeting with a positive vote of 94% in favour.
Directors and Executive Officers’ Remuneration – 2020
Short term benefits
Remuneration
Cash
salary
and fees
Cash
bonus
Non-
monetar
y
Post-
employment
benefit
Superannuation
Long-
term
benefits
Long
service
leave
Share-based
payments (ix)
Equity
settled
shares
Equity
settled
options
Total
remuneration
% of
remuneration
in options
2020
$
$
Directors
Mr E Smart (i)
292,667
---
Non-executive Directors
Mr D Waddell (ii)
274,583
Mr T Borman (iii)
Mr G Gomwe (iv)
Mr A Haller
Mr M Palmer
41,667
41,667
41,667
41,667
Other Key Management Personnel
Mr W Shamu (v)
278,500
Mr M Bouwmeester
(vi)
Mr L van Schalkwyk
(vii)
232,000
261,000
---
Ms M Jenkins (viii)
264,000
Total
1,769,417
---
---
---
---
---
---
---
---
---
$
---
---
---
---
---
---
---
4,867
---
---
$
---
5,967
---
---
---
---
---
---
---
---
4,867
5,967
$
---
---
---
---
---
---
---
---
---
---
---
$
$
$
---
282,277
574,944
---
---
---
---
---
---
---
---
---
---
112,910
393,460
28,227
28,227
28,227
---
69,894
69,894
69,894
41,667
117,683
396,183
72,326
309,193
81,294
342,294
81,294
345,294
832,465
2,612,716
(i)
Mr Smart also holds Directorship positions within Group subsidiary companies.
%
49
29
40
40
40
---
30
23
24
24
32
61
ORION MINERALS ANNUAL REPORT 2020
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Executive: Finance & Administration (South Africa)
Unlimited in term but capable of termination on 6 months’ notice by the Company or 3 months’ notice by Ms
Jenkins. The Group retains the right to terminate the contract immediately, by making a payment of 6 months’
remuneration in lieu of notice.
Certain key management personnel are also entitled to receive on termination of employment, redundancy
The service contract outlines the components of compensation paid to the key management personnel but
does not prescribe how compensation levels are modified year to year. Compensation levels are reviewed
each year to take into account cost-of-living changes, any change in the scope of the role performed by the
senior executive and any changes required to meet the principles of the compensation policy.
benefits.
Directors
Total compensation for all non-executive directors, last voted upon by shareholders at the 2007 Annual General
Meeting, is not to exceed $350,000 per annum and is set based on advice from external advisors with reference
to fees paid to other directors of comparable companies. From 1 January 2017, the Chairman receives $75,000
per annum. Non-executive directors do not receive performance related compensation. Directors’ fees cover
all main board activities and membership of one committee. Directors may be paid additional amounts for
consulting services provided in addition to normal director duties. Such additional amounts are paid on
commercial terms.
Remuneration report approval at the 2019 Annual General Meeting
The 30 June 2019 Remuneration Report received positive shareholder support at the Company’s Annual
General Meeting with a positive vote of 94% in favour.
Directors and Executive Officers’ Remuneration – 2020
Short term benefits
employment
Post-
Long-
term
benefit
benefits
Share-based
payments (ix)
Remuneration
bonus
monetar
Superannuation
service
Cash
Non-
Cash
salary
and fees
Long
leave
Equity
settled
shares
Equity
settled
options
Total
remuneration
% of
remuneration
in options
2020
$
$
$
$
$
Mr E Smart (i)
292,667
---
---
282,277
574,944
Mr D Waddell (ii)
274,583
5,967
112,910
393,460
y
$
---
---
---
---
---
---
---
4,867
$
---
---
---
---
---
---
---
$
---
---
---
---
---
---
---
---
%
49
29
40
40
40
---
30
23
---
---
---
---
---
---
---
28,227
28,227
28,227
---
69,894
69,894
69,894
41,667
117,683
396,183
72,326
309,193
Directors
Non-executive Directors
Mr T Borman (iii)
Mr G Gomwe (iv)
Mr A Haller
Mr M Palmer
41,667
41,667
41,667
41,667
Other Key Management Personnel
---
---
---
---
---
FINANCIAL STATEMENTS
Mr M Bouwmeester
DIRECTORS’ REPORT co ntinued
(vi)
Mr W Shamu (v)
232,000
278,500
---
---
---
---
---
---
264,000
261,000
Mr L van Schalkwyk
(vii)
Directors’ Report (continued)
Ms M Jenkins (viii)
Directors’ Report (continued)
1,769,417
Total
REMUNERATION REPORT - AUDITED (continued)
REMUNERATION REPORT - AUDITED (continued)
(i)
Analysis of Options and Rights over equity instruments granted as compensation
(ii) Mr Waddell’s fixed component of remuneration is $75,000 per annum. During the financial year, in
Details of the vesting profile of the options granted as remuneration to each key management personnel of the
addition to director fees, Mr Waddell received additional amounts for consulting services provided to the
Group as at the end of the reporting period are detailed below.
Company
Mr Smart also holds Directorship positions within Group subsidiary companies.
2,612,716
832,465
342,294
345,294
81,294
81,294
4,867
5,967
---
---
---
---
---
---
---
---
---
24
24
32
(iii) Mr Borman has held the position of Non-Executive Director from 16 April 2019.
(iv) Mr Gomwe has held the position of Non-Executive Director from 16 April 2019.
(v) Mr Shamu holds the position of Chief Operating Officer and is also a Director of certain Group subsidiary
% lapsed in
current year (i)
% vested in
current year
Date grant vests (ii)
Number
Date
Directors
companies.
Mr D Waddell
26 November 2015
(vi) Mr Bouwmeester holds the position of Chief Financial Officer and Company Secretary.
---%
(vii) Mr van Schalkwyk holds the position of Executive: Exploration (South Africa).
26 November 2015
---%
(viii) Ms Jenkins holds the position of Executive: Finance & Administration (South Africa) and is also a Director
26 November 2015
---%
14 June 2019
---%
14 June 2019
---%
14 June 2019
---%
of certain Group subsidiary companies.
Share based payments represent the fair values of options estimated at the date of grant using the Black
Scholes option pricing model. These amounts are not paid in cash.
30 November 2015
30 November 2016
30 November 2017
14 June 2019
30 April 2020
30 April 2021
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
---%
---%
---%
---%
100%
---%
(ix)
Mr E Smart
10,000,000
Directors and Executive Officer’s Remuneration Changes related to impact of COVID-19
From 1 May 2020, all Directors and Executives of the Company agreed, in the interim, to significantly reduce the
10,000,000
cash component of their remuneration or fee package. Non-executive Directors agreed to reduce their
10,000,000
Director Fees to zero and Executives’ agreed to reduce the cash component of their remuneration or fee
10,000,000
packages by 20%. Effective 1 September 2020, the Board approved the reinstatement of Executives’
10,000,000
remuneration and Director fees from the reduced amounts effective from 1 May 2020. Refer to ASX releases 29
10,000,000
April 2020 and 1 September 2020 for further information.
26 November 2015
26 November 2015
26 November 2015
14 June 2019
14 June 2019
14 June 2019
30 November 2015
30 November 2016
30 November 2017
14 June 2019
30 April 2020
30 April 2021
---%
---%
---%
---%
100%
---%
---%
---%
---%
---%
---%
---%
Mr A Haller
Directors and Executive Officers’ Remuneration – 2019
Short term benefits
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
Cash
bonus
Cash
salary
and fees
1,000,000
1,000,000
1,000,000
$
$
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
Non-
monetar
14 June 2019
y
14 June 2019
14 June 2019
$
Post-
employment
benefit
Superannuation
---%
100%
---%
---%
---%
---%
14 June 2019
30 April 2020
30 April 2021
Long-
term
benefits
---%
100%
---%
Long
service
leave
---%
100%
---%
$
Share-based
payments (ix)
---%
---%
---%
14 June 2019
30 April 2020
30 April 2021
Equity
settled
shares
---%
---%
---%
$
Equity
settled
options
$
Total
remuneration
14 June 2019
30 April 2020
30 April 2021
$
Other Key Management Personnel
Directors
Mr E Smart
Non-executive Directors
300,000
---
248,191
2,000,000
2,000,000
2,000,000
1,000,000
1,000,000
1,000,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
50,000
50,000
10,417
10,417
87,248
---
---
---
---
---
---
285,000
---
---
31 May 2017
31 May 2017
31 May 2017
---
21 Sept 2018
---
21 Sept 2018
---
21 Sept 2018
---
29 April 2019
29 April 2019
---
29 April 2019
---
26 March 2020
26 March 2020
---
26 March 2020
3,345
$
---
6,509
---
---
---
---
8,289
---
---%
---%
100%
---%
---%
100%
---%
100%
---%
100%
---%
---%
---
---
---
---
---
---
---
---
---
---
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---
---
---
---
---
---
195,118
495,118
31 May 2018
31 May 2019
31 May 2020
332,743
31 Mar 2018
69,511
31 Mar 2019
50,000
31 Mar 2020
29,928
30 April 2019
30 April 2020
29,928
30 April 2021
95,537
31 March 2020
31 March 2021
31 March 2022
422,966
78,043
19,511
---
19,511
19,511
---
137,966
Other Key Management Personnel
---
---
---
---
---
---
---
---
270,000
270,000
240,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
Mr Hulmes resigned from the Board of Directors effective 18 April 2019 and his remuneration is
2,000,000
disclosed as at resignation date.
2,000,000
2,000,000
26 November 2015
26 November 2015
26 November 2015
---
29 April 2019
3,345
29 April 2019
29 April 2019
26 March 2020
26 March 2020
26 March 2020
301,939
30 November 2015
352,768
30 November 2016
30 November 2017
352,768
30 April 2019
30 April 2020
30 April 2021
31 March 2020
31 March 2021
31 March 2022
---%
---%
---%
---%
100%
---%
100%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
1,821,273
2,533,206
693,790
14,798
82,768
58,594
82,768
---
---
---
---
---
---
---
---
19
23
23
27
Insurance premiums paid on behalf of directors and officers are not allocated to or included in total
remuneration.
Mr T Borman
Remuneration
Mr G Gomwe
2019
Mr D Waddell
Mr A Haller
Mr M Palmer
Mr W Shamu
Mr T Borman
Mr G Gomwe
Mr M Hulmes (i)
Mr W Shamu
Mr M Bouwmeester
Mr L van Schalkwyk
Ms M Jenkins
Total
Mr M
Bouwmeester
(i)
62
% of
remuneration
in options
%
39
23
28
---
65
65
---
33
ORION MINERALS ANNUAL REPORT 2020
Directors’ Report (continued)
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
REMUNERATION REPORT - AUDITED (continued)
Analysis of Options and Rights over equity instruments granted as compensation
(ii) Mr Waddell’s fixed component of remuneration is $75,000 per annum. During the financial year, in
Details of the vesting profile of the options granted as remuneration to each key management personnel of the
Group as at the end of the reporting period are detailed below.
addition to director fees, Mr Waddell received additional amounts for consulting services provided to the
(iii) Mr Borman has held the position of Non-Executive Director from 16 April 2019.
(iv) Mr Gomwe has held the position of Non-Executive Director from 16 April 2019.
current year
current year (i)
Number
Date
% vested in
% lapsed in
Date grant vests (ii)
(v) Mr Shamu holds the position of Chief Operating Officer and is also a Director of certain Group subsidiary
Company
Directors
companies.
(vi) Mr Bouwmeester holds the position of Chief Financial Officer and Company Secretary.
26 November 2015
---%
---%
4,000,000
30 November 2015
(vii) Mr van Schalkwyk holds the position of Executive: Exploration (South Africa).
26 November 2015
4,000,000
---%
---%
30 November 2016
(viii) Ms Jenkins holds the position of Executive: Finance & Administration (South Africa) and is also a Director
26 November 2015
4,000,000
30 November 2017
---%
---%
Mr D Waddell
of certain Group subsidiary companies.
4,000,000
14 June 2019
(ix)
Share based payments represent the fair values of options estimated at the date of grant using the Black
Scholes option pricing model. These amounts are not paid in cash.
4,000,000
4,000,000
14 June 2019
14 June 2019
14 June 2019
30 April 2020
30 April 2021
Directors and Executive Officer’s Remuneration Changes related to impact of COVID-19
26 November 2015
---%
---%
10,000,000
30 November 2015
From 1 May 2020, all Directors and Executives of the Company agreed, in the interim, to significantly reduce the
26 November 2015
30 November 2016
10,000,000
---%
---%
cash component of their remuneration or fee package. Non-executive Directors agreed to reduce their
10,000,000
26 November 2015
30 November 2017
---%
---%
Director Fees to zero and Executives’ agreed to reduce the cash component of their remuneration or fee
Mr E Smart
packages by 20%. Effective 1 September 2020, the Board approved the reinstatement of Executives’
remuneration and Director fees from the reduced amounts effective from 1 May 2020. Refer to ASX releases 29
10,000,000
10,000,000
10,000,000
14 June 2019
14 June 2019
14 June 2019
---%
---%
---%
---%
---%
---%
---%
---%
---%
14 June 2019
30 April 2020
30 April 2021
14 June 2019
30 April 2020
30 April 2021
April 2020 and 1 September 2020 for further information.
1,000,000
14 June 2019
Mr A Haller
Directors and Executive Officers’ Remuneration – 2019
14 June 2019
1,000,000
Mr T Borman
1,000,000
14 June 2019
1,000,000
14 June 2019
Short term benefits
1,000,000
14 June 2019
14 June 2019
Non-
1,000,000
Cash
Cash
Post-
employment
benefit
Remuneration
salary
1,000,000
bonus
14 June 2019
monetar
Superannuation
Mr G Gomwe
2019
and fees
1,000,000
$
1,000,000
$
14 June 2019
y
14 June 2019
$
Other Key Management Personnel
Directors
---%
Long-
term
100%
benefits
---%
---%
service
leave
100%
---%
$
Share-based
---%
14 June 2019
payments (ix)
---%
---%
30 April 2020
30 April 2021
settled
---%
settled
shares
options
---%
---%
$
$
Total
14 June 2019
remuneration
30 April 2020
30 April 2021
$
Long
Equity
Equity
% of
remuneration
in options
Mr E Smart
300,000
2,000,000
---
31 May 2017
---
---
---%
---
---
---%
195,118
31 May 2018
495,118
Non-executive Directors
2,000,000
31 May 2017
$
---
---
---
---
---
---
6,509
8,289
Mr D Waddell
Mr A Haller
Mr M Palmer
Mr W Shamu
Mr T Borman
Mr G Gomwe
Mr M Hulmes (i)
Mr W Shamu
2,000,000
248,191
1,000,000
50,000
1,000,000
---
---
50,000
1,000,000
---
31 May 2017
---
---
---
21 Sept 2018
21 Sept 2018
21 Sept 2018
10,417
2,500,000
---
29 April 2019
---
10,417
2,500,000
---
29 April 2019
---
2,500,000
87,248
---
29 April 2019
---
2,500,000
26 March 2020
2,500,000
285,000
2,500,000
---
26 March 2020
26 March 2020
---
Other Key Management Personnel
Mr M Bouwmeester
240,000
2,000,000
---
3,345
26 November 2015
Mr L van Schalkwyk
270,000
2,000,000
---
26 November 2015
---
---
Ms M Jenkins
270,000
2,000,000
---
26 November 2015
---
---
Total
Mr M
Bouwmeester
2,000,000
1,821,273
---
2,000,000
29 April 2019
3,345
29 April 2019
2,000,000
29 April 2019
disclosed as at resignation date.
2,000,000
26 March 2020
2,000,000
26 March 2020
%
39
23
28
---
65
65
---
33
19
23
23
27
31 May 2019
31 May 2020
332,743
31 Mar 2018
69,511
31 Mar 2019
31 Mar 2020
50,000
78,043
19,511
---
19,511
30 April 2019
29,928
19,511
30 April 2020
29,928
---
30 April 2021
95,537
31 March 2020
31 March 2021
31 March 2022
422,966
137,966
58,594
301,939
30 November 2015
82,768
30 November 2016
352,768
82,768
30 November 2017
352,768
30 April 2019
2,533,206
30 April 2020
30 April 2021
31 March 2020
31 March 2021
---%
---%
---
---%
---
---%
---
---%
---
---%
---%
---
---%
---
---%
---%
---
---%
---
---%
---
---%
---%
---
---%
---
---%
---%
---%
---%
---%
(i)
Mr Hulmes resigned from the Board of Directors effective 18 April 2019 and his remuneration is
14,798
693,790
Insurance premiums paid on behalf of directors and officers are not allocated to or included in total
2,000,000
26 March 2020
31 March 2022
remuneration.
---%
100%
---%
---%
100%
---%
---%
100%
---%
---%
100%
---%
---%
100%
---
---
---
---%
---
100%
---%
100%
---
---
---%
---%
---%
---%
---%
---%
---
---
---
---
---
100%
---%
100%
---%
---%
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Options and Rights over equity instruments granted as compensation
As at the date of this report, there were 174,000,000 unissued ordinary shares under option issued to directors
and executives (2019: 149,000,000 unissued ordinary shares under option).
Details on options over ordinary shares in the Company that were granted as compensation to each key
management personnel during the reporting period and details on options that were vested during the reporting
period are as follows:
Number of options
granted during
FY2020 (i)
Grant date
Fair value
per option
at grant
date
Exercise
price per
option
(ii)
Expiry date
Number of
options
vested during
FY2020
Directors
Mr D Waddell
Mr E Smart
Mr A Haller
Mr T Borman
Mr G Gomwe
Other Key Management Personnel
Mr W Shamu
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
31 May 2017
29 April 2019
$0.01
$0.01
7,500,000
26 March 2020
$0.01
---
29 April 2019
$0.01
Mr M Bouwmeester
6,000,000
26 March 2020
$0.01
Mr L van Schalkwyk
Ms M Jenkins
---
---
31 May 2017
29 April 2019
$0.01
$0.01
6,000,000
26 March 2020
$0.01
---
---
31 May 2017
29 April 2019
$0.01
$0.01
6,000,000
26 March 2020
$0.01
---
---
---
---
---
$0.06
$0.05
$0.028
$0.035
$0.04
$0.05
$0.028
$0.035
$0.04
$0.06
$0.05
$0.028
$0.035
$0.04
$0.06
$0.05
$0.028
$0.035
$0.04
---
---
---
---
---
---
---
---
---
---
31 May 2022
2,000,000
30 April 2024
2,000,000
31 March 2025
2,500,000
30 April 2024
2,000,000
31 March 2025
2,000,000
31 May 2022
2,000,000
30 April 2024
2,000,000
31 March 2025
2,000,000
31 May 2022
2,000,000
30 April 2024
2,000,000
31 March 2025
2,000,000
(i)
(ii)
The options were provided at no cost to the recipient. Each option gives the option holder the right to
subscribe for one ordinary share in the capital of the Company upon exercise of the option in
accordance with the attaching terms and conditions.
The options are exercisable between 1 and 5 years from grant date.
63
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Analysis of Options and Rights over equity instruments granted as compensation
Details of the vesting profile of the options granted as remuneration to each key management personnel of the
Group as at the end of the reporting period are detailed below.
Number
Date
% vested in
current year
% lapsed in
current year (i)
Date grant vests (ii)
Directors
Mr D Waddell
Mr E Smart
Mr A Haller
Mr T Borman
Mr G Gomwe
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
26 November 2015
26 November 2015
26 November 2015
14 June 2019
14 June 2019
14 June 2019
26 November 2015
26 November 2015
26 November 2015
14 June 2019
14 June 2019
14 June 2019
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
Other Key Management Personnel
2,000,000
2,000,000
2,000,000
1,000,000
1,000,000
1,000,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
31 May 2017
31 May 2017
31 May 2017
21 Sept 2018
21 Sept 2018
21 Sept 2018
29 April 2019
29 April 2019
29 April 2019
26 March 2020
26 March 2020
26 March 2020
26 November 2015
26 November 2015
26 November 2015
29 April 2019
29 April 2019
29 April 2019
26 March 2020
26 March 2020
26 March 2020
Mr W Shamu
Mr M
Bouwmeester
64
---%
---%
---%
---%
100%
---%
---%
---%
---%
---%
100%
---%
---%
100%
---%
---%
100%
---%
---%
100%
---%
---%
---%
100%
---%
---%
100%
---%
100%
---%
100%
---%
---%
---%
---%
---%
---%
100%
---%
100%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
30 November 2015
30 November 2016
30 November 2017
14 June 2019
30 April 2020
30 April 2021
30 November 2015
30 November 2016
30 November 2017
14 June 2019
30 April 2020
30 April 2021
14 June 2019
30 April 2020
30 April 2021
14 June 2019
30 April 2020
30 April 2021
14 June 2019
30 April 2020
30 April 2021
31 May 2018
31 May 2019
31 May 2020
31 Mar 2018
31 Mar 2019
31 Mar 2020
30 April 2019
30 April 2020
30 April 2021
31 March 2020
31 March 2021
31 March 2022
30 November 2015
30 November 2016
30 November 2017
30 April 2019
30 April 2020
30 April 2021
31 March 2020
31 March 2021
31 March 2022
ORION MINERALS ANNUAL REPORT 2020
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Analysis of Options and Rights over equity instruments granted as compensation
Details of the vesting profile of the options granted as remuneration to each key management personnel of the
Group as at the end of the reporting period are detailed below.
Number
Date
% vested in
% lapsed in
Date grant vests (ii)
current year
current year (i)
Directors
Mr D Waddell
Mr E Smart
Mr A Haller
Mr T Borman
Mr G Gomwe
Mr W Shamu
Mr M
Bouwmeester
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
10,000,000
26 November 2015
26 November 2015
26 November 2015
14 June 2019
14 June 2019
14 June 2019
26 November 2015
26 November 2015
26 November 2015
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
2,000,000
31 May 2017
2,000,000
31 May 2017
2,000,000
31 May 2017
1,000,000
21 Sept 2018
1,000,000
21 Sept 2018
1,000,000
21 Sept 2018
2,500,000
29 April 2019
2,500,000
29 April 2019
2,500,000
29 April 2019
2,500,000
26 March 2020
2,500,000
26 March 2020
2,500,000
26 March 2020
2,000,000
26 November 2015
2,000,000
26 November 2015
2,000,000
26 November 2015
2,000,000
29 April 2019
2,000,000
29 April 2019
2,000,000
29 April 2019
2,000,000
26 March 2020
2,000,000
26 March 2020
2,000,000
26 March 2020
---%
---%
---%
---%
100%
---%
---%
---%
---%
---%
100%
---%
---%
100%
---%
---%
100%
---%
---%
100%
---%
---%
---%
100%
---%
---%
100%
---%
100%
---%
100%
---%
---%
---%
---%
---%
---%
100%
---%
100%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
30 November 2015
30 November 2016
30 November 2017
14 June 2019
30 April 2020
30 April 2021
30 November 2015
30 November 2016
30 November 2017
14 June 2019
30 April 2020
30 April 2021
14 June 2019
30 April 2020
30 April 2021
14 June 2019
30 April 2020
30 April 2021
14 June 2019
30 April 2020
30 April 2021
31 May 2018
31 May 2019
31 May 2020
31 Mar 2018
31 Mar 2019
31 Mar 2020
30 April 2019
30 April 2020
30 April 2021
31 March 2020
31 March 2021
31 March 2022
30 November 2015
30 November 2016
30 November 2017
30 April 2019
30 April 2020
30 April 2021
31 March 2020
31 March 2021
31 March 2022
Other Key Management Personnel
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Mr L van
Schalkwyk
Ms M Jenkins
Number
Date
% vested in
current year
% lapsed in
current year (i)
Date grant vests (ii)
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
31 May 2017
31 May 2017
31 May 2017
29 April 2019
29 April 2019
29 April 2019
26 March 2020
26 March 2020
26 March 2020
31 May 2017
31 May 2017
31 May 2017
29 April 2019
29 April 2019
29 April 2019
26 March 2020
26 March 2020
26 March 2020
---%
---%
100%
---%
100%
---%
100%
---%
---%
---%
---%
100%
---%
100%
---%
100%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
31 May 2018
31 May 2019
31 May 2020
30 April 2019
30 April 2020
30 April 2021
31 March 2020
31 March 2021
31 March 2022
31 May 2018
31 May 2019
31 May 2020
30 April 2019
30 April 2020
30 April 2021
31 March 2020
31 March 2021
31 March 2022
(i)
(ii)
The % lapsed in the year represents the reduction from the maximum number of options available to be
exercised.
The vesting conditions attached to each option granted require the key management personnel to
remain in employment with the Company until the vesting date, unless the Board of directors elects to
waive the expiry terms attached to the grant.
The Company issued certain options with immediate vesting conditions to Directors and key management
personnel during the reporting period as deemed appropriate by the Board to retain professionals with relevant
expertise and provide incentives to members during our period of growth.
Analysis of movements in options
Changes during the reporting period, by value, of options over ordinary shares in the Company held by each
current key management person, and each of the named current Company executives is detailed below.
Value of options
Granted in year
$
Exercised in year
$
Lapsed in year
$
Mr D Waddell
Mr E Smart
Mr A Haller
Mr M Palmer
Mr T Borman
Mr G Gomwe
Mr W Shamu
Mr M Bouwmeester
Mr L van Schalkwyk
Ms M Jenkins
112,910
282,277
28,227
---
28,227
28,227
117,683
72,326
81,294
81,294
---
---
---
---
---
---
---
---
---
----
---
---
---
---
---
---
---
---
---
---
65
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Options and rights over equity instruments
The movement during the reporting period, by number of options over ordinary shares in the Company held,
directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:
Balance at
beginning of
period
1-Jul-19
Granted as
remuneration
Purchased
or
acquired
Expired
Balance at
end of
period
30-June-20
Not vested
and not
exercisable
Vested and
exercisable
Directors
Mr D Waddell
Mr E Smart
Mr A Haller
Mr M Palmer
Mr T Borman
Mr G Gomwe
24,000,000
60,000,000
3,000,000
---
3,000,000
3,000,000
---
---
---
---
---
---
Other Key Management Personnel
Mr W Shamu
Mr M Bouwmeester
Mr L van Schalkwyk
Ms M Jenkins
Total
16,500,000
12,000,000
12,000,000
12,000,000
7,500,000
6,000,000
6,000,000
6,000,000
145,500,000
25,500,000
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
24,000,000
4,000,000
60,000,000
10,000,000
3,000,000
1,000,000
---
---
3,000,000
1,000,000
3,000,000
1,000,000
24,000,000
8,500,000
18,000,000
6,000,000
18,000,000
6,000,000
18,000,000
6,000,000
20,000,000
50,000,000
2,000,000
---
2,000,000
2,000,000
15,500,000
12,000,000
12,000,000
12,000,000
---
171,000,000
43,500,000
127,500,000
Balance at
beginning of
period
1-Jul-18
Granted as
remuneration
Purchased
or
acquired
Expired
Balance at
end of
period
30-June-19
Not vested
and not
exercisable
Vested and
exercisable
Directors
Mr D Waddell
12,000,000
12,000,000
30,000,000
30,000,000
Mr E Smart
Mr A Haller
Mr M Palmer
Mr T Borman
Mr G Gomwe
Mr M Hulmes
Mr W Shamu
Mr M Bouwmeester
Mr L van Schalkwyk
Ms M Jenkins
Total
---
---
---
---
---
6,000,000
6,000,000
6,000,000
6,000,000
3,000,000
---
3,000,000
3,000,000
---
10,500,000
6,000,000
6,000,000
6,000,000
66,000,000
79,500,000
Other Key Management Personnel
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
24,000,000
8,000,000
16,000,000
60,000,000
20,000,000
40,000,000
3,000,000
2,000,000
1,000,000
---
---
3,000,000
2,000,000
3,000,000
2,000,000
---
1,000,000
1,000,000
---
---
---
16,500,000
9,000,000
12,000,000
4,000,000
12,000,000
6,000,000
12,000,000
6,000,000
7,500,000
8,000,000
6,000,000
6,000,000
---
145,500,000
59,000,000
86,500,000
Other transactions with key management personnel
A number of key management personnel, or their related parties, hold positions in other entities that result in
them having control, joint control or a relevant interest over the financial or operating policies of those entities.
A number of these entities transacted with the Group during the year. The terms and conditions of the
transactions with key management personnel and their related parties were no more favorable than those
available, or which might reasonably be expected to be available, on similar transactions to non-key
management personnel related entities on an arm’s length basis (refer Note 26).
66
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Movement in shares
The movement during the reporting period in the number of ordinary shares in the Company held, directly,
indirectly or beneficially, by each key management person, including their related parties, is as follows:
Balance at
beginning of period
1-Jul-19
Purchased or
acquired
during the
year
On options
exercised
Disposals
of shares
Other
transfers of
shares
Balance at
end of period
30-Jun-20
Directors
Mr D Waddell
Mr E Smart
Mr A Haller (i)
Mr M Palmer
Mr T Borman
Mr G Gomwe
111,714,746
19,900,666
69,119,937
---
3,000,000
---
Other Key Management Personnel
Mr W Shamu (ii)
Mr M Bouwmeester
2,083,333
4,867,360
Mr L van Schalkwyk
---
Ms M Jenkins (ii)
2,916,287
---
---
9,615,383
---
---
---
---
1,200,000
---
---
Total
213,602,329
10,815,383
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
(500,489)
---
---
(500,489)
---
---
---
---
---
---
---
---
---
---
---
111,714,746
19,900,666
78,735,320
---
3,000,000
---
2,083,333
5,566,871
---
2,916,287
223,917,223
(i) Mr Haller holds relevant interests as follows: Silja Investment Ltd 66,321,961 shares and Pershing Securities
1,320 shares. Mr Haller personally holds interests of 12,412,039 shares.
(ii) Mr Shamu and Ms Jenkins hold relevant interests as follows: WMP Mining Services Inc 2,083,333 shares (held
equally) and Ms Jenkins holds additional interests of 833,333 shares.
Balance at
beginning of period
1-Jul-18
Purchased or
acquired
during the
year
On options
exercised
Disposals
of shares
Other
transfers of
shares
Balance at
end of period
30-Jun-19
Directors
Mr D Waddell
Mr E Smart
Mr A Haller (i)
Mr M Palmer
Mr T Borman
Mr G Gomwe
102,957,990
8,756,756
19,542,666
69,119,937
---
3,000,000
---
358,000
---
---
---
---
Mr M Hulmes (ii)
200,000
200,000
Other Key Management Personnel
Mr W Shamu (ii)
Mr M Bouwmeester
2,083,333
4,867,360
Mr L van Schalkwyk
---
Ms M Jenkins (iii)
2,916,666
---
---
---
---
Total
204,687,952
9,314,756
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
(379)
(379)
---
---
---
---
---
---
400,000
---
---
---
---
111,714,746
19,900,666
69,119,937
---
3,000,000
---
---
2,083,333
4,867,360
---
2,916,287
400,000
213,602,329
(i) Mr Haller holds relevant interests as follows: Silja Investment Ltd 56,706,578 shares and Pershing Securities
1,320 shares. Mr Haller personally holds interests of 12,412,039 shares.
(ii) Held at the time Mr Hulmes ceased to be a director.
(iii) Mr Shamu and Ms Jenkins hold relevant interests as follows: WMP Mining Services Inc 2,083,333 shares
(held equally) and Ms Jenkins holds additional interests of 832,954 shares.
67
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
DIRECTORS’ REPORT co ntinued
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Engagement of remuneration consultants
The Board of Directors from time to time, seek and consider advice from independent remuneration consultants
to ensure that the Company has at its disposal information relevant to the determination of all aspect of
remuneration relating to key management personnel.
The Board follows a set of protocols when engaging remuneration consultants to satisfy themselves, that the
remuneration consultants engaged are free from any undue influence by the members of the key
management personnel to whom advice and recommendations relate and that the requirements of the
Corporations Act 2001 are complied with. The set of protocols followed by the Board include:
• Remuneration consultants are engaged by and report directly to the Board; and
• Communication between remuneration consultants and the Company is limited to those KMPs whose
remuneration is not under consideration.
No remuneration consultants were engaged during the year.
This is the end of the remuneration report which has been audited.
ENVIRONMENTAL REGULATIONS
The Group is required to close its operations and rehabilitate the lands that it disturbs during the exploration and
operating phases in accordance with applicable mining and environmental laws and regulations. Where
necessary, provision for rehabilitation liabilities is made based on the net present value of the estimated cost of
restoring the environmental disturbance that has occurred up to the reporting date.
As part of the Group’s environmental policy exploration and access sites are regenerated to match or exceed
government expectations. Based on the results of enquires made, the board is not aware of any significant
breaches during the period covered by this report.
DIVIDENDS
There were no dividends paid or declared during the financial year (2019: $nil).
INDEMNIFICATION OF DIRECTORS, OFFICERS AND AUDITORS
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the
Company and all office bearers of the Company and of any body corporate against any liability incurred whilst
acting in the capacity of director, secretary or executive officer to the extent permitted by the Corporations
Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the
premium. Orion Minerals Ltd, to the extent permitted by law, indemnifies each director or secretary against any
liability incurred in the service of the Group provided such liability does not arise out of conduct involving a lack
of good faith and for costs incurred in defending proceedings in which judgement is given in favour of the
person in which the person is acquitted. The Company has not provided any insurance or indemnity for the
auditor of the Company.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings.
NON-AUDIT SERVICES
BDO Audit Pty Ltd, the Company’s auditor, has not performed other non-audit services in addition to their
statutory duties during the year ended 30 June 2020.
BDO Corporate Finance (Pty) Ltd has performed professional services for the Group in relation to South African
entities.
68
ORION MINERALS ANNUAL REPORT 2020
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Engagement of remuneration consultants
The Board of Directors from time to time, seek and consider advice from independent remuneration consultants
to ensure that the Company has at its disposal information relevant to the determination of all aspect of
remuneration relating to key management personnel.
The Board follows a set of protocols when engaging remuneration consultants to satisfy themselves, that the
remuneration consultants engaged are free from any undue influence by the members of the key
management personnel to whom advice and recommendations relate and that the requirements of the
Corporations Act 2001 are complied with. The set of protocols followed by the Board include:
• Remuneration consultants are engaged by and report directly to the Board; and
• Communication between remuneration consultants and the Company is limited to those KMPs whose
remuneration is not under consideration.
No remuneration consultants were engaged during the year.
This is the end of the remuneration report which has been audited.
ENVIRONMENTAL REGULATIONS
The Group is required to close its operations and rehabilitate the lands that it disturbs during the exploration and
operating phases in accordance with applicable mining and environmental laws and regulations. Where
necessary, provision for rehabilitation liabilities is made based on the net present value of the estimated cost of
restoring the environmental disturbance that has occurred up to the reporting date.
As part of the Group’s environmental policy exploration and access sites are regenerated to match or exceed
government expectations. Based on the results of enquires made, the board is not aware of any significant
breaches during the period covered by this report.
DIVIDENDS
There were no dividends paid or declared during the financial year (2019: $nil).
INDEMNIFICATION OF DIRECTORS, OFFICERS AND AUDITORS
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the
Company and all office bearers of the Company and of any body corporate against any liability incurred whilst
acting in the capacity of director, secretary or executive officer to the extent permitted by the Corporations
Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the
premium. Orion Minerals Ltd, to the extent permitted by law, indemnifies each director or secretary against any
liability incurred in the service of the Group provided such liability does not arise out of conduct involving a lack
of good faith and for costs incurred in defending proceedings in which judgement is given in favour of the
person in which the person is acquitted. The Company has not provided any insurance or indemnity for the
auditor of the Company.
FINANCIAL STATEMENTS
PROCEEDINGS ON BEHALF OF COMPANY
DIRECTORS’ REPORT co ntinue d
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings.
NON-AUDIT SERVICES
BDO Audit Pty Ltd, the Company’s auditor, has not performed other non-audit services in addition to their
statutory duties during the year ended 30 June 2020.
BDO Corporate Finance (Pty) Ltd has performed professional services for the Group in relation to South African
Directors’ Report (continued)
entities.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by
another person or firm on the auditor's behalf), is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in Note 27 to the financial statements do not
compromise the external auditor's independence requirements of the Corporations Act 2001 for the following
reasons:
• all non-audit services have been reviewed and approved to ensure that they do not impact the
integrity and objectivity of the auditor; and
•
none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical
Standards Board, including reviewing or auditing the auditor's own work, acting in a management or
decision-making capacity for the company, acting as advocate for the company or jointly sharing
economic risks and rewards
ROUNDING OF AMOUNTS
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance
with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration is set out on page 70 and forms part of the Directors’ Report for
the financial year ended 30 June 2020.
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Engagement of remuneration consultants
The Board of Directors from time to time, seek and consider advice from independent remuneration consultants
to ensure that the Company has at its disposal information relevant to the determination of all aspect of
remuneration relating to key management personnel.
The Board follows a set of protocols when engaging remuneration consultants to satisfy themselves, that the
remuneration consultants engaged are free from any undue influence by the members of the key
management personnel to whom advice and recommendations relate and that the requirements of the
Corporations Act 2001 are complied with. The set of protocols followed by the Board include:
• Remuneration consultants are engaged by and report directly to the Board; and
• Communication between remuneration consultants and the Company is limited to those KMPs whose
remuneration is not under consideration.
No remuneration consultants were engaged during the year.
This is the end of the remuneration report which has been audited.
ENVIRONMENTAL REGULATIONS
The Group is required to close its operations and rehabilitate the lands that it disturbs during the exploration and
operating phases in accordance with applicable mining and environmental laws and regulations. Where
necessary, provision for rehabilitation liabilities is made based on the net present value of the estimated cost of
restoring the environmental disturbance that has occurred up to the reporting date.
As part of the Group’s environmental policy exploration and access sites are regenerated to match or exceed
government expectations. Based on the results of enquires made, the board is not aware of any significant
breaches during the period covered by this report.
DIVIDENDS
There were no dividends paid or declared during the financial year (2019: $nil).
INDEMNIFICATION OF DIRECTORS, OFFICERS AND AUDITORS
CORPORATE GOVERNANCE
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the
Company and all office bearers of the Company and of any body corporate against any liability incurred whilst
acting in the capacity of director, secretary or executive officer to the extent permitted by the Corporations
Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the
premium. Orion Minerals Ltd, to the extent permitted by law, indemnifies each director or secretary against any
liability incurred in the service of the Group provided such liability does not arise out of conduct involving a lack
of good faith and for costs incurred in defending proceedings in which judgement is given in favour of the
person in which the person is acquitted. The Company has not provided any insurance or indemnity for the
The Board of directors recognises the recommendations of the Australian Securities Exchange Corporate
Governance Council for Corporate Governance Principles and Recommendations and considers that the
Company substantially complies with those guidelines, which are of critical importance to the commercial
operation of a junior listed resources company. The Company’s Corporate Governance statement and
disclosures can be viewed on our website, www.orionminerals.com.au.
This report is made in accordance with a resolution of the directors.
auditor of the Company.
PROCEEDINGS ON BEHALF OF COMPANY
for all or any part of those proceedings.
NON-AUDIT SERVICES
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
BDO Audit Pty Ltd, the Company’s auditor, has not performed other non-audit services in addition to their
statutory duties during the year ended 30 June 2020.
BDO Corporate Finance (Pty) Ltd has performed professional services for the Group in relation to South African
entities.
Denis Waddell
Chairman
Perth, Western Australia
Date:
22
September
2020
69
ORION MINERALS ANNUAL REPORT 2020
Tel: +61 3 9603 1700
Fax: +61 3 9602 3870
www.bdo.com.au
Collins Square, Tower Four
Level 18, 727 Collins Street
Melbourne VIC 3008
GPO Box 5099 Melbourne VIC 3001
Australia
DECLARATION OF INDEPENDENCE BY JAMES MOONEY TO THE DIRECTORS OF ORION MINERALS LTD
As lead auditor of Orion Minerals Ltd for the year ended 30 June 2020, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Orion Minerals Ltd and the entities it controlled during the period.
James Mooney
Director
BDO Audit Pty Ltd
Melbourne, 22 September 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Consolidated Statement of Profit or Loss and Other Comprehensive
FOR THE YEAR ENDED 30 JUNE 2020
Income
FOR THE YEAR ENDED 30 JUNE 2020
CONTINUING OPERATIONS
Other income
Exploration and evaluation costs expensed
Employee expenses
Other operational expenses
(Loss) fair value of securities in other entities
Results from operating activities
Non-operating expenses
Finance income
Finance expense
Net finance expenses
Loss before income tax
Income tax (expense)/benefit
Loss from continuing operations attributable to equity holders of the
Group
Other comprehensive income
Foreign currency reserve
Other comprehensive income for the year
Total Other comprehensive income for the year
Total comprehensive income for the year
Loss for the year is attributed to:
Non-controlling interest
Owners of Orion Minerals Ltd
Total comprehensive loss for the year is attributable to:
Non-controlling interest
Owners of Orion Minerals Ltd
LOSS PER SHARE (CENTS PER SHARE)
Basic loss per share
Diluted loss per share
Headline loss per share
Diluted headline loss per share
Notes
3
12
3
3
20
26
26
21
21
21
21
2020
$’000
70
(2,169)
(1,230)
(4,651)
---
(7,980)
(11,258)
1,893
(1,293)
600
(18,638)
(13)
2019
$’000
62
(3,053)
(1,329)
(4,425)
(15)
(8,760)
(457)
227
(1,760)
(1,532)
(10,750)
---
(18,651)
(10,750)
433
---
433
437
---
437
(18,218)
(10,313)
(1,096)
(17,555)
(18,651)
(1,096)
(17,122)
(18,218)
(0.66)
(0.66)
(0.66)
(0.66)
(989)
(9,761)
(10,750)
(989)
(9,324)
(10,313)
(0.53)
(0.53)
(0.53)
(0.53)
The notes on pages 75 to 110 are an integral part of these consolidated financial statements.
71
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
AS AT 30 JUNE 2020
AS AT 30 JUNE 2020
ASSETS
Notes
ASSETS
Current assets
Cash and cash equivalents
Current assets
Trade and other receivables
Cash and cash equivalents
Rehabilitation bonds
Trade and other receivables
Prepayments
Rehabilitation bonds
Total current assets
Prepayments
Non-current assets
Total current assets
Other receivables
Non-current assets
Rehabilitation bonds
Other receivables
Right of use asset
Rehabilitation bonds
Loans to related parties
Right of use asset
Investment in preference shares
Loans to related parties
Plant and equipment
Investment in preference shares
Deferred exploration, evaluation and development
Plant and equipment
Total non-current assets
Deferred exploration, evaluation and development
Total assets
Total non-current assets
Total assets
LIABILITIES
LIABILITIES
Current liabilities
Trade and other payables
Current liabilities
Provisions
Trade and other payables
Loans
Provisions
Lease liability
Loans
Convertible notes
Lease liability
Total current liabilities
Convertible notes
Non-current liabilities
Total current liabilities
Provisions
Non-current liabilities
Loans
Provisions
Preference shares
Loans
Total non-current liabilities
Preference shares
Total liabilities
Total non-current liabilities
NET ASSETS
Total liabilities
NET ASSETS
EQUITY
EQUITY
Equity attributable to equity holders of the Company
Issued capital
Equity attributable to equity holders of the Company
Accumulated losses
Issued capital
Share based payments reserve
Accumulated losses
Other reserve
Share based payments reserve
Non-controlling interest - subsidiaries
Other reserve
Foreign currency translation reserve
Non-controlling interest - subsidiaries
Convertible note reserve
Foreign currency translation reserve
Total equity
Convertible note reserve
Total equity
Notes
4
5
4
6
5
6
5
6
5
7
6
9
7
10
9
11
10
12
11
12
Notes
Notes
13
14
13
15
14
7
15
17
7
17
14
15
14
16
15
16
Notes
Notes
18
18
18
19
18
25
19
25
2020
$’000
2020
$’000
1,222
169
1,222
---
169
73
---
1,464
73
1,464
93
2,352
93
16
2,352
3,333
16
18,262
3,333
57
18,262
40,253
57
64,366
40,253
65,830
64,366
2020
65,830
$’000
2020
$’000
958
145
958
8,194
145
17
8,194
---
17
9,314
---
9,314
1,684
---
1,684
---
---
1,684
---
10,998
1,684
54,832
10,998
2020
54,832
$’000
2020
$’000
146,648
(112,727)
146,648
3,384
(112,727)
19,956
3,384
(2,552)
19,956
123
(2,552)
---
123
54,832
---
54,832
2019
$’000
2019
$’000
1,395
407
1,395
276
407
68
276
2,146
68
2,146
152
2,372
152
---
2,372
2,042
---
---
2,042
95
---
40,991
95
45,652
40,991
47,798
45,652
2019
47,798
$’000
2019
$’000
1,999
170
1,999
3,947
170
---
3,947
5,724
---
11,840
5,724
11,840
2,363
1,748
2,363
2,529
1,748
6,640
2,529
18,480
6,640
29,318
18,480
2019
29,318
$’000
2019
$’000
121,530
(96,063)
121,530
2,687
(96,063)
---
2,687
1,244
---
(310)
1,244
230
(310)
29,318
230
29,318
The notes on pages 75 to 110 are an integral part of these consolidated financial statements.
The notes on pages 75 to 110 are an integral part of these consolidated financial statements.
72
ORION MINERALS ANNUAL REPORT 2020
Consolidated Statement of Financial Position
AS AT 30 JUNE 2020
Consolidated Statement of Financial Position
Deferred exploration, evaluation and development
Plant and equipment
Total non-current assets
Deferred exploration, evaluation and development
AS AT 30 JUNE 2020
ASSETS
ASSETS
Current assets
Cash and cash equivalents
Current assets
Trade and other receivables
Cash and cash equivalents
Rehabilitation bonds
Trade and other receivables
Prepayments
Rehabilitation bonds
Total current assets
Prepayments
Non-current assets
Total current assets
Other receivables
Non-current assets
Rehabilitation bonds
Other receivables
Right of use asset
Rehabilitation bonds
Loans to related parties
Right of use asset
Investment in preference shares
Loans to related parties
Plant and equipment
Investment in preference shares
Total assets
Total non-current assets
Total assets
LIABILITIES
LIABILITIES
Current liabilities
Trade and other payables
Current liabilities
Provisions
Trade and other payables
Loans
Provisions
Lease liability
Loans
Convertible notes
Lease liability
Total current liabilities
Convertible notes
Non-current liabilities
Total current liabilities
Provisions
Non-current liabilities
Loans
Provisions
Preference shares
Loans
Total non-current liabilities
Preference shares
Total liabilities
Total non-current liabilities
NET ASSETS
Total liabilities
NET ASSETS
EQUITY
EQUITY
Equity attributable to equity holders of the Company
Issued capital
Equity attributable to equity holders of the Company
Accumulated losses
Issued capital
Share based payments reserve
Accumulated losses
Other reserve
Share based payments reserve
Non-controlling interest - subsidiaries
Other reserve
Foreign currency translation reserve
Non-controlling interest - subsidiaries
Convertible note reserve
Foreign currency translation reserve
Total equity
Convertible note reserve
Total equity
Notes
Notes
4
5
4
6
5
6
5
6
5
7
6
9
7
10
9
11
10
12
11
12
13
14
13
15
14
7
15
17
7
17
14
15
14
16
15
16
18
18
18
19
18
25
19
25
Notes
Notes
Notes
Notes
2020
$’000
2020
$’000
1,222
169
1,222
---
169
73
---
1,464
73
1,464
93
2,352
93
16
2,352
3,333
16
18,262
3,333
18,262
57
40,253
57
64,366
40,253
65,830
64,366
2020
65,830
$’000
2020
$’000
958
145
958
8,194
145
8,194
17
---
17
9,314
---
9,314
1,684
1,684
---
---
---
1,684
---
10,998
1,684
54,832
10,998
2020
54,832
$’000
2020
$’000
146,648
(112,727)
146,648
(112,727)
3,384
19,956
3,384
(2,552)
19,956
(2,552)
123
123
---
54,832
---
54,832
2019
$’000
2019
$’000
1,395
407
1,395
276
407
68
276
2,146
68
2,146
152
2,372
152
2,372
---
2,042
---
2,042
---
95
---
40,991
95
45,652
40,991
47,798
45,652
2019
47,798
$’000
2019
$’000
1,999
170
1,999
3,947
170
3,947
---
5,724
---
11,840
5,724
11,840
2,363
1,748
2,363
2,529
1,748
6,640
2,529
18,480
6,640
29,318
18,480
2019
29,318
$’000
2019
$’000
121,530
(96,063)
121,530
(96,063)
2,687
2,687
---
1,244
---
(310)
1,244
(310)
230
29,318
230
29,318
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2020
Cash flows from operating activities
Payment for exploration and evaluation
Payments to suppliers and employees
Interest received
Interest paid
Income taxes paid
Other receipts
Notes
2020
$’000
(4,191)
(3,961)
40
(383)
(13)
228
2019
$’000
(4,556)
(4,721)
93
(1,757)
---
236
Net cash used in operating activities
4
(8,280)
(10,705)
Cash flows from investing activities
Purchase of plant and equipment
Payments for exploration and evaluation
Guarantees on deposit
Term deposit funds released
Proceeds from sale of tenements
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue expenses
Borrowings provided to joint venture operations
Payment of lease liabilities
Proceeds from borrowings
Repayment of borrowings
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate on cash at end of financial year
(3)
(5,616)
---
68
---
(5,551)
12,800
(324)
(296)
(160)
2,000
---
14,020
189
1,395
(362)
(4)
(10,501)
(72)
---
2,500
(8,077)
19,234
(425)
(858)
---
3,000
(5,498)
15,453
(3,329)
4,811
(87)
CASH ON HAND AND AT BANK AT END OF YEAR
4
1,222
1,395
The notes on pages 75 to 110 are an integral part of these consolidated financial statements.
The notes on pages 75 to 110 are an integral part of these consolidated financial statements.
The notes on pages 75 to 110 are an integral part of these consolidated financial statements.
73
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2020
30 June 2020
Issued
capital
Accumul
ated
losses
Non-
controlling
interest
Foreign
currency
translation
reserve
Other
reserve
Convertib
le note
reserve
Share
based
payments
reserve
Total
equity
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
Balance at 1 July 2019
121,530
(96,063)
1,244
(310)
Loss for the period
Other comprehensive loss
---
---
(17,555)
(1,096)
---
---
Total comprehensive loss for the
period
---
(17,555)
(1,096)
Transactions with owners in their capacity as owners:
Contributions of equity, net costs
25,118
Convertible notes reserve
Transfer of share options expired
Share-based payments expense
Transactions between owners
---
---
---
---
---
230
615
---
46
---
---
---
---
(2,700)
---
433
433
---
---
---
---
---
---
---
---
---
---
---
---
---
19,956
230
2,687
29,318
---
---
---
---
(230)
---
---
---
---
(18,651)
---
433
---
(18,218)
---
---
(615)
25,118
---
---
1,312
1,312
---
17,302
Total transactions with owners
25,118
892
(2,700)
---
19,956
(230)
697
43,732
Balance at 30 June 2020
146,648
(112,727)
(2,552)
123
19,956
---
3,384
54,832
30 June 2019
Issued
capital
Accumulate
d losses
Non-
controlling
interest
Foreign
currency
translation
reserve
Convertible
note
reserve
Share
based
payments
reserve
Total
equity
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
Balance at 1 July 2018
102,460
(87,367)
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
---
---
---
Transactions with owners in their capacity as owners:
Contributions of equity, net costs
19,070
Foreign translation reserve
Transfer of share options expired
Share-based payments expense
---
---
---
Total transactions with owners
19,070
(9,761)
---
2,233
(989)
---
(9,761)
(989)
---
---
1,065
---
1,065
---
---
---
---
---
Balance at 30 June 2019
121,530
(96,063)
1,244
127
---
---
---
---
(437)
---
---
(437)
(310)
230
2,103
19,786
---
---
---
---
---
---
---
---
---
---
(10,750)
---
---
(10,750)
---
---
(1,065)
19,070
(437)
---
1,649
1,649
584
20,282
230
2,687
29,318
The notes on pages 75 to 110 are an integral part of these consolidated financial statements.
74
ORION MINERALS ANNUAL REPORT 2020
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
30 June 2020
1 CORPORATE INFORMATION
Issued
capital
Accumul
Non-
ated
controlling
losses
interest
Foreign
currency
Other
translation
reserve
reserve
Convertib
le note
reserve
Share
based
payments
reserve
Total
equity
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
Orion Minerals Limited (Company) is a company domiciled in Australia. The address of the Company’s
registered office is Suite 617, 530 Little Collins Street, Melbourne, Victoria, 3000. The consolidated financial
statements as at and for the year ended 30 June 2020 comprised the Company and its subsidiaries,
(together referred to as the Group). The Group is a for-profit group and is primarily involved in copper, zinc,
nickel, gold and platinum group elements (PGE) exploration, evaluation and development.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
financial
accordance
Statement of compliance
(i)
been
consolidated
The
Australian
prepared
in
Accounting Standards
statements
comply with International Financial Reporting Standards (IFRSs) adopted by the International Accounting
by the Board of
Standards
directors on
statements
with
the
(AASB) and the Corporations Act 2001. The consolidated financial
general
Accounting
financial statements were
statements
adopted
(IASB).
September
authorised for issue
which
by
Board
22
consolidated
Standards
Australian
purpose
financial
Board
(AAS)
have
2020.
The
are
(ii)
The
otherwise
Basis of measurement
consolidated
financial
stated.
statements
have
been
prepared
on
the
historical
cost
basis
except
where
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial
except as required
by the new accounting standards and interpretations adopted as disclosed in
statements and have been applied consistently by the Group
Note
2(b).
Certain comparative amounts have been reclassified to conform with the current year’s presentation.
Going
concern
(iii)
The financial statements have been prepared on the going concern basis, which contemplates continuity
of normal business activities and the realisation of assets and discharge of liabilities in the normal course of
business.
Balance at 1 July 2019
121,530
(96,063)
1,244
(310)
230
2,687
29,318
Loss for the period
(17,555)
(1,096)
Other comprehensive loss
---
---
Total comprehensive loss for the
period
---
(17,555)
(1,096)
Transactions with owners in their capacity as owners:
Contributions of equity, net costs
25,118
Convertible notes reserve
Transfer of share options expired
Share-based payments expense
---
230
615
---
46
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
433
433
---
---
---
---
---
---
---
---
---
---
---
---
(230)
---
(18,651)
---
433
---
(18,218)
---
---
(615)
25,118
---
---
1,312
1,312
---
17,302
Transactions between owners
(2,700)
19,956
Total transactions with owners
25,118
892
(2,700)
---
19,956
(230)
697
43,732
Balance at 30 June 2020
146,648
(112,727)
(2,552)
123
19,956
---
3,384
54,832
30 June 2019
Issued
Accumulate
capital
d losses
Non-
controlling
interest
Foreign
currency
translation
reserve
Convertible
note
reserve
Share
based
payments
reserve
Total
equity
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
Balance at 1 July 2018
102,460
(87,367)
230
2,103
19,786
Total comprehensive loss for the year
(9,761)
(989)
---
(10,750)
Loss for the year
Other comprehensive loss
---
---
---
---
---
---
(9,761)
---
---
---
---
1,065
Transactions with owners in their capacity as owners:
Contributions of equity, net costs
19,070
Foreign translation reserve
Transfer of share options expired
Share-based payments expense
Total transactions with owners
19,070
1,065
2,233
(989)
---
---
---
---
---
---
127
---
---
---
(437)
---
---
---
(437)
(310)
---
---
---
---
---
---
---
---
(10,750)
---
---
---
---
---
19,070
(437)
---
(1,065)
1,649
1,649
584
20,282
Balance at 30 June 2019
121,530
(96,063)
1,244
230
2,687
29,318
The notes on pages 75 to 110 are an integral part of these consolidated financial statements.
•
•
•
The Group had cash reserves of $1.2M and had negative operating cash flows of $8.3M for the
ended 30 June 2020;
year
The Group had negative working capital at 30 June 2020 of $7.9M; and
The Group’s main activity is exploration, evaluation and development of base metal, gold and PGE
projects in South Africa (Areachap Belt, Northern Cape) and as such it does not have a source of
income, rather it is reliant on debt and / or equity raisings to fund its activities.
These factors indicate a material uncertainty that may cast significant doubt as to whether the Group will
continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the
normal course of business and at the amounts stated in the financial report.
Current forecasts indicate that cash on hand as at 30 June 2020 will not be sufficient to fund planned
exploration and operational activities during the next twelve months and to maintain the Group’s
tenements in good standing. Accordingly, the Group will be required to raise additional equity, consider
alternate funding options or a combination of the foregoing.
75
disclosed in the financial statements, the Group recorded a net loss of $18.65M for the year ended 30
and the Group’s position as at 30 June
2020
was as follows:
As
June 2020
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The Directors believe that there are reasonable grounds to believe that the Group will be able to continue
as a going concern, after consideration of the following factors:
•
•
•
They are confident that the Group will raise sufficient cash to ensure that the Group can meet its
minimum exploration and operational expenditure commitments for at least the next twelve months
and maintain the Group’s tenements in good standing and pay its debts, as and when they fall
due. The Company has previously been successful in raising capital as and when required as
evidenced by capital raising initiatives of $12.8M (before costs) during the year ended 30 June 2020
and in August 2020, a further $6.2M to support the Company’s exploration and plans. In addition,
Tembo Capital Mining Fund II LP and its affiliated entities (Tembo Capital) subscribed for $2.1M worth
of ordinary fully paid shares (Shares) (subject to shareholder approval, to be sought at a general
meeting of Orion shareholders to be held on 29 September 2020 and Foreign Investment Review Board
(FIRB) approval). The amount subscribed for by Tembo Capital will be offset against the Loan Facility
balance, thereby reducing the Company’s debt by $2.1M and repaying the Loan Facility in full (refer
Note 16).
In July 2020, the Company announced an extension to the term of the loan entered into with Anglo
American sefa Mining Fund (AASMF), from 31 July 2020 to 30 April 2021 (refer Note 16).
Based on the outcome of the updated bankable feasibility study released May 2020, with an initial 12
year Foundation Phase (refer ASX release 26 May 2020), the Prieska Copper-Zinc Project (Prieska
Project) Mineral Reserve, results to date from exploration programs and the Company’s ability to
successfully raise capital in the past, the Directors are confident of obtaining the continued support
of the Company’s shareholders and a number of brokers that have supported the Company’s
previous capital raisings.
Additionally, the Company continues to progress discussions with several banks and strategic equity
partners in relation to funding for the development of the Prieska Copper Mine. With all permits
required to re-start the mine now in place, progress on post optimisation works is well advanced and
a positive funding decision expected by the end of 2020.
The amount and timing of any funding for operational and exploration plans, is the subject of ongoing
review.
Accordingly, the financial statements for the year ended 30 June 2020 have been prepared on a going
concern basis as, in the opinion of the Directors, the Group will be in a position to continue to meet its
operating costs and exploration expenditure commitments and pay its debts as and when they fall due
for at least twelve months from the date of this report.
However, the Directors recognise that if sufficient additional funding is not raised from the issue of capital
or through alternative funding sources, there is a material uncertainty as to whether the going concern
basis is appropriate with the result that the Group may relinquish title to certain tenements and may have
to realise its assets and extinguish its liabilities other than in the ordinary course of business and at amounts
different from those stated in the financial report. No allowance for such circumstances has been made in
the financial report.
(b) New accounting standards and interpretations
(i) New accounting standards
A number of new standards, amendments to standards and interpretations issued by the AASB which are
not yet mandatorily applicable to the Group have not been applied in preparing these consolidated
financial statements. Those which may be relevant to the Group are set out below. The Group does not
plan to adopt these standards early.
76
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 16 Leases
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees
eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases
of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement
of financial position. Straight-line operating lease expense recognition is replaced with a depreciation
charge for the right-of-use assets (included in operating costs) and an interest expense on the recognised
lease liabilities (included in finance costs). In the earlier periods of the lease, the expenses associated with
the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However, EBITDA
(Earnings Before Interest, Tax, Depreciation and Amortisation) results improve as the operating expense is
now replaced by interest expense and depreciation in profit or loss. For classification within the statement
of cash flows, the interest portion is disclosed in operating activities and the principal portion of the lease
payments are separately disclosed in financing activities.
AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not
been restated. The impact of adoption on opening accumulated losses as at 1 July 2019 was no material
impact, based on management assessment, as all operating leases held within the Group were of low value
or for a period of less than 12 months. As such, the group has elected to apply the lease practical expedients
whereby leases with periods less than 12 months or low value are not capitalised on the balance sheet and
are instead recognised as operating expenses within the profit or loss statement.
AASB 23 Uncertainty over Income Tax Treatments
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. With the
diversity that exists with respect to recognition and measurement of uncertain tax positions, this standard
outlines suggested requirements for accounting of uncertain tax positions. The first, if an entity concludes
that a ‘probable’ acceptance of tax position will be accepted by tax authorities, then no additional action
is required. The second, if an entity concludes it is ‘not probable’ that tax authorities will accept a tax
position, it is then required to use the ‘the most like amount’ or ‘expected value’ in determining its tax
balances. Calculation of the current tax liability in the financial statements is required as if the tax authorities
were going to perform a tax audit.
The Company has reviewed its tax position in all jurisdictions as at 1 July 2019 and 30 June 2020 and
determined that it is unlikely that there will be any material impact on the Group’s tax liability position as a
result of adoption of this standard.
(c) Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Orion
Minerals Limited (Parent Company) from time to time during the year and at 30 June 2020 and the results
of its controlled entities for the year then ended. The effects of all transactions between entities in the
economic entity are eliminated in full.
The financial statements of the subsidiary are prepared for the same reporting period as the parent entity,
using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting
policies that may exist.
Subsidiaries
(i)
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date on which control commences until the date on which control ceases.
(ii) Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary,
and any related NCI and other components of equity. Any resulting gain or loss is recognised in the
Statement of Profit or Loss. Any interest retained in the former subsidiary is measured at fair value when
control is lost.
77
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(iii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees
are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses
are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of
impairment.
(d) Foreign currency translation
The functional and presentation currency of the Company and its Australian subsidiary’s is Australian
Dollars. For comparative purposes, the consolidated financial statements may make reference to South
African Rand (ZAR). Transactions in foreign currencies are translated to the respective functional currency
of the Group at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency
at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair
value in a foreign currency are translated to the functional currency at the exchange rate when the fair
value was determined. Foreign currency differences are generally recognised in the Statement of Profit or
Loss. Non-monetary items that are measured based on historical cost in a foreign currency are not
translated.
(e) Investment and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included
as part of the initial measurement, except for financial assets at fair value through the Statement of Profit
or Loss. Such assets are subsequently measured at either amortised cost or fair value depending on their
classification. Classification is determined based on both the business model within which such assets are
held and the contractual cash flow characteristics of the financial asset unless, an accounting mismatch
is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.
When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is
written off.
Financial assets at fair value through profit or loss
(i)
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through the Statement of Profit or Loss. Typically, such financial
assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term
with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in the Statement of Profit or Loss.
(ii) Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them
as such upon initial recognition.
(iii) Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through the Statement of Profit or Loss, transaction costs that are directly attributable
to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through
profit or loss are expensed in the Statement of Profit or Loss.
(iv) Impairment
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which
are either measured at amortised cost or fair value through other comprehensive income. The
measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each
reporting period as to whether the financial instrument's credit risk has increased significantly since initial
recognition, based on reasonable and supportable information that is available, without undue cost or
effort to obtain.
78
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FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-
month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected
credit losses that is attributable to a default event that is possible within the next 12 months. Where a
financial asset has become credit impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of
expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in the
Statement of Profit or Loss.
(f) Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint
control. Investments in associates are accounted for using the equity method. Under the equity method,
the share of the profits or losses of the associate is recognised in profit or loss and the share of the
movements in equity is recognised in other comprehensive income. Investments in associates are carried
in the statement of financial position at cost plus post-acquisition changes in the consolidated entity’s share
of the net assets of the associate.
When the consolidated entity’s share of losses in an associate equals or exceeds its interest in the associate,
including any unsecured long-term receivables, the consolidated entity does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate.
Subsequent expenditure is capitalised only when it is probable that the future economic benefits
associated with the expenditure will flow to the Group.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale
are presented separately from the other assets in the Statement of Financial Position. The liabilities of a
disposal group classified as held for sale are presented separately from other liabilities in the Statement of
Financial Position.
(g) Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is calculated on a straight line basis using estimated remaining useful life of the asset. The
estimated useful lives for the current and comparative period are as follows:
Plant and equipment - over 3 to 15 years. Depreciation methods, useful lives and residual values are
reviewed at each reporting date and adjusted if appropriate.
(h) Impairment
(i) Non-financial assets
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired.
Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount.
Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired
and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to dispose and value in use. It is determined for
an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs
to dispose and it does not generate cash inflows that are largely independent of those from other assets
or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to
which the asset belongs.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are recognised in the Statement of Profit or Loss. Impairment
losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of
any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit
(group of units) on a pro rata basis.
79
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in
the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been recognised.
(i)
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are
generally due for settlement within 30 - 60 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which
uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have
been grouped based on days overdue. An estimate for doubtful debts is made when collection of the full
amount is no longer probable. Bad debts are written off when identified.
(j) Cash and cash equivalents
Cash and short-term deposits in the Statement of Financial Position comprise cash at bank and in hand
and short-term deposits with an original maturity of three months or less.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
Funds placed on deposit with financial institutions to secure performance bonds are classified as non-
current other receivables and not included in cash and cash equivalents.
(k) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost
and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
(l) Borrowings and finance costs
Loans and borrowings are initially recognised at the fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortised cost using the effective interest method.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability
in the statement of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market
rate for an equivalent non-convertible bond and this amount is carried as a non-current liability on the
amortised cost basis until extinguished on conversion or redemption. The increase in the liability due to the
passage of time is recognised as a finance cost. The remainder of the proceeds are allocated to the
conversion option that is recognised and included in shareholders equity as a convertible note reserve,
net of transaction costs. The carrying amount of the conversion option is not remeasured in the subsequent
years. The corresponding interest on convertible notes is expensed to the Statement of Profit or Loss.
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs
are expensed in the period in which they are incurred.
(m) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
80
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n) Employee benefits
Share based payments
(i)
The cost of equity-settled transactions with employees is measured by reference to the fair value at the
date at which they are granted. The fair value is determined using the Black Scholes model. Further details
are given in Note 30.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over
the period in which the performance conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (Vesting Date).
The cumulative expense recognised for equity-settled transactions at each reporting date until Vesting
Date reflects (i) the extent to which the vesting period has surpassed and (ii) the number of awards that,
in the opinion of the directors of the Group, will ultimately vest. This opinion is formed based on the best
available information at balance date. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant
date. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
conditional upon a market condition. Where the terms of an equity-settled award are modified, as a
minimum an expense is recognised as if the terms had not been modified. In addition, an expense is
recognised for any increase in the value of the transaction as a result of the modification, as measured at
the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award and designated as a replacement award on the date that it is
granted, the cancelled and new award are treated as if they were a modification of the original award,
as described in the previous paragraph.
(ii) Employee benefits
Annual leave liabilities are measured at the amounts expected to be paid when the liabilities are settled.
Long service leave liabilities are measured at the present value of the estimated future cash outflows for
the services provided by employees up to the reporting date.
Liabilities not expected to be settled within twelve months are discounted using market yields at the
reporting date on high quality corporate bonds with terms to maturity that match, as closely as possible to
the related liability.
(o) Revenue
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer,
the consolidated entity: identifies the contract with a customer; identifies the performance obligations in
the contract; determines the transaction price which takes into account estimates of variable
consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be
delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that
depicts the transfer to the customer of the goods or services promised.
Interest
(i)
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial instrument) to
the net carrying amount of the financial asset.
(p) Income tax
Tax consolidation
(i)
The Company and its wholly-owned Australian resident entity are part of a tax-consolidated group. As a
consequence, all members of the tax-consolidated group are taxed as a single entity from that date. The
head entity within the tax-consolidated group is Orion Minerals Ltd.
81
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q) Other taxes
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST) or value
added tax (VAT) except where the GST or VAT incurred on a purchase of goods and services is not
recoverable from the taxation authority, in which case the GST or VAT is recognised as part of the cost of
acquisition of the asset or as part of the expense item as applicable. Receivables and payables are stated
with the amount of GST or VAT included. The net amount of GST or VAT recoverable from, or payable to,
the taxation authority is included as part of receivables or payables in the Statement of Financial Position.
Cash flows are included in the Cash Flow statement on a gross basis and the GST or VAT component of
cash flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxation authority are classified as operating cash flows.
(r) Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately
for each area of interest. Such expenditure comprises net direct costs and an appropriate portion of
related overhead expenditure which can be directly attributed to operational activities in the area of
interest, but does not include general overheads or administrative expenditure not having a specific nexus
with a particular area of interest.
Each area of interest is limited to a size related to a known or probable mineral resource capable of
supporting a mining operation.
Expenditure incurred on activities that precede exploration and evaluation of mineral resources, including
all expenditure incurred prior to securing legal rights to explore an area, is expensed as incurred. For each
area of interest the expenditure is recognised as an exploration and evaluation asset where the following
conditions are satisfied:
•
such costs are expected to be recouped through successful development and exploitation of the
area of interest or, alternatively, by its sale; or
• exploration activities in the area of interest have not, at balance date reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves.
Exploration and evaluation assets include:
• acquisition of rights to explore;
•
• exploration drilling, trenching and sampling; and
• activities in relation to evaluating the technical feasibility and commercial viability of extracting the
topographical, geological and geophysical studies;
mineral resources.
General and administrative costs are not recognised as an exploration and evaluation asset. These costs
are expensed as incurred. Exploration and evaluation assets are classified as tangible or intangible
according to the nature of the assets. As the assets are not yet ready for use, they are not depreciated.
Assets that are classified as tangible assets include:
• piping and pumps;
•
• exploration vehicles and drilling equipment.
tanks; and
Assets that are classified as intangible assets include:
• drilling rights;
• acquired rights to explore;
• exploratory drilling costs; and
•
trenching and sampling costs.
Exploration expenditure which no longer satisfies the above policy is written off. In addition, a provision is
raised against exploration expenditure where the directors are of the opinion that the carried forward net
cost may not be recoverable under the above policy. The increase in the provision is charged against the
profit or loss for the year.
82
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
When an area of interest is abandoned, any expenditure carried forward in respect of that area is written
off in the year in which the decision to abandon is made, firstly against any existing provision for that
expenditure, with any remaining balance being charged to the Statement of Profit or Loss.
Expenditure is not carried forward in respect of any area of interest/mineral resource unless the economic
entity’s rights of tenure to that area of interest are current. Amortisation is not charged on areas under
development, pending commencement of production.
Exploration and evaluation assets are assessed for impairment if:
•
•
the term of exploration license in the specific area of interest has expired during the reporting
period or will expire in the near future, and is not expected to be renewed;
substantive expenditure on further exploration for and evaluation of mineral resources in the
specific area are not budgeted nor planned;
• exploration for and evaluation of mineral resources in the specific area have not led to the
discovery of commercially viable quantities of mineral resources and a decision has been made
to discontinue such activities in the specified area; or
sufficient data exists to indicate that, although a development in the specific area is likely to
proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered
in full from successful development or by sale.
•
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating
units to which the exploration activity relates. The cash generating unit shall not be larger than the area of
interest. Each area of interest is reviewed at the end of each accounting period and accumulated costs
are written off to the extent that they are not expected to be recoverable in the future.
(s) Rehabilitation provision
A provision has been made for the present value of anticipated costs for future rehabilitation of land
explored or mined. The Group's mining and exploration activities are subject to various laws and regulations
governing the protection of the environment. The Group recognises management's best estimate for assets
retirement obligations and site rehabilitations in the period in which they are incurred. Actual costs incurred
in the future periods could differ materially from the estimates. Additionally, future changes to
environmental laws and regulations, life of mine estimates and discount rates could affect the carrying
amount of this provision.
(t) Critical accounting judgements and key sources of estimation uncertainty
In the application of AASB’s management is required to make judgments, estimates and assumptions
about carrying values of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and various other factors that
are believed to be reasonable under the circumstance, the results of which form the basis of making the
judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the
estimate is revised if the revision affects only that year, or in the year of the revision and future years if the
revision affects both current and future years.
Judgments made by management that have significant effects on the financial statements and estimates
with a significant risk of material adjustments in the next year are disclosed, where applicable, in the
relevant notes to the financial statements and include:
• Note 12 - Deferred exploration, evaluation and development
Exploration and evaluation costs have been capitalised on the basis that exploration, mine
development early works and BFS optimisation works are ongoing and that the Group may
commence commercial production in the future, from which time the costs will be amortised in
proportion to the depletion of the mineral resources. Key judgements are applied in considering
costs to be capitalised which includes determining expenditures directly related to these activities
and allocating overheads between those that are expensed and capitalised. In addition, costs are
only capitalised that are expected to be recovered either through successful development or sale
of the relevant mining interest.
83
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
• Note 14 - Provisions
A provision has been made for the present value of anticipated costs for future rehabilitation of
land explored or mined. The Group’s exploration activities are subject to various laws and
regulations governing the protection of the environment. The Group recognises management's
best estimate for assets site rehabilitations in the period in which they are incurred. Actual costs
incurred in the future periods could differ materially from the estimates.
• Note 27 - Measurement of share based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
by using Black-Scholes model taking into account the terms and conditions upon which the
instruments were granted. The accounting estimates and assumptions relating to equity-settled
share-based payments would have no impact on the carrying amounts of assets and liabilities
within the next annual reporting period but may impact profit or loss and equity.
(u) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding which have been issued for no consideration in relation to the dilutive potential
ordinary shares, which comprise share options granted to employees, contract personnel, shareholders
and corporate entities engaged by the Group, that are expected to be exercised.
(v) Segment reporting
(i) Determination and presentation of operating segments
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Group’s other components. All operating segments’ operating results are regularly reviewed by the
Group’s Managing Director and Chief Executive Officer (Chief Operating Decision Maker of the Group) to
make decisions about resources to be allocated to the segment and assess its performance, and for which
discrete financial information is available.
Segment results that are reported to the Managing Director and Chief Executive Officer include items
directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters), head office
expenses, and income tax assets and liabilities. Segment capital expenditure is the total cost incurred
during the period to acquire plant and equipment, and intangible assets other than goodwill.
(w) Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares and share options are recognised as a deduction from equity, net of any tax effects. Dividends on
ordinary shares are recognised as a liability in the period in which they are declared.
(x) Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair value, for
both financial and non-financial assets and liabilities. Fair values have been determined for measurement
and / or disclosure purposes based on the following methods. When applicable, further information about
the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
84
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FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Share-based payment transactions
(i)
The fair value of the employee share options and the share appreciation rights is measured using the Black-
Scholes formula. Measurement inputs include share price on measurement date, exercise price of the
instrument, expected volatility (based on weighted average historic volatility adjusted for changes
expected due to publicly available information), weighted average expected life of the instruments
(based on historical experience and general option holder behavior), expected dividends, and the risk-
free interest rate (based on government bonds). Service and non-market performance conditions
attached to the transactions are not taken into account in determining fair value.
(y) Fair value measurement hierarchy
The Group is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1:
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at
the measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly; and Level 3: Unobservable inputs for the
asset or liability. Considerable judgement is required to determine what is significant to fair value and
therefore which category the asset or liability is placed in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These
include discounted cash flow analysis or the use of observable inputs that require significant adjustments
based on unobservable inputs.
(z) Rounding of amounts
The Company is of a kind referred to in the Corporations Instrument 2016/191, issued by the Australian
Securities and Investment Commission, relation to ‘rounding off’. Amounts in this report have been
rounded off in accordance with that Corporations Instrument to the nearest thousand dollars or in certain
cases, to the nearest dollar.
3
REVENUES AND EXPENSES
Other income
Services rendered to associate companies
Total other income
Other operational expenses
Contractor, consultants and advisory expense
Investor and public relations
Communications and information technology
Depreciation
Loss on disposal of plant and equipment
Occupancy
Travel and accommodation
Directors fees and employment expenses
Other corporate and administrative expenses
Total other operational expenses
Non-operating expenses
Net foreign exchange (gain)/loss
Other items written-off
Profit on sale of portion of subsidiary
Share based payment expense
Total non-operating expenses
2020
$’000
70
70
2020
$’000
3,013
559
125
176
41
80
60
429
168
4,651
2020
$’000
9,957
---
(11)
1,312
11,258
2019
$000
62
62
2019
$’000
2,595
624
82
47
10
102
480
405
80
4,425
2019
$’000
(1,152)
(40)
---
1,649
457
85
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
4 CASH AND CASH EQUIVALENTS
Other expenses
Cash and cash equivalents
Short term deposits
Reconciliation
Net loss
Adjustment for:
Depreciation
Loss on disposal of PPE
Profit on sale of portion of subsidiary
Share base payments expense
Gain/(loss) on movement in securities in other entities
Other items written off
(Gain)/loss on foreign exchange
Changes in assets and liabilities:
Decrease in trade and other payables
Decrease/(Increase) other current assets
Decrease/(Increase) other non-current assets
(Decrease)/Increase in other non-current liabilities
(Decrease)/Increase in provisions
Net cash used in operating activities
5
TRADE AND OTHER RECEIVABLES
Other expenses
Current receivables:
Security deposits (a)
Other receivables
Interest receivable
Taxes receivable
Non-current receivables:
Security deposits (a)
Deposits
2020
$’000
1,221
1
1,222
2020
$’000
2019
$’000
1,391
4
1,395
2019
$’000
(18,651)
(10,750)
176
41
(11)
1,312
---
---
9,958
(1,041)
292
(1,369)
1,718
(705)
(8,280)
2020
$’000
23
8
---
138
169
3
90
93
47
10
---
1,649
(15)
(9)
(1,152)
(363)
2,736
---
(3,288)
430
(10,705)
2019
$’000
14
31
2
360
407
29
123
152
Other receivables are non-interest bearing and are generally on 30-day terms.
(a) Security deposits comprise cash placed on deposit to secure bank guarantees in respect of obligations
entered into for office rental obligations in South Africa and Australia. These deposits are not available
to finance the Group’s day to day operations.
86
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FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
6
REHABILITATION BONDS
Other expenses
Current
Environmental bonds
Non-current
Environmental bonds
Total
2020
$’000
---
2,352
2,352
2019
$’000
276
2,372
2,648
Environmental bonds are cash placed on deposit to secure bank guarantees in respect of obligations
entered into for environmental performance bonds issued in favour of the relevant government body for
projects located in South Africa and Victoria, Australia. The guarantees are held as both current and non-
current receivables.
The Group also has environmental obligations for the Prieska Project. In March 2020, following receipt of
regulatory approval, the bond was transferred from Prieska Copper Mines Trust to Centriq Insurance
Company Ltd, a company established to meet the financial provisioning requirements of Mining Rights in
South Africa. Funds held by Centriq relate to premium paid to Centriq and represent collateral held by
Centriq against guarantees that have been issued. Funds held by Centriq on behalf of the Group are
refundable to the Group when the guarantees expire. The bond can be applied by the government body
for rehabilitation works should the Group fail to meet regulatory standards for environmental rehabilitation.
This deposit offsets the provisional non-current liability held in the Groups accounts (refer Note 14).
7
LEASES AND RIGHT OF USE ASSET
Leases
Statement of Financial Position
Property, plant and equipment
Lease liability
Statement of Profit and Loss
Depreciation
Disposals
Finance expense
2020
$’000
16
(17)
(143)
(40)
(12)
2019
$’000
---
---
---
---
---
The adoption of AASB 16 on 1 July 2019 had no material impact on opening values. Subsequent to the date of
adoption, the Group’s assessment of leases up to 30 June 2020 resulted in adjustments, as shown above.
Other expenses
Right of use asset
Opening Cost
Accumulated depreciation
Opening carrying amount
Movement
Additions
Disposals or write offs
Effect of movement in exchange rate
Depreciation expense for the year
Closing carrying amount
Land and buildings
$’000
Vehicles
$’000
---
---
---
37
---
5
(39)
3
---
---
---
128
(23)
12
(104)
13
87
ORION MINERALS ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
6
REHABILITATION BONDS
Other expenses
Current
Environmental bonds
Non-current
Environmental bonds
Notes to the Consolidated Financial Statements
Total
2,352
FOR THE YEAR ENDED 30 JUNE 2020
Environmental bonds are cash placed on deposit to secure bank guarantees in respect of obligations
REHABILITATION BONDS
entered into for environmental performance bonds issued in favour of the relevant government body for
6
projects located in South Africa and Victoria, Australia. The guarantees are held as both current and non-
current receivables.
Other expenses
The Group also has environmental obligations for the Prieska Project. In March 2020, following receipt of
Current
regulatory approval, the bond was transferred from Prieska Copper Mines Trust to Centriq Insurance
Environmental bonds
Company Ltd, a company established to meet the financial provisioning requirements of Mining Rights in
South Africa. Funds held by Centriq relate to premium paid to Centriq and represent collateral held by
Non-current
Centriq against guarantees that have been issued. Funds held by Centriq on behalf of the Group are
refundable to the Group when the guarantees expire. The bond can be applied by the government body
Environmental bonds
2,352
2,372
for rehabilitation works should the Group fail to meet regulatory standards for environmental rehabilitation.
This deposit offsets the provisional non-current liability held in the Groups accounts (refer Note 14).
Total
7
LEASES AND RIGHT OF USE ASSET
2020
$’000
---
2,352
2020
$’000
---
2,352
2020
2019
$’000
276
2,372
2,648
2019
$’000
276
2,648
2019
Environmental bonds are cash placed on deposit to secure bank guarantees in respect of obligations
entered into for environmental performance bonds issued in favour of the relevant government body for
projects located in South Africa and Victoria, Australia. The guarantees are held as both current and non-
current receivables.
Leases
$’000
$’000
Statement of Financial Position
Property, plant and equipment
Lease liability
Statement of Profit and Loss
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
The Group also has environmental obligations for the Prieska Project. In March 2020, following receipt of
regulatory approval, the bond was transferred from Prieska Copper Mines Trust to Centriq Insurance
Company Ltd, a company established to meet the financial provisioning requirements of Mining Rights in
South Africa. Funds held by Centriq relate to premium paid to Centriq and represent collateral held by
Centriq against guarantees that have been issued. Funds held by Centriq on behalf of the Group are
refundable to the Group when the guarantees expire. The bond can be applied by the government body
for rehabilitation works should the Group fail to meet regulatory standards for environmental rehabilitation.
This deposit offsets the provisional non-current liability held in the Groups accounts (refer Note 14).
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
Finance expense
Depreciation
Disposals
(143)
(12)
(17)
(40)
---
---
---
---
16
---
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The adoption of AASB 16 on 1 July 2019 had no material impact on opening values. Subsequent to the date of
7
adoption, the Group’s assessment of leases up to 30 June 2020 resulted in adjustments, as shown above.
LEASES AND RIGHT OF USE ASSET
2
2020
$’000
Land and buildings
$’000
2019
$’000
Vehicles
$’000
---
---
---
---
---
---
128
---
(23)
---
12
---
16
---
(17)
---
(143)
37
(40)
---
(12)
5
A provision has been made for the present value of anticipated costs for future rehabilitation of
land explored or mined. The Group’s exploration activities are subject to various laws and
regulations governing the protection of the environment. The Group recognises management's
best estimate for assets site rehabilitations in the period in which they are incurred. Actual costs
incurred in the future periods could differ materially from the estimates.
• Note 14 - Provisions
Other expenses
Leases
Right of use asset
Statement of Financial Position
Opening Cost
Property, plant and equipment
Accumulated depreciation
Lease liability
Opening carrying amount
Statement of Profit and Loss
Movement
Depreciation
Additions
Disposals
Disposals or write offs
Finance expense
Effect of movement in exchange rate
• Note 27 - Measurement of share based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
by using Black-Scholes model taking into account the terms and conditions upon which the
instruments were granted. The accounting estimates and assumptions relating to equity-settled
share-based payments would have no impact on the carrying amounts of assets and liabilities
within the next annual reporting period but may impact profit or loss and equity.
The adoption of AASB 16 on 1 July 2019 had no material impact on opening values. Subsequent to the date of
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
adoption, the Group’s assessment of leases up to 30 June 2020 resulted in adjustments, as shown above.
FOR THE YEAR ENDED 30 JUNE 2020
FOR THE YEAR ENDED 30 JUNE 2020
Depreciation expense for the year
Closing carrying amount
(104)
(39)
13
3
(u) Earnings per share
(v) Segment reporting
Land and buildings
$’000
Vehicles
$’000
Other expenses
---
---
---
Additions
Movement
Opening Cost
Right of use asset
Opening carrying amount
Accumulated depreciation
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
8 RESTRUCTURE OF BLACK ECONOMIC EMPOWERMENT OWNERSHIP
8 RESTRUCTURE OF BLACK ECONOMIC EMPOWERMENT OWNERSHIP
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding which have been issued for no consideration in relation to the dilutive potential
ordinary shares, which comprise share options granted to employees, contract personnel, shareholders
and corporate entities engaged by the Group, that are expected to be exercised.
In order to comply with the requirements of the South African Broad-Based Socio-Economic Empowerment
In order to comply with the requirements of the South African Broad-Based Socio-Economic Empowerment
Charter for the Mining and Minerals Industry, 2018 and its associated Implementation Guidelines (Mining Charter
Charter for the Mining and Minerals Industry, 2018 and its associated Implementation Guidelines (Mining Charter
2018), the Company began implementing necessary changes to its group structure within South Africa.
2018), the Company began implementing necessary changes to its group structure within South Africa.
In April 2019, Orion entered into an Memorandum of Understanding (MoU) with each of the then existing Black
In April 2019, Orion entered into an Memorandum of Understanding (MoU) with each of the then existing Black
Economic Empowerment (BEE) participants (being the trustees for the time being of the Mosiapoa Family Trust
Economic Empowerment (BEE) participants (being the trustees for the time being of the Mosiapoa Family Trust
(Mosiapoa), Power Matla (Pty) Ltd (Power Matla) and African Exploration and Mining Finance Corporation
(Mosiapoa), Power Matla (Pty) Ltd (Power Matla) and African Exploration and Mining Finance Corporation
(SOC) Ltd (AEMFC)) in its South African subsidiaries (being Prieska Copper Zinc Mine Pty Ltd (formerly Repli
(SOC) Ltd (AEMFC)) in its South African subsidiaries (being Prieska Copper Zinc Mine Pty Ltd (formerly Repli
Trading No 27 (Pty) Ltd) (PCZM), Vardocube (Pty) Ltd (Vardocube), Bartotrax (Pty) Ltd (Bartotrax) and Rich
Trading No 27 (Pty) Ltd) (PCZM), Vardocube (Pty) Ltd (Vardocube), Bartotrax (Pty) Ltd (Bartotrax) and Rich
Rewards Trading 437 (Pty) Limited (Rich Rewards)). In terms of those MoU’s (as amended from time to time), the
Rewards Trading 437 (Pty) Limited (Rich Rewards)). In terms of those MoU’s (as amended from time to time), the
existing BEE participants agreed to exchange their shares in Orion’s South African subsidiaries for approximately
existing BEE participants agreed to exchange their shares in Orion’s South African subsidiaries for approximately
Closing carrying amount
134M JSE-listed Orion Shares.
134M JSE-listed Orion Shares.
Disposals or write offs
(i) Determination and presentation of operating segments
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Group’s other components. All operating segments’ operating results are regularly reviewed by the
Group’s Managing Director and Chief Executive Officer (Chief Operating Decision Maker of the Group) to
make decisions about resources to be allocated to the segment and assess its performance, and for which
discrete financial information is available.
At the same time, Orion entered into a Memorandum of Agreement with two BEE entrepreneurs, Black Star
At the same time, Orion entered into a Memorandum of Agreement with two BEE entrepreneurs, Black Star
Minerals (Pty) Ltd (Black Star) and Kolobe Nala Investment Company (Pty) Ltd (KNI), in terms of which they
Minerals (Pty) Ltd (Black Star) and Kolobe Nala Investment Company (Pty) Ltd (KNI), in terms of which they
agreed to acquire a 20% interest in PCZM, as well as a 20% interest in Orion’s ownership interest in its
agreed to acquire a 20% interest in PCZM, as well as a 20% interest in Orion’s ownership interest in its
Jacomynspan Project (consisting of Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd).
Jacomynspan Project (consisting of Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd).
Segment results that are reported to the Managing Director and Chief Executive Officer include items
directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters), head office
expenses, and income tax assets and liabilities. Segment capital expenditure is the total cost incurred
during the period to acquire plant and equipment, and intangible assets other than goodwill.
In July 2019, Orion concluded a Revised Memorandum of Agreement with Black Star, KNI and Safika Resources
In July 2019, Orion concluded a Revised Memorandum of Agreement with Black Star, KNI and Safika Resources
(Pty) Ltd (Safika) in terms of which Safika joined Black Star and KNI as part of the BEE consortium outlined above.
(Pty) Ltd (Safika) in terms of which Safika joined Black Star and KNI as part of the BEE consortium outlined above.
Effect of movement in exchange rate
Depreciation expense for the year
(104)
(39)
(23)
128
13
37
12
---
---
---
---
3
5
(w) Share capital
(x) Determination of fair values
Various components of the BEE restructure were implemented during the reporting period in three phases. The
Various components of the BEE restructure were implemented during the reporting period in three phases. The
first phase was implemented in September 2019 and the second phase in November 2019.
first phase was implemented in September 2019 and the second phase in November 2019.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares and share options are recognised as a deduction from equity, net of any tax effects. Dividends on
ordinary shares are recognised as a liability in the period in which they are declared.
In September 2019, a major component of the BEE restructure was implemented. In terms of these transactions,
In September 2019, a major component of the BEE restructure was implemented. In terms of these transactions,
Mosiapoa and Power Matla exchanged their shares in PCZM, Rich Rewards and Bartotrax (as applicable) for
Mosiapoa and Power Matla exchanged their shares in PCZM, Rich Rewards and Bartotrax (as applicable) for
approximately 48.48M and 37.58M JSE listed Orion Shares, respectively, at a deemed issue price of $0.0314 per
approximately 48.48M and 37.58M JSE listed Orion Shares, respectively, at a deemed issue price of $0.0314 per
Share. Simultaneously, Prieska Resources Pty (Ltd) (Prieska Resources) acquired a 20% effective interest in the
Share. Simultaneously, Prieska Resources Pty (Ltd) (Prieska Resources) acquired a 20% effective interest in the
Company’s subsidiary, PCZM, for a purchase consideration of approximately ZAR142.78M (~$14.45M) and the
Company’s subsidiary, PCZM, for a purchase consideration of approximately ZAR142.78M (~$14.45M) and the
trustees for the time being of the Orion Siyathemba Community Trust (Prieska Community Trust) and the trustees
trustees for the time being of the Orion Siyathemba Community Trust (Prieska Community Trust) and the trustees
for the time being of the Orion Siyathemba Employees Trust (Prieska Employees Trust) each acquired an
for the time being of the Orion Siyathemba Employees Trust (Prieska Employees Trust) each acquired an
effective 5% interest in PCZM.
effective 5% interest in PCZM.
A number of the Group’s accounting policies and disclosures require the determination of fair value, for
both financial and non-financial assets and liabilities. Fair values have been determined for measurement
and / or disclosure purposes based on the following methods. When applicable, further information about
the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
While the acquisition by the Prieska Community Trust and the Prieska Employee Trust was for nominal
While the acquisition by the Prieska Community Trust and the Prieska Employee Trust was for nominal
consideration, in terms of the prevailing Mining Charter 2018 legislation, Orion and Prieska Resources will be
consideration, in terms of the prevailing Mining Charter 2018 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
entitled to recover the costs incurred on behalf of the two trusts in developing the Prieska Project from future
project cash-flows.
project cash-flows.
Prieska Resources is a BEE company whose shares are held by Black Star (17.31%), KNI (37.97%) and Safika
Prieska Resources is a BEE company whose shares are held by Black Star (17.31%), KNI (37.97%) and Safika
(44.72%). To fund the acquisition of the 20% interest in PCZM, the Company has provided vendor financing to
(44.72%). To fund the acquisition of the 20% interest in PCZM, the Company has provided vendor financing to
Prieska Resources comprising two parts:
Prieska Resources comprising two parts:
88
• A secured loan (repayable 12 months from closing date of securing Prieska Project financing) of
• A secured loan (repayable 12 months from closing date of securing Prieska Project financing) of
ZAR15.29M (~$1.29M) plus interest at the publicly quoted prime overdraft rate from time to time of
ZAR15.29M (~$1.29M) plus interest at the publicly quoted prime overdraft rate from time to time of
Investec Bank Limited, which arises as a result of PCZM delegating a portion of a loan owing to Agama
Investec Bank Limited, which arises as a result of PCZM delegating a portion of a loan owing to Agama
Exploration & Mining (Pty) Ltd (subsidiary of Orion) (Agama) to Prieska Resources, in exchange for which
Exploration & Mining (Pty) Ltd (subsidiary of Orion) (Agama) to Prieska Resources, in exchange for which
PCZM issues ordinary shares to Prieska Resources (refer Note 9); and
PCZM issues ordinary shares to Prieska Resources (refer Note 9); and
•
•
Preference shares issued by Prieska Resources to Agama to the value of ZAR200M (~$16.84M), the
Preference shares issued by Prieska Resources to Agama to the value of ZAR200M (~$16.84M), the
respective purchase consideration being 20% shareholding in PCZM (refer Note 10).
respective purchase consideration being 20% shareholding in PCZM (refer Note 10).
For the purposes of enabling Prieska Resources to acquire a 20% shareholding in PCZM, Nabustax and Itakane
For the purposes of enabling Prieska Resources to acquire a 20% shareholding in PCZM, Nabustax and Itakane
Trading 217 (Pty) Ltd (Itakane) entered into an asset-for-share transaction with Prieska Resources whereby
Trading 217 (Pty) Ltd (Itakane) entered into an asset-for-share transaction with Prieska Resources whereby
Nabustax and Itakane sold a collective 10.21% shareholding in PCZM, in consideration for which Prieska
Nabustax and Itakane sold a collective 10.21% shareholding in PCZM, in consideration for which Prieska
Resources issued preference shares (refer above) to the Sellers in proportion to their percentage of ordinary
Resources issued preference shares (refer above) to the Sellers in proportion to their percentage of ordinary
shares held in PCZM prior to the transaction. This transaction resulted in a one-off profit for the Orion subsidiaries
shares held in PCZM prior to the transaction. This transaction resulted in a one-off profit for the Orion subsidiaries
from the sale of their 20% holding in PCZM to Prieska Resources of ZAR132.7M ($13.3M). The profit comprises:
from the sale of their 20% holding in PCZM to Prieska Resources of ZAR132.7M ($13.3M). The profit comprises:
ORION MINERALS ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
8 RESTRUCTURE OF BLACK ECONOMIC EMPOWERMENT OWNERSHIP
In order to comply with the requirements of the South African Broad-Based Socio-Economic Empowerment
Charter for the Mining and Minerals Industry, 2018 and its associated Implementation Guidelines (Mining Charter
2018), the Company began implementing necessary changes to its group structure within South Africa.
In April 2019, Orion entered into an Memorandum of Understanding (MoU) with each of the then existing Black
Economic Empowerment (BEE) participants (being the trustees for the time being of the Mosiapoa Family Trust
(Mosiapoa), Power Matla (Pty) Ltd (Power Matla) and African Exploration and Mining Finance Corporation
(SOC) Ltd (AEMFC)) in its South African subsidiaries (being Prieska Copper Zinc Mine Pty Ltd (formerly Repli
Trading No 27 (Pty) Ltd) (PCZM), Vardocube (Pty) Ltd (Vardocube), Bartotrax (Pty) Ltd (Bartotrax) and Rich
Rewards Trading 437 (Pty) Limited (Rich Rewards)). In terms of those MoU’s (as amended from time to time), the
existing BEE participants agreed to exchange their shares in Orion’s South African subsidiaries for approximately
134M JSE-listed Orion Shares.
At the same time, Orion entered into a Memorandum of Agreement with two BEE entrepreneurs, Black Star
Minerals (Pty) Ltd (Black Star) and Kolobe Nala Investment Company (Pty) Ltd (KNI), in terms of which they
agreed to acquire a 20% interest in PCZM, as well as a 20% interest in Orion’s ownership interest in its
Jacomynspan Project (consisting of Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd).
In July 2019, Orion concluded a Revised Memorandum of Agreement with Black Star, KNI and Safika Resources
(Pty) Ltd (Safika) in terms of which Safika joined Black Star and KNI as part of the BEE consortium outlined above.
Various components of the BEE restructure were implemented during the reporting period in three phases. The
first phase was implemented in September 2019 and the second phase in November 2019.
In September 2019, a major component of the BEE restructure was implemented. In terms of these transactions,
Mosiapoa and Power Matla exchanged their shares in PCZM, Rich Rewards and Bartotrax (as applicable) for
approximately 48.48M and 37.58M JSE listed Orion Shares, respectively, at a deemed issue price of $0.0314 per
Share. Simultaneously, Prieska Resources Pty (Ltd) (Prieska Resources) acquired a 20% effective interest in the
FINANCIAL STATEMENTS
Company’s subsidiary, PCZM, for a purchase consideration of approximately ZAR142.78M (~$14.45M) and the
trustees for the time being of the Orion Siyathemba Community Trust (Prieska Community Trust) and the trustees
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
for the time being of the Orion Siyathemba Employees Trust (Prieska Employees Trust) each acquired an
FOR THE YEAR ENDED 30 JUNE 2020
effective 5% interest in PCZM.
Notes to the Consolidated Financial Statements
While the acquisition by the Prieska Community Trust and the Prieska Employee Trust was for nominal
FOR THE YEAR ENDED 30 JUNE 2020
consideration, in terms of the prevailing Mining Charter 2018 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
8 RESTRUCTURE OF BLACK ECONOMIC EMPOWERMENT OWNERSHIP
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
project cash-flows.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
2
•
• Note 14 - Provisions
• Note 27 - Measurement of share based payments
In order to comply with the requirements of the South African Broad-Based Socio-Economic Empowerment
Prieska Resources is a BEE company whose shares are held by Black Star (17.31%), KNI (37.97%) and Safika
Charter for the Mining and Minerals Industry, 2018 and its associated Implementation Guidelines (Mining Charter
(44.72%). To fund the acquisition of the 20% interest in PCZM, the Company has provided vendor financing to
2018), the Company began implementing necessary changes to its group structure within South Africa.
Prieska Resources comprising two parts:
A provision has been made for the present value of anticipated costs for future rehabilitation of
land explored or mined. The Group’s exploration activities are subject to various laws and
regulations governing the protection of the environment. The Group recognises management's
best estimate for assets site rehabilitations in the period in which they are incurred. Actual costs
incurred in the future periods could differ materially from the estimates.
• A secured loan (repayable 12 months from closing date of securing Prieska Project financing) of
In April 2019, Orion entered into an Memorandum of Understanding (MoU) with each of the then existing Black
ZAR15.29M (~$1.29M) plus interest at the publicly quoted prime overdraft rate from time to time of
Economic Empowerment (BEE) participants (being the trustees for the time being of the Mosiapoa Family Trust
Investec Bank Limited, which arises as a result of PCZM delegating a portion of a loan owing to Agama
(Mosiapoa), Power Matla (Pty) Ltd (Power Matla) and African Exploration and Mining Finance Corporation
Exploration & Mining (Pty) Ltd (subsidiary of Orion) (Agama) to Prieska Resources, in exchange for which
(SOC) Ltd (AEMFC)) in its South African subsidiaries (being Prieska Copper Zinc Mine Pty Ltd (formerly Repli
PCZM issues ordinary shares to Prieska Resources (refer Note 9); and
Trading No 27 (Pty) Ltd) (PCZM), Vardocube (Pty) Ltd (Vardocube), Bartotrax (Pty) Ltd (Bartotrax) and Rich
Rewards Trading 437 (Pty) Limited (Rich Rewards)). In terms of those MoU’s (as amended from time to time), the
Preference shares issued by Prieska Resources to Agama to the value of ZAR200M (~$16.84M), the
existing BEE participants agreed to exchange their shares in Orion’s South African subsidiaries for approximately
respective purchase consideration being 20% shareholding in PCZM (refer Note 10).
134M JSE-listed Orion Shares.
The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
by using Black-Scholes model taking into account the terms and conditions upon which the
instruments were granted. The accounting estimates and assumptions relating to equity-settled
share-based payments would have no impact on the carrying amounts of assets and liabilities
within the next annual reporting period but may impact profit or loss and equity.
For the purposes of enabling Prieska Resources to acquire a 20% shareholding in PCZM, Nabustax and Itakane
At the same time, Orion entered into a Memorandum of Agreement with two BEE entrepreneurs, Black Star
Trading 217 (Pty) Ltd (Itakane) entered into an asset-for-share transaction with Prieska Resources whereby
Notes to the Consolidated Financial Statements
Minerals (Pty) Ltd (Black Star) and Kolobe Nala Investment Company (Pty) Ltd (KNI), in terms of which they
Nabustax and Itakane sold a collective 10.21% shareholding in PCZM, in consideration for which Prieska
FOR THE YEAR ENDED 30 JUNE 2020
agreed to acquire a 20% interest in PCZM, as well as a 20% interest in Orion’s ownership interest in its
Resources issued preference shares (refer above) to the Sellers in proportion to their percentage of ordinary
Jacomynspan Project (consisting of Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd).
shares held in PCZM prior to the transaction. This transaction resulted in a one-off profit for the Orion subsidiaries
8 RESTRUCTURE OF BLACK ECONOMIC EMPOWERMENT OWNERSHIP (continued)
from the sale of their 20% holding in PCZM to Prieska Resources of ZAR132.7M ($13.3M). The profit comprises:
In July 2019, Orion concluded a Revised Memorandum of Agreement with Black Star, KNI and Safika Resources
(Pty) Ltd (Safika) in terms of which Safika joined Black Star and KNI as part of the BEE consortium outlined above.
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding which have been issued for no consideration in relation to the dilutive potential
ordinary shares, which comprise share options granted to employees, contract personnel, shareholders
and corporate entities engaged by the Group, that are expected to be exercised.
Various components of the BEE restructure were implemented during the reporting period in three phases. The
first phase was implemented in September 2019 and the second phase in November 2019.
At consolidation of the financial results of Nabustax and Itakane within the Orion Group, the gain of ZAR132.6M
($13.2M) is recognised directly in equity as a transaction between owners, without a loss of control, in
In September 2019, a major component of the BEE restructure was implemented. In terms of these transactions,
accordance AASB 10.23, Consolidated Financial Statements (refer Note18).
Mosiapoa and Power Matla exchanged their shares in PCZM, Rich Rewards and Bartotrax (as applicable) for
approximately 48.48M and 37.58M JSE listed Orion Shares, respectively, at a deemed issue price of $0.0314 per
In November 2019, Orion issued approximately 47.83M JSE listed Orion Shares at a deemed issue price of $0.0314
Share. Simultaneously, Prieska Resources Pty (Ltd) (Prieska Resources) acquired a 20% effective interest in the
per Share to AEMFC and Mosiapoa (together, Residual BEE Investors). The Shares were issued to the Residual
Company’s subsidiary, PCZM, for a purchase consideration of approximately ZAR142.78M (~$14.45M) and the
BEE Investors as consideration for the repurchase by Vardocube, of shares held by the Residual BEE Investors in
trustees for the time being of the Orion Siyathemba Community Trust (Prieska Community Trust) and the trustees
that company, finalising the BEE restructure. This component of the BEE restructure was effected by way of a
for the time being of the Orion Siyathemba Employees Trust (Prieska Employees Trust) each acquired an
scheme of arrangement in terms of section 114(1)(e) of the South African Companies Act, 2008.
effective 5% interest in PCZM.
(i) Determination and presentation of operating segments
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Group’s other components. All operating segments’ operating results are regularly reviewed by the
Group’s Managing Director and Chief Executive Officer (Chief Operating Decision Maker of the Group) to
make decisions about resources to be allocated to the segment and assess its performance, and for which
discrete financial information is available.
• Nabustax ZAR52.8M ($5.3M) for 4.06% shareholding sold in PCZM; and
Itakane ZAR79.9M ($8.0M) for 6.15% shareholding sold in PCZM.
(v) Segment reporting
(u) Earnings per share
•
•
(w) Share capital
As part of the BEE restructure, several of the loans held by PCZM, Bartotrax, Vardocube and Rich Rewards were
While the acquisition by the Prieska Community Trust and the Prieska Employee Trust was for nominal
delegated to other Orion Group companies, which had no impact on the consolidated Group.
consideration, in terms of the prevailing Mining Charter 2018 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
In January 2020, the Company implemented the next phase of the BEE restructure, whereby:
project cash-flows.
Segment results that are reported to the Managing Director and Chief Executive Officer include items
directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters), head office
expenses, and income tax assets and liabilities. Segment capital expenditure is the total cost incurred
during the period to acquire plant and equipment, and intangible assets other than goodwill.
PCZM acquired the entire issued ordinary share capital of Orion subsidiary, Vardocube from Nabustax
(Orion subsidiary), the purchase consideration for which was the issue of 4,282 PCZM shares to Nabustax,
Prieska Resources is a BEE company whose shares are held by Black Star (17.31%), KNI (37.97%) and Safika
resulting in:
(44.72%). To fund the acquisition of the 20% interest in PCZM, the Company has provided vendor financing to
Prieska Resources comprising two parts:
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares and share options are recognised as a deduction from equity, net of any tax effects. Dividends on
ordinary shares are recognised as a liability in the period in which they are declared.
o Vardocube becoming a wholly-owned subsidiary of PCZM; and
• A secured loan (repayable 12 months from closing date of securing Prieska Project financing) of
o Prieska Resources and Itakane’s (Orion subsidiary) shareholding in PCZM being momentarily
ZAR15.29M (~$1.29M) plus interest at the publicly quoted prime overdraft rate from time to time of
Investec Bank Limited, which arises as a result of PCZM delegating a portion of a loan owing to Agama
• Orion subsidiaries, Nabustax and Itakane (Distributing Companies) each declared a distribution in specie
Exploration & Mining (Pty) Ltd (subsidiary of Orion) (Agama) to Prieska Resources, in exchange for which
constituting a liquidation distribution as contemplated in section 47 of the South African Income Tax Act,
PCZM issues ordinary shares to Prieska Resources (refer Note 9); and
1962 pursuant to which the assets of the Distributing Companies are transferred to Agama (Orion
Preference shares issued by Prieska Resources to Agama to the value of ZAR200M (~$16.84M), the
subsidiary), such that:
respective purchase consideration being 20% shareholding in PCZM (refer Note 10).
A number of the Group’s accounting policies and disclosures require the determination of fair value, for
both financial and non-financial assets and liabilities. Fair values have been determined for measurement
and / or disclosure purposes based on the following methods. When applicable, further information about
the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
(x) Determination of fair values
diluted.
•
o
eventual transferral of any encumbrances and pledges on some of the PCZM shares; and
o Agama, resultantly being the new direct shareholder in PCZM and Bartotrax, and accepts the
For the purposes of enabling Prieska Resources to acquire a 20% shareholding in PCZM, Nabustax and Itakane
Trading 217 (Pty) Ltd (Itakane) entered into an asset-for-share transaction with Prieska Resources whereby
the security provided in relation to the Distributing Companies’ preference shares held in Prieska
Nabustax and Itakane sold a collective 10.21% shareholding in PCZM, in consideration for which Prieska
Resources is re-issued to Agama.
Resources issued preference shares (refer above) to the Sellers in proportion to their percentage of ordinary
shares held in PCZM prior to the transaction. This transaction resulted in a one-off profit for the Orion subsidiaries
To ensure that the BEE consortium’s interest in its vehicle (Prieska Resources) is not diluted upon Prieska
from the sale of their 20% holding in PCZM to Prieska Resources of ZAR132.7M ($13.3M). The profit comprises:
Resources issuing preference shares to the Orion group in exchange for ordinary shares in PCZM, the
shareholders of Prieska Resources received an additional 5,078 ordinary shares in Prieska Resources by
way of a pro rata capitalisation issue to:
•
o Black Star receiving an additional 2,271 shares;
o KNI receiving an additional 1,928 shares; and
o
Safika receiving an additional 879 shares.
89
•
Prieska Resources maintains its minimum 20% shareholding in the issued ordinary share capital of PCZM
by way of:
o a subscription of an additional 613 shares in PCZM; and
o
issuing additional preference shares to Agama to the value of ZAR67.36M (~$6.8M) in
exchange for Agama transferring to Prieska Resources, 475 shares in PCZM held by Agama.
Key terms of the Prieska Resources preference shares issued to Agama are referenced in Note 10.
At consolidation of the financial results of Agama within the Orion Group, the gain of ZAR66.91M ($6.75M) is
recognised directly in equity as a transaction between owners, without a loss of control, in accordance AASB
10.23, Consolidated Financial Statements (refer Note 19).
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
FOR THE YEAR ENDED 30 JUNE 2020
8 RESTRUCTURE OF BLACK ECONOMIC EMPOWERMENT OWNERSHIP
8 RESTRUCTURE OF BLACK ECONOMIC EMPOWERMENT OWNERSHIP
In order to comply with the requirements of the South African Broad-Based Socio-Economic Empowerment
In order to comply with the requirements of the South African Broad-Based Socio-Economic Empowerment
Charter for the Mining and Minerals Industry, 2018 and its associated Implementation Guidelines (Mining Charter
Charter for the Mining and Minerals Industry, 2018 and its associated Implementation Guidelines (Mining Charter
2018), the Company began implementing necessary changes to its group structure within South Africa.
2018), the Company began implementing necessary changes to its group structure within South Africa.
In April 2019, Orion entered into an Memorandum of Understanding (MoU) with each of the then existing Black
In April 2019, Orion entered into an Memorandum of Understanding (MoU) with each of the then existing Black
Economic Empowerment (BEE) participants (being the trustees for the time being of the Mosiapoa Family Trust
Economic Empowerment (BEE) participants (being the trustees for the time being of the Mosiapoa Family Trust
(Mosiapoa), Power Matla (Pty) Ltd (Power Matla) and African Exploration and Mining Finance Corporation
(Mosiapoa), Power Matla (Pty) Ltd (Power Matla) and African Exploration and Mining Finance Corporation
(SOC) Ltd (AEMFC)) in its South African subsidiaries (being Prieska Copper Zinc Mine Pty Ltd (formerly Repli
(SOC) Ltd (AEMFC)) in its South African subsidiaries (being Prieska Copper Zinc Mine Pty Ltd (formerly Repli
Trading No 27 (Pty) Ltd) (PCZM), Vardocube (Pty) Ltd (Vardocube), Bartotrax (Pty) Ltd (Bartotrax) and Rich
Trading No 27 (Pty) Ltd) (PCZM), Vardocube (Pty) Ltd (Vardocube), Bartotrax (Pty) Ltd (Bartotrax) and Rich
Rewards Trading 437 (Pty) Limited (Rich Rewards)). In terms of those MoU’s (as amended from time to time), the
Rewards Trading 437 (Pty) Limited (Rich Rewards)). In terms of those MoU’s (as amended from time to time), the
existing BEE participants agreed to exchange their shares in Orion’s South African subsidiaries for approximately
existing BEE participants agreed to exchange their shares in Orion’s South African subsidiaries for approximately
134M JSE-listed Orion Shares.
134M JSE-listed Orion Shares.
At the same time, Orion entered into a Memorandum of Agreement with two BEE entrepreneurs, Black Star
At the same time, Orion entered into a Memorandum of Agreement with two BEE entrepreneurs, Black Star
Minerals (Pty) Ltd (Black Star) and Kolobe Nala Investment Company (Pty) Ltd (KNI), in terms of which they
Minerals (Pty) Ltd (Black Star) and Kolobe Nala Investment Company (Pty) Ltd (KNI), in terms of which they
agreed to acquire a 20% interest in PCZM, as well as a 20% interest in Orion’s ownership interest in its
agreed to acquire a 20% interest in PCZM, as well as a 20% interest in Orion’s ownership interest in its
Jacomynspan Project (consisting of Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd).
Jacomynspan Project (consisting of Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd).
In July 2019, Orion concluded a Revised Memorandum of Agreement with Black Star, KNI and Safika Resources
In July 2019, Orion concluded a Revised Memorandum of Agreement with Black Star, KNI and Safika Resources
(Pty) Ltd (Safika) in terms of which Safika joined Black Star and KNI as part of the BEE consortium outlined above.
(Pty) Ltd (Safika) in terms of which Safika joined Black Star and KNI as part of the BEE consortium outlined above.
Various components of the BEE restructure were implemented during the reporting period in three phases. The
Various components of the BEE restructure were implemented during the reporting period in three phases. The
first phase was implemented in September 2019 and the second phase in November 2019.
first phase was implemented in September 2019 and the second phase in November 2019.
In September 2019, a major component of the BEE restructure was implemented. In terms of these transactions,
In September 2019, a major component of the BEE restructure was implemented. In terms of these transactions,
Mosiapoa and Power Matla exchanged their shares in PCZM, Rich Rewards and Bartotrax (as applicable) for
Mosiapoa and Power Matla exchanged their shares in PCZM, Rich Rewards and Bartotrax (as applicable) for
approximately 48.48M and 37.58M JSE listed Orion Shares, respectively, at a deemed issue price of $0.0314 per
approximately 48.48M and 37.58M JSE listed Orion Shares, respectively, at a deemed issue price of $0.0314 per
Share. Simultaneously, Prieska Resources Pty (Ltd) (Prieska Resources) acquired a 20% effective interest in the
Share. Simultaneously, Prieska Resources Pty (Ltd) (Prieska Resources) acquired a 20% effective interest in the
Company’s subsidiary, PCZM, for a purchase consideration of approximately ZAR142.78M (~$14.45M) and the
Company’s subsidiary, PCZM, for a purchase consideration of approximately ZAR142.78M (~$14.45M) and the
trustees for the time being of the Orion Siyathemba Community Trust (Prieska Community Trust) and the trustees
trustees for the time being of the Orion Siyathemba Community Trust (Prieska Community Trust) and the trustees
for the time being of the Orion Siyathemba Employees Trust (Prieska Employees Trust) each acquired an
for the time being of the Orion Siyathemba Employees Trust (Prieska Employees Trust) each acquired an
effective 5% interest in PCZM.
effective 5% interest in PCZM.
While the acquisition by the Prieska Community Trust and the Prieska Employee Trust was for nominal
While the acquisition by the Prieska Community Trust and the Prieska Employee Trust was for nominal
consideration, in terms of the prevailing Mining Charter 2018 legislation, Orion and Prieska Resources will be
consideration, in terms of the prevailing Mining Charter 2018 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
entitled to recover the costs incurred on behalf of the two trusts in developing the Prieska Project from future
project cash-flows.
project cash-flows.
Prieska Resources is a BEE company whose shares are held by Black Star (17.31%), KNI (37.97%) and Safika
Prieska Resources is a BEE company whose shares are held by Black Star (17.31%), KNI (37.97%) and Safika
(44.72%). To fund the acquisition of the 20% interest in PCZM, the Company has provided vendor financing to
(44.72%). To fund the acquisition of the 20% interest in PCZM, the Company has provided vendor financing to
Prieska Resources comprising two parts:
Prieska Resources comprising two parts:
• A secured loan (repayable 12 months from closing date of securing Prieska Project financing) of
• A secured loan (repayable 12 months from closing date of securing Prieska Project financing) of
ZAR15.29M (~$1.29M) plus interest at the publicly quoted prime overdraft rate from time to time of
ZAR15.29M (~$1.29M) plus interest at the publicly quoted prime overdraft rate from time to time of
Investec Bank Limited, which arises as a result of PCZM delegating a portion of a loan owing to Agama
Investec Bank Limited, which arises as a result of PCZM delegating a portion of a loan owing to Agama
Exploration & Mining (Pty) Ltd (subsidiary of Orion) (Agama) to Prieska Resources, in exchange for which
Exploration & Mining (Pty) Ltd (subsidiary of Orion) (Agama) to Prieska Resources, in exchange for which
PCZM issues ordinary shares to Prieska Resources (refer Note 9); and
PCZM issues ordinary shares to Prieska Resources (refer Note 9); and
•
•
Preference shares issued by Prieska Resources to Agama to the value of ZAR200M (~$16.84M), the
Preference shares issued by Prieska Resources to Agama to the value of ZAR200M (~$16.84M), the
respective purchase consideration being 20% shareholding in PCZM (refer Note 10).
respective purchase consideration being 20% shareholding in PCZM (refer Note 10).
For the purposes of enabling Prieska Resources to acquire a 20% shareholding in PCZM, Nabustax and Itakane
For the purposes of enabling Prieska Resources to acquire a 20% shareholding in PCZM, Nabustax and Itakane
Trading 217 (Pty) Ltd (Itakane) entered into an asset-for-share transaction with Prieska Resources whereby
Trading 217 (Pty) Ltd (Itakane) entered into an asset-for-share transaction with Prieska Resources whereby
Nabustax and Itakane sold a collective 10.21% shareholding in PCZM, in consideration for which Prieska
Nabustax and Itakane sold a collective 10.21% shareholding in PCZM, in consideration for which Prieska
Resources issued preference shares (refer above) to the Sellers in proportion to their percentage of ordinary
Resources issued preference shares (refer above) to the Sellers in proportion to their percentage of ordinary
shares held in PCZM prior to the transaction. This transaction resulted in a one-off profit for the Orion subsidiaries
shares held in PCZM prior to the transaction. This transaction resulted in a one-off profit for the Orion subsidiaries
from the sale of their 20% holding in PCZM to Prieska Resources of ZAR132.7M ($13.3M). The profit comprises:
from the sale of their 20% holding in PCZM to Prieska Resources of ZAR132.7M ($13.3M). The profit comprises:
ORION MINERALS ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
8 RESTRUCTURE OF BLACK ECONOMIC EMPOWERMENT OWNERSHIP (continued)
• Nabustax ZAR52.8M ($5.3M) for 4.06% shareholding sold in PCZM; and
•
Itakane ZAR79.9M ($8.0M) for 6.15% shareholding sold in PCZM.
At consolidation of the financial results of Nabustax and Itakane within the Orion Group, the gain of ZAR132.6M
($13.2M) is recognised directly in equity as a transaction between owners, without a loss of control, in
accordance AASB 10.23, Consolidated Financial Statements (refer Note18).
In November 2019, Orion issued approximately 47.83M JSE listed Orion Shares at a deemed issue price of $0.0314
per Share to AEMFC and Mosiapoa (together, Residual BEE Investors). The Shares were issued to the Residual
BEE Investors as consideration for the repurchase by Vardocube, of shares held by the Residual BEE Investors in
that company, finalising the BEE restructure. This component of the BEE restructure was effected by way of a
scheme of arrangement in terms of section 114(1)(e) of the South African Companies Act, 2008.
As part of the BEE restructure, several of the loans held by PCZM, Bartotrax, Vardocube and Rich Rewards were
delegated to other Orion Group companies, which had no impact on the consolidated Group.
In January 2020, the Company implemented the next phase of the BEE restructure, whereby:
•
PCZM acquired the entire issued ordinary share capital of Orion subsidiary, Vardocube from Nabustax
(Orion subsidiary), the purchase consideration for which was the issue of 4,282 PCZM shares to Nabustax,
resulting in:
o Vardocube becoming a wholly-owned subsidiary of PCZM; and
o Prieska Resources and Itakane’s (Orion subsidiary) shareholding in PCZM being momentarily
diluted.
• Orion subsidiaries, Nabustax and Itakane (Distributing Companies) each declared a distribution in specie
constituting a liquidation distribution as contemplated in section 47 of the South African Income Tax Act,
1962 pursuant to which the assets of the Distributing Companies are transferred to Agama (Orion
subsidiary), such that:
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
o Agama, resultantly being the new direct shareholder in PCZM and Bartotrax, and accepts the
eventual transferral of any encumbrances and pledges on some of the PCZM shares; and
8 RESTRUCTURE OF BLACK ECONOMIC EMPOWERMENT OWNERSHIP
the security provided in relation to the Distributing Companies’ preference shares held in Prieska
Resources is re-issued to Agama.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
o
2
•
•
• Note 14 - Provisions
• Note 27 - Measurement of share based payments
In order to comply with the requirements of the South African Broad-Based Socio-Economic Empowerment
To ensure that the BEE consortium’s interest in its vehicle (Prieska Resources) is not diluted upon Prieska
Charter for the Mining and Minerals Industry, 2018 and its associated Implementation Guidelines (Mining Charter
Resources issuing preference shares to the Orion group in exchange for ordinary shares in PCZM, the
2018), the Company began implementing necessary changes to its group structure within South Africa.
shareholders of Prieska Resources received an additional 5,078 ordinary shares in Prieska Resources by
way of a pro rata capitalisation issue to:
A provision has been made for the present value of anticipated costs for future rehabilitation of
land explored or mined. The Group’s exploration activities are subject to various laws and
regulations governing the protection of the environment. The Group recognises management's
best estimate for assets site rehabilitations in the period in which they are incurred. Actual costs
incurred in the future periods could differ materially from the estimates.
In April 2019, Orion entered into an Memorandum of Understanding (MoU) with each of the then existing Black
o Black Star receiving an additional 2,271 shares;
Economic Empowerment (BEE) participants (being the trustees for the time being of the Mosiapoa Family Trust
(Mosiapoa), Power Matla (Pty) Ltd (Power Matla) and African Exploration and Mining Finance Corporation
o KNI receiving an additional 1,928 shares; and
(SOC) Ltd (AEMFC)) in its South African subsidiaries (being Prieska Copper Zinc Mine Pty Ltd (formerly Repli
Safika receiving an additional 879 shares.
o
Trading No 27 (Pty) Ltd) (PCZM), Vardocube (Pty) Ltd (Vardocube), Bartotrax (Pty) Ltd (Bartotrax) and Rich
Rewards Trading 437 (Pty) Limited (Rich Rewards)). In terms of those MoU’s (as amended from time to time), the
Prieska Resources maintains its minimum 20% shareholding in the issued ordinary share capital of PCZM
existing BEE participants agreed to exchange their shares in Orion’s South African subsidiaries for approximately
by way of:
134M JSE-listed Orion Shares.
The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
by using Black-Scholes model taking into account the terms and conditions upon which the
instruments were granted. The accounting estimates and assumptions relating to equity-settled
share-based payments would have no impact on the carrying amounts of assets and liabilities
within the next annual reporting period but may impact profit or loss and equity.
o a subscription of an additional 613 shares in PCZM; and
o
At the same time, Orion entered into a Memorandum of Agreement with two BEE entrepreneurs, Black Star
issuing additional preference shares to Agama to the value of ZAR67.36M (~$6.8M) in
Minerals (Pty) Ltd (Black Star) and Kolobe Nala Investment Company (Pty) Ltd (KNI), in terms of which they
exchange for Agama transferring to Prieska Resources, 475 shares in PCZM held by Agama.
agreed to acquire a 20% interest in PCZM, as well as a 20% interest in Orion’s ownership interest in its
Jacomynspan Project (consisting of Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd).
Key terms of the Prieska Resources preference shares issued to Agama are referenced in Note 10.
In July 2019, Orion concluded a Revised Memorandum of Agreement with Black Star, KNI and Safika Resources
At consolidation of the financial results of Agama within the Orion Group, the gain of ZAR66.91M ($6.75M) is
Notes to the Consolidated Financial Statements
(Pty) Ltd (Safika) in terms of which Safika joined Black Star and KNI as part of the BEE consortium outlined above.
recognised directly in equity as a transaction between owners, without a loss of control, in accordance AASB
10.23, Consolidated Financial Statements (refer Note 19).
FOR THE YEAR ENDED 30 JUNE 2020
Various components of the BEE restructure were implemented during the reporting period in three phases. The
first phase was implemented in September 2019 and the second phase in November 2019.
9
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding which have been issued for no consideration in relation to the dilutive potential
ordinary shares, which comprise share options granted to employees, contract personnel, shareholders
and corporate entities engaged by the Group, that are expected to be exercised.
LOANS TO RELATED PARTIES
(u) Earnings per share
Non-current
Other expenses
(v) Segment reporting
In September 2019, a major component of the BEE restructure was implemented. In terms of these transactions,
Mosiapoa and Power Matla exchanged their shares in PCZM, Rich Rewards and Bartotrax (as applicable) for
approximately 48.48M and 37.58M JSE listed Orion Shares, respectively, at a deemed issue price of $0.0314 per
Share. Simultaneously, Prieska Resources Pty (Ltd) (Prieska Resources) acquired a 20% effective interest in the
Company’s subsidiary, PCZM, for a purchase consideration of approximately ZAR142.78M (~$14.45M) and the
trustees for the time being of the Orion Siyathemba Community Trust (Prieska Community Trust) and the trustees
for the time being of the Orion Siyathemba Employees Trust (Prieska Employees Trust) each acquired an
effective 5% interest in PCZM.
2020
(i) Determination and presentation of operating segments
$’000
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Group’s other components. All operating segments’ operating results are regularly reviewed by the
Group’s Managing Director and Chief Executive Officer (Chief Operating Decision Maker of the Group) to
make decisions about resources to be allocated to the segment and assess its performance, and for which
discrete financial information is available.
Loan to Prieska Resources – interest receivable
Loan to Prieska Resources – principal
Loan to joint venture partners
2019
$’000
1,288
2,042
1,964
81
---
---
Total
3,333
2,042
(w) Share capital
Segment results that are reported to the Managing Director and Chief Executive Officer include items
directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters), head office
expenses, and income tax assets and liabilities. Segment capital expenditure is the total cost incurred
during the period to acquire plant and equipment, and intangible assets other than goodwill.
While the acquisition by the Prieska Community Trust and the Prieska Employee Trust was for nominal
consideration, in terms of the prevailing Mining Charter 2018 legislation, Orion and Prieska Resources will be
Prieska Resources
entitled to recover the costs incurred on behalf of the two trusts in developing the Prieska Project from future
The BEE restructure implemented in September 2019 involved the acquisition by Prieska Resources of a 20%
project cash-flows.
interest in the Company’s subsidiary, PCZM, for a purchase consideration of ZAR142.78M (~$14.45M). To fund
the acquisition, the Company has provided vendor financing comprised of two components, being a loan and
Prieska Resources is a BEE company whose shares are held by Black Star (17.31%), KNI (37.97%) and Safika
preference shares.
(44.72%). To fund the acquisition of the 20% interest in PCZM, the Company has provided vendor financing to
Prieska Resources comprising two parts:
In January 2020, additional preference shares to the value of ZAR67.36M (~$6.8M) were issued in exchange for
Agama transferring to Prieska Resources, 475 shares in PCZM held by Agama (refer Notes 8 and 10).
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares and share options are recognised as a deduction from equity, net of any tax effects. Dividends on
ordinary shares are recognised as a liability in the period in which they are declared.
• A secured loan (repayable 12 months from closing date of securing Prieska Project financing) of
ZAR15.29M (~$1.29M) plus interest at the publicly quoted prime overdraft rate from time to time of
Joint Venture Partners
Investec Bank Limited, which arises as a result of PCZM delegating a portion of a loan owing to Agama
In September 2017, the Company entered into a binding earn-in agreement to acquire the earn-in rights over
Exploration & Mining (Pty) Ltd (subsidiary of Orion) (Agama) to Prieska Resources, in exchange for which
the Jacomynspan Nickel-Copper-PGE Project (South Africa) (Jacomynspan Project) from two companies,
PCZM issues ordinary shares to Prieska Resources (refer Note 9); and
Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd (Namaqua Disawell Companies) (refer Note 24), which
hold partly overlapping prospecting rights and mining right applications.
A number of the Group’s accounting policies and disclosures require the determination of fair value, for
both financial and non-financial assets and liabilities. Fair values have been determined for measurement
and / or disclosure purposes based on the following methods. When applicable, further information about
the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
Preference shares issued by Prieska Resources to Agama to the value of ZAR200M (~$16.84M), the
respective purchase consideration being 20% shareholding in PCZM (refer Note 10).
During the reporting period, the Group continued to advance exploration programs on the Jacomynspan
Project, expending an additional $0.24M. This expenditure, under the terms of the agreement, is held in the
For the purposes of enabling Prieska Resources to acquire a 20% shareholding in PCZM, Nabustax and Itakane
shareholder loan account and Area Metals Holdings 3 (Orion subsidiary) (AMH3) reached the next stage earn-
Trading 217 (Pty) Ltd (Itakane) entered into an asset-for-share transaction with Prieska Resources whereby
in right, which will see its shareholding increase by a further 25% interest (making its total interest 50% (Orion
Nabustax and Itakane sold a collective 10.21% shareholding in PCZM, in consideration for which Prieska
37%)). Following notification to Namaqua Disawell Companies of the earn-in right milestone reached, an
Resources issued preference shares (refer above) to the Sellers in proportion to their percentage of ordinary
application for the relevant regulatory approval is being progressed, and following receipt of such regulatory
shares held in PCZM prior to the transaction. This transaction resulted in a one-off profit for the Orion subsidiaries
approval, AMH3 will be issued with the additional shares earned.
from the sale of their 20% holding in PCZM to Prieska Resources of ZAR132.7M ($13.3M). The profit comprises:
(x) Determination of fair values
•
10 INVESTMENT – PREFERENCE SHARES
90
Other expenses
Non-current
receivable
Total
Prieska Resources preference shares – principal
Prieska Resources preference shares – interest
2020
$’000
16,850
1,412
18,262
2019
$’000
---
---
---
Further to the BEE restructure implemented during the financial year, Prieska Resources issued preference shares
to Orion (refer Note 8) with the following terms:
•
•
The preference shares rank in priority to the rights of all other shares of Prieska Resources with respect to
the distribution of Prieska Resource’s assets, in an amount up to the redemption amount in the event of
the liquidation, dissolution or winding up of Prieska Resources, whether voluntary or involuntary, or any
other distribution of Prieska Resources, whether for the purpose of winding up its affairs or otherwise;
The preference shares are redeemable by Prieska Resources at any time after the expiry of a period of 3
years and 1 day after the date of issue of the Preference Shares, and prior to the 8th anniversary of their
date of issue at an internal rate of return of 12%; and
• Any preference shares held by Orion (through its subsidiary Agama) after the 8th anniversary of their date
of issue will be automatically converted pro rata into ordinary shares in Prieska Resources, up to 49% of
the shares in Prieska Resources or, subject to compliance with South African laws, an equivalent number
of shares in PCZM.
ORION MINERALS ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
9
LOANS TO RELATED PARTIES
Other expenses
Non-current
Loan to Prieska Resources – principal
Loan to Prieska Resources – interest receivable
Loan to joint venture partners
Total
2020
$’000
1,288
81
1,964
3,333
2019
$’000
---
---
2,042
2,042
The BEE restructure implemented in September 2019 involved the acquisition by Prieska Resources of a 20%
interest in the Company’s subsidiary, PCZM, for a purchase consideration of ZAR142.78M (~$14.45M). To fund
the acquisition, the Company has provided vendor financing comprised of two components, being a loan and
Prieska Resources
preference shares.
In January 2020, additional preference shares to the value of ZAR67.36M (~$6.8M) were issued in exchange for
Agama transferring to Prieska Resources, 475 shares in PCZM held by Agama (refer Notes 8 and 10).
Joint Venture Partners
In September 2017, the Company entered into a binding earn-in agreement to acquire the earn-in rights over
the Jacomynspan Nickel-Copper-PGE Project (South Africa) (Jacomynspan Project) from two companies,
Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd (Namaqua Disawell Companies) (refer Note 24), which
hold partly overlapping prospecting rights and mining right applications.
During the reporting period, the Group continued to advance exploration programs on the Jacomynspan
FINANCIAL STATEMENTS
Project, expending an additional $0.24M. This expenditure, under the terms of the agreement, is held in the
shareholder loan account and Area Metals Holdings 3 (Orion subsidiary) (AMH3) reached the next stage earn-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
in right, which will see its shareholding increase by a further 25% interest (making its total interest 50% (Orion
FOR THE YEAR ENDED 30 JUNE 2020
37%)). Following notification to Namaqua Disawell Companies of the earn-in right milestone reached, an
application for the relevant regulatory approval is being progressed, and following receipt of such regulatory
approval, AMH3 will be issued with the additional shares earned.
10 INVESTMENT – PREFERENCE SHARES
Other expenses
Non-current
Prieska Resources preference shares – principal
Prieska Resources preference shares – interest
receivable
Total
2020
$’000
16,850
1,412
18,262
2019
$’000
---
---
---
Further to the BEE restructure implemented during the financial year, Prieska Resources issued preference shares
to Orion (refer Note 8) with the following terms:
•
•
The preference shares rank in priority to the rights of all other shares of Prieska Resources with respect to
the distribution of Prieska Resource’s assets, in an amount up to the redemption amount in the event of
the liquidation, dissolution or winding up of Prieska Resources, whether voluntary or involuntary, or any
other distribution of Prieska Resources, whether for the purpose of winding up its affairs or otherwise;
The preference shares are redeemable by Prieska Resources at any time after the expiry of a period of 3
years and 1 day after the date of issue of the Preference Shares, and prior to the 8th anniversary of their
date of issue at an internal rate of return of 12%; and
• Any preference shares held by Orion (through its subsidiary Agama) after the 8th anniversary of their date
of issue will be automatically converted pro rata into ordinary shares in Prieska Resources, up to 49% of
the shares in Prieska Resources or, subject to compliance with South African laws, an equivalent number
of shares in PCZM.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
11 PLANT AND EQUIPMENT
Other expenses
Opening balance – 1 July
Cost
Accumulated depreciation
Opening written down value
Additions
Disposals or write offs
Effect of movement in exchange rate
Depreciation expense for the year
Written down value at 30 June
Closing balance – 30 June
Cost
Accumulated depreciation
Total at 30 June
12 DEFERRED EXPLORATION, EVALUATION AND DEVELOPMENT
Other expenses
Acquired mineral rights
Opening cost
Exploration and evaluation acquired
Exploration, evaluation and development
Deferred exploration and evaluation expenditure
Effect of foreign exchange movement
Opening cost
Expenditure incurred
Exploration expensed
Impairment
Deferred exploration and evaluation expenditure
Net carrying amount at 30 June
13 TRADE AND OTHER PAYABLES
Other expenses
Current
Trade payables
Other payables
2020
$’000
425
(330)
95
3
(1)
(7)
(33)
57
401
(344)
57
2020
$’000
14,161
---
14,161
26,830
7,473
(6,042)
(2,169)
---
26,092
40,253
2020
$’000
826
132
958
2019
$’000
445
(298)
147
4
(11)
2
(47)
95
425
(330)
95
2019
$’000
14,161
---
14,161
14,958
14,909
(3,053)
16
---
26,830
40,991
2019
$’000
1,762
237
1,999
91
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
9
LOANS TO RELATED PARTIES
Other expenses
Non-current
Loan to Prieska Resources – principal
Loan to Prieska Resources – interest receivable
Loan to joint venture partners
Total
2020
$’000
1,288
81
1,964
3,333
2019
$’000
---
---
2,042
2,042
The BEE restructure implemented in September 2019 involved the acquisition by Prieska Resources of a 20%
interest in the Company’s subsidiary, PCZM, for a purchase consideration of ZAR142.78M (~$14.45M). To fund
the acquisition, the Company has provided vendor financing comprised of two components, being a loan and
In January 2020, additional preference shares to the value of ZAR67.36M (~$6.8M) were issued in exchange for
Agama transferring to Prieska Resources, 475 shares in PCZM held by Agama (refer Notes 8 and 10).
Prieska Resources
preference shares.
Joint Venture Partners
In September 2017, the Company entered into a binding earn-in agreement to acquire the earn-in rights over
the Jacomynspan Nickel-Copper-PGE Project (South Africa) (Jacomynspan Project) from two companies,
Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd (Namaqua Disawell Companies) (refer Note 24), which
hold partly overlapping prospecting rights and mining right applications.
During the reporting period, the Group continued to advance exploration programs on the Jacomynspan
Project, expending an additional $0.24M. This expenditure, under the terms of the agreement, is held in the
shareholder loan account and Area Metals Holdings 3 (Orion subsidiary) (AMH3) reached the next stage earn-
in right, which will see its shareholding increase by a further 25% interest (making its total interest 50% (Orion
37%)). Following notification to Namaqua Disawell Companies of the earn-in right milestone reached, an
application for the relevant regulatory approval is being progressed, and following receipt of such regulatory
approval, AMH3 will be issued with the additional shares earned.
10 INVESTMENT – PREFERENCE SHARES
Other expenses
Non-current
receivable
Total
Prieska Resources preference shares – principal
Prieska Resources preference shares – interest
2020
$’000
16,850
1,412
18,262
2019
$’000
---
---
---
Further to the BEE restructure implemented during the financial year, Prieska Resources issued preference shares
to Orion (refer Note 8) with the following terms:
•
•
The preference shares rank in priority to the rights of all other shares of Prieska Resources with respect to
the distribution of Prieska Resource’s assets, in an amount up to the redemption amount in the event of
the liquidation, dissolution or winding up of Prieska Resources, whether voluntary or involuntary, or any
other distribution of Prieska Resources, whether for the purpose of winding up its affairs or otherwise;
The preference shares are redeemable by Prieska Resources at any time after the expiry of a period of 3
years and 1 day after the date of issue of the Preference Shares, and prior to the 8th anniversary of their
date of issue at an internal rate of return of 12%; and
• Any preference shares held by Orion (through its subsidiary Agama) after the 8th anniversary of their date
of issue will be automatically converted pro rata into ordinary shares in Prieska Resources, up to 49% of
the shares in Prieska Resources or, subject to compliance with South African laws, an equivalent number
of shares in PCZM.
ORION MINERALS ANNUAL REPORT 2020
2020
$’000
425
(330)
95
3
(1)
(7)
(33)
57
401
(344)
57
2020
$’000
14,161
---
14,161
26,830
7,473
(6,042)
(2,169)
---
26,092
40,253
2020
$’000
826
132
958
2019
$’000
445
(298)
147
4
(11)
2
(47)
95
425
(330)
95
2019
$’000
14,161
---
14,161
14,958
14,909
16
(3,053)
---
26,830
40,991
2019
$’000
1,762
237
1,999
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
11 PLANT AND EQUIPMENT
Other expenses
Opening balance – 1 July
Cost
Accumulated depreciation
Opening written down value
Additions
Disposals or write offs
Effect of movement in exchange rate
Depreciation expense for the year
Closing balance – 30 June
Written down value at 30 June
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Accumulated depreciation
Cost
Total at 30 June
12 DEFERRED EXPLORATION, EVALUATION AND DEVELOPMENT
Other expenses
Acquired mineral rights
Opening cost
Exploration and evaluation acquired
Exploration, evaluation and development
Deferred exploration and evaluation expenditure
Opening cost
Expenditure incurred
Effect of foreign exchange movement
Exploration expensed
Impairment
Deferred exploration and evaluation expenditure
Net carrying amount at 30 June
13 TRADE AND OTHER PAYABLES
Other expenses
Current
Trade payables
Other payables
92
ORION MINERALS ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
11 PLANT AND EQUIPMENT
12 DEFERRED EXPLORATION, EVALUATION AND DEVELOPMENT
Other expenses
Opening balance – 1 July
Cost
Accumulated depreciation
Opening written down value
Additions
Disposals or write offs
Effect of movement in exchange rate
Depreciation expense for the year
Written down value at 30 June
Closing balance – 30 June
Cost
Accumulated depreciation
Total at 30 June
Other expenses
Acquired mineral rights
Opening cost
Exploration and evaluation acquired
Exploration, evaluation and development
Deferred exploration and evaluation expenditure
Effect of foreign exchange movement
Opening cost
Expenditure incurred
Exploration expensed
Impairment
Deferred exploration and evaluation expenditure
Net carrying amount at 30 June
13 TRADE AND OTHER PAYABLES
Other expenses
Current
Trade payables
Other payables
2020
$’000
425
(330)
95
3
(1)
(7)
(33)
57
401
(344)
57
2020
$’000
14,161
---
14,161
26,830
7,473
(6,042)
(2,169)
---
26,092
40,253
2020
$’000
826
132
958
2019
$’000
445
(298)
147
(11)
4
2
(47)
95
425
(330)
95
2019
$’000
14,161
---
14,161
14,958
14,909
(3,053)
16
---
26,830
40,991
2019
$’000
1,762
237
1,999
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
14 PROVISIONS
Other expenses
Current
Employee benefits – annual leave
Non-current
Rehabilitation (a)
Employee benefits – long service leave
Total
2020
$’000
145
145
1,672
12
1,684
1,829
2019
$’000
170
170
2,353
10
2,363
2,533
(a) In South Africa, long term environmental obligations are based on the Group’s environmental plans, in
compliance with current environmental and regulatory requirements. Full provision is made based on
the net present value of the estimated cost of restoring the environmental disturbance that has
occurred up to the reporting date. The estimated cost of rehabilitation is reviewed annually and
adjusted as appropriate for changes in legislation. The rehabilitation provision for the Group’s South
African project is offset by guarantees held by Centriq Insurance Company Limited ($2.1M) (refer Note
6).
In Australia, the state government regulations in Victoria require rehabilitation of drill sites including any
other sites where the Group has caused surface and ground disturbance. The estimated cost of
rehabilitation is reviewed annually and adjusted as appropriate for changes in legislation. The
rehabilitation provision for the Group’s Victorian project is partially offset by a guarantee held on
deposit (refer Note 6).
15 LOANS WITH OTHER ENTITIES AND RELATED PARTIES
Other expenses
Current
AASMF loan (a)
Loan Facility (b)
Convertible Loan (c)
Non-current
AASMF loan (a)
Total
(a) AASMF Loan
2020
$’000
1,600
2,015
4,579
8,194
---
---
8,194
2019
$’000
---
---
3,947
3,947
1,748
1,748
5,695
On 2 November 2015, PCZM (a 70% owned subsidiary of Agama) and AASMF entered into a loan
agreement for the further exploration and development of the Prieska Project. Under the terms of the loan,
AASMF advanced ZAR14.25M to PCZM on 1 August 2017. The key terms of the agreement are as follows:
• Loan amount: ZAR14.25M;
•
Interest rate: Prime lending rate in South Africa;
93
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
15 LOANS WITH OTHER ENTITIES AND RELATED PARTIES (continued)
• Repayment date: 30 April 2021 (previously 31 July 2020); and
• Security: 29.17% of the shares held in PCZM by Agama have been pledged as security to AASMF for
the performance of PCZM's obligations in terms of the loan.
(b) Loan Facility
On 14 May 2020, Orion and Tembo Capital entered into a $1.0M unsecured loan facility (Loan Facility) and
on 29 June 2020, Orion and Tembo Capital agreed on an increase in the Loan Amount to $2.0M.
Under the terms of the Loan Facility, the Loan Amount, interest and any amount capitalised under the Loan
Facility (Outstanding Balance) will be automatically set off against the amount to be paid by Tembo Capital
for the issue and allotment of Shares to Tembo Capital under any capital raising undertaken by Orion on or
before 31 October 2020 (Subscription Amount) (subject to shareholder and FIRB approvals).
If Orion does not undertake a capital raising by 31 October 2020, Tembo may elect to receive Shares in
repayment of the Outstanding Balance, at an issue price of the 10 trading day ASX volume weighted
average price (VWAP) of the Shares, prior to the date that Tembo issues a conversion notice to Orion
(subject to shareholder and FIRB approvals).
The key terms of the Loan Facility are:
•
•
•
Loan Amount: $2.0M;
Interest: capitalised at 12% per annum;
Set-off under capital raising: the Outstanding Balance will be automatically set off against the
amount to be paid by Tembo Capital for the issue and allotment of Shares to Tembo Capital under
any capital raising undertaken by Orion on or before 31 October 2020 (Subscription Amount);
• Conversion: if Orion does not undertake a capital raising by 31 October 2020 (Repayment Date),
Tembo may elect to receive Shares in repayment of the Outstanding Balance at an issue price of
the VWAP of Shares on the ASX over the ten trading days prior to the date that Tembo issues a
conversion notice to Orion (subject to shareholder and regulatory approvals);
•
Repayment: if Orion does not undertake a capital raising by the Repayment Date and Tembo
does not elect to receive Shares in repayment of the Outstanding Balance by the Repayment
Date, or if all regulatory and shareholder approvals required to permit Tembo to participate in any
capital raising or to be issued Shares in repayment of the Outstanding Balance have not been
obtained by the later of the Repayment Date and specified dates to obtain the required
shareholder and regulatory approvals, the Outstanding Balance is to be repaid within 10 business
days; and
•
Security: Unsecured;
On 7 August 2020, following reporting period end, the Company announced a $6.2M capital raising. In
addition, Tembo Capital subscribed for $2.1M of Shares in the Company at an issue price of $0.017 per
share. Under the terms of the Laon Facility, part of the subscription amount will be offset against balance
outstanding (subject to receipt of approvals from Shareholders and FIRB). If approved, the Loan Facility
will be repaid in full on or about 30 September 2020.
(c) Convertible Loan
On 25 January 2019, the Company announced a $3.6M loan facility with Tembo Capital (Convertible
Loan). The key terms of the Loan Facility are:
• Convertible Loan Amount: Up to $3.6M;
•
Interest: Capitalised at 12% per annum accrued daily on the amount drawn down;
94
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
15 LOANS WITH OTHER ENTITIES AND RELATED PARTIES (continued)
•
Repayment: Tembo Capital may elect for repayment of the balance of the Convertible Loan
(including capitalized interest and fees (Outstanding Amount) to be satisfied by the issue of Shares
by the Company to Tembo Capital at a deemed issue price of $0.026 per Share (subject to receipt
of shareholder and FIRB approvals). The Outstanding Amount must be repaid by 31 October 2020,
or if Tembo Capital elects to receive Shares in repayment of the Outstanding Amount in lieu of
payment in cash, the date on which the Shares are to be issued to Tembo Capital (or such later
date as may be agreed between Tembo Capital and Orion);
•
Establishment fee:
o Cash - capitalised 5% of the Convertible Loan Amount and capitalised 4% of the
Outstanding Amount as of 24 January 2020, payable on the Repayment date; and
o Options - 11M unlisted Orion options, exercisable at a price of $0.03 per option, expiring
on the 17 June 2024.
•
Security: Unsecured.
16 PREFERENCE SHARES
Other expenses
AASMF preference shares – principal
AASMF preference shares – provision for dividends and
settlement premium
Total
2020
$’000
---
---
---
2019
$’000
1,593
936
2,529
Preference shares are classified as financial liabilities and therefore the accrued dividends and settlement
premium are recorded as an interest expense in the consolidated statement of profit or loss and other
comprehensive income
PCZM, applied for a funding facility from the AASMF for the further exploration and development of the
Prieska Project. On 14 November 2014, AASMF approved the funding facility for an amount of ZAR30.0M,
subject to certain terms and conditions. The funding is provided in two tranches, the first tranche for
ZAR15.75M by way of the issue of PCZM preference shares and the second tranche for ZAR14.25M by way
of a loan from AASMF (refer Note 13).
On 4 March 2019, the Company announced it had reached agreement with AASMF to redeem the
preference shares for Shares. Under the agreement, AASMF agreed to the redemption of the preference
shares, in exchange for Orion Shares, the ASX and JSE listed parent company of PCZM (Share Exchange
Agreement).
Under the terms of the Share Exchange Agreement and following the receipt of Orion shareholder
approval, in satisfaction of the redemption amount payable by PCZM to AASMF of ZAR25.05M (~$2.5M), in
connection with the voluntary redemption of the preference shares by PCZM, on 5 July 2019, the Company
issued 77.57M Shares to AASMF at a deemed issue price of $0.0323 per Share.
95
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
17 CONVERTIBLE NOTES
Other expenses
Convertible note liability
Opening balance
Convertible note liability – movement
Convertible notes – converted
Closing balance
2020
$’000
5,724
(174)
(5,550)
---
2019
$’000
6,001
(7)
(270)
5,724
On 7 February 2017, the Company announced that it was proposing to conduct a capital raising through
the issue of convertible notes to various sophisticated and professional investors, each with a face value
of $0.026 (Convertible Notes).
The Company obtained shareholder approval for the Convertible Notes issue at a meeting of shareholders
held on 13 March 2017. Following obtaining approval, on 17 March 2017 the Company issued 232,692,294
Convertible Notes each with a face value of $0.026 and 2 year maturity (extended by 6 months in 2019),
raising $6.05M.
On 23 April 2019, the Company issued 10.38M Shares to a noteholder to satisfy the Company’s obligation
to issue Shares following the conversion of Convertible Notes. On 24 September 2019, the Company issued
a further 222.3M Shares to noteholders following conversion of Convertible Notes by Noteholders.
18
ISSUED CAPITAL AND SHARE BASED PAYMENTS RESERVE
Other expenses
Ordinary fully paid shares (Shares)
2020
$’000
146,648
146,648
2019
$’000
121,530
121,530
The following movements in issued capital occurred during the reporting period:
Ordinary fully paid shares
Opening balance at 1 July 2019
Share Issues:
Placement - AASMF (5 July 2019)
Placement - Placement (22 July 2019)
Placement - Placement (9 August 2019)
Placement - Placement (6 September 2019)
Placement – BEE restructure (12 September 2019)
Convertible notes conversion (24 September 2019)
Placement - Placement (1 November 2019)
Placement - Placement (5 November 2019)
Placement - Placement (22 November 2019)
Placement – BEE restructure (29 November 2019)
Share Purchase Plan (12 December 2019)
Less: Issue costs
Number of Shares
Issue price
$’000
2,003,344,917
121,530
77,567,412
$0.032
30,000,000
$0.040
33,706,695
$0.040
20,000,000
$0.040
86,056,022
$0.031
222,307,679
$0.026
235,399,983
$0.025
19,400,000
$0.025
53,904,167
$0.025
47,825,602
$0.031
70,047,920
$0.025
---
---
2,505
1,200
1,348
800
2,702
5,780
5,885
485
1,348
1,502
1,752
(189)
Closing balance at 30 June 2020
2,899,560,397
146,648
96
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
18 ISSUED CAPITAL AND SHARE BASED PAYMENT RESERVE (continued)
The following movements in issued capital occurred during the prior period:
Ordinary fully paid shares
Opening balance at 1 July 2018
Share Issues:
Placement (18 August 2018)
Placement (23 August 2018)
Placement (23 August 2018)
Placement (23 April 2019)
Placement (23 April 2019)
Placement (23 April 2019)
Placement (30 April 2019)
Less: Issue costs
Number of Shares
Issue price
$’000
1,481,603,768
102,460
212,454,055
$0.037
172,918,918
$0.037
6,756,756
$0.037
50,625,000
$0.040
10,384,615
$0.026
2,000,000
$0.020
66,601,805
$0.040
---
---
7,861
6,398
250
2,025
270
40
2,664
(438)
Closing balance at 30 June 2019
2,003,344,917
121,530
Share based payments reserve - movement
The employee share option and share plan reserve is used to record the value of equity benefits provided
to employees and directors as part of their remuneration. The following movements in the share based
payments reserve occurred during the period:
Other expenses
Opening balance at 1 July 2018
Share based payments expense
Unlisted share options expired and transferred to accumulated losses (i)
Closing balance at 30 June 2019
Share based payments expense
Unlisted share options expired and transferred to accumulated losses (i)
Closing balance at 30 June 2020
$’000
2,103
1,649
(1,065)
2,687
1,312
(615)
3,384
(i) During the year, previously recognised share based payment transactions for options which had vested
but subsequently expired were transferred to accumulated losses.
The following options to subscribe for ordinary fully paid shares expired during the year:
Class
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Total
Number of options
Expiry date
Exercise price
3,040,540
15/10/2019
100,466,749
31/10/2019
250,000
30/11/2019
250,000
30/11/2019
1,900,000
30/06/2020
2,200,000
30/06/2020
108,107,289
$0.037
$0.05
$0.045
$0.06
$0.035
$0.05
97
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
19 OTHER RESERVE
Other expenses
Opening balance
Movement
Transactions between owners
Closing balance
2020
$’000
---
19,956
19,956
2019
$’000
---
---
---
In accordance with AASB 10.23, the gain realised by Nabustax and Itakane on the sale of 20% of the shares in
PCZM to Prieska Resources, is recognised directly in equity as transactions between owners without a loss of
control (refer Note 8 for additional information).
20
INCOME TAX
Other expenses
Income tax expense
(Loss) before tax
2020
$’000
2019
$’000
(18,638)
(10,750)
Income tax using the corporation rate of 27.5% (2019: 27.5%)
(5,125)
(2,956)
Movements in income tax expense due to:
Non deductible expenses
Non assessable income
Employee share based payments expensed
Non creditable or refundable taxes paid
(Under) / over provided in prior years
Tax effect of tax losses not recognised
---
---
361
13
(4,751)
---
4,764
---
---
453
---
(2,503)
---
2,503
Income tax expense/(benefit)
13
---
No income tax is payable by the Group. The directors have considered it prudent not to bring to account
the future income tax benefit of income tax losses and exploration deductions until it is probable that future
taxable profits will be available against which the unused tax losses can be utilised.
The Group has estimated un-recouped gross Australian income tax losses of approximately $20.90M (2019:
$19.95M) which may be available to offset against taxable income in future years, subject to continuing
to meet relevant statutory tests.
The Group also has carry forward tax losses in South Africa of approximately ZAR4.24M (~$0.36M) (2019:
~$0.4M) and unredeemed capital expenditure carried forward, which can be offset against future mining
income, of ZAR454.24M (~$37.12M) (2019: ~$37.12M).
Completed in the prior financial year, the Group reviewed the Australian entities estimated un-recouped
gross Australian income tax losses. Results of this review identified approximately $17.0M which may be
available to the Group to offset against future taxable income. Such benefits have not been recognised
and will only be obtained if:
•
•
•
the Group derives future assessable income of a nature and an amount sufficient to enable the
benefit from the deductions for the loss to be realised;
the Group continues to comply with the conditions for deductibility imposed by tax legislation; and
no changes in taxation legislation adversely affect the economic entity in realising the benefit from
the deductions for the losses.
98
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
20
INCOME TAX (continued)
Tax consolidation
For the purposes of Australian income taxation, the Company and its 100% controlled Australian subsidiaries
have formed a tax consolidation group. The parent entity, Orion Minerals Ltd, reports to the Australian
Taxation Office on behalf of all the Australian entities.
21 LOSS PER SHARE
Basic loss per share amounts are calculated by dividing the net loss for the year attributable to ordinary
equity holders of the parent by the weighted average number of ordinary shares outstanding during the
year.
Diluted earnings per share amounts are calculated by dividing the net loss attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding during the year (adjusted
for the effects of potentially dilutive options and dilutive partly paid contributing shares).
The following reflects the income and share data used to calculate basic and diluted earnings per share:
a) Basic and diluted loss per share
Other expenses
Loss attributable to owners of the Company
Diluted loss attributable to owners of the Company
b) Reconciliation of loss used in calculating earnings per share
Other expenses
Loss from continuing operations attributable to equity holders of the Group
Loss attributable non-controlling interest
Loss attributable to owners of the Company
c) Weighted average number of shares
Other expenses
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share.
Weighted average number of ordinary shares and potential ordinary shares
used as the denominator in calculating diluted earnings per share.
d) Headline loss per share
Other expenses
Loss before income tax
Impairment of non-current assets reversal
Plant and equipment written off
Adjusted earnings
Weighted average number of shares
Earnings / (loss) per share (cents per share)
Diluted earnings / (loss) per share (cents per share)
2020
Cents
(0.66)
(0.66)
2020
$’000
2019
Cents
(0.53)
(0.53)
2019
$’000
(18,651)
1,096
(17,555)
(10,750)
989
(9,761)
2020
Number
2019
Number
2,667,885,443
1,844,523,096
2,667,885,443
1,844,523,096
2020
$’000
2019
$’000
(17,555)
(9,761)
---
---
---
---
(17,555)
(9,761)
2,667,885,443
1,844,523,096
(0.66)
(0.66)
(0.53)
(0.53)
99
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
22 FINANCIAL INSTRUMENTS
Financial Risk Management
Overview
The Group has exposure to the following risks from its use of financial instruments:
• Market risk.
• Credit risk.
•
Liquidity risk.
This note presents information about the Group’s exposure to each of the above risks, its objectives, policies
and processes for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework.
Risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The Group’s Audit Committee oversees how management monitors compliance with the Group’s risk
management policies and procedures and reviews the adequacy of the risk management framework in
relation to the risks faced by the Group.
The Group's principal financial instruments are cash, short-term deposits, receivables, loans and payables.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Group’s income and expenses or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return.
Equity price risk
The Group is currently not subject to equity price risk movement.
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument
will fluctuate due to changes in market interest rates. Interest rate risk arises from fluctuations in interest
bearing financial assets and liabilities that the Group uses. Interest bearing assets comprise cash and cash
equivalents which are considered to be short-term liquid assets and investment decisions are governed by
the monetary policy.
During the year, the Group had one variable rate interest bearing liability.
It is the Group's policy to settle trade payables within the credit terms allowed and therefore not incur
interest on overdue balances.
The Group is not materially exposed to changes in market interest rates. A 1% variation in interest rates would
result in interest revenue changing by up to $2,000 (2019: $2,000) based on year-end cash balances, and
$nil (2019: $nil) based on year-end security bonds and deposits balances, assuming all other variables
remain unchanged.
The Group does not account for any fixed rate financial assets and liabilities at fair value through the
Statement of Profit or Loss.
100
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
22 FINANCIAL INSTRUMENTS (continued)
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the Group’s receivables from customers and
investment securities.
The Group does not presently have customers and consequently does not have credit exposure to
outstanding receivables. Other receivables represent GST refundable from the Australian Taxation Office,
VAT refundable from South African Revenue Service and security bonds and deposits. Trade and other
receivables are neither past due nor impaired.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation. Refer to Note 2(a)(iii) for a summary of
the Group’s current plans for managing its liquidity risk.
The Group’s objective is to maintain a balance between continuity of funding and flexibility. The Group’s
exposure to financial obligations relating to corporate administration and projects expenditure, are subject
to budgeting and reporting controls, to ensure that such obligations do not exceed cash held and known
cash inflows for a period of at least 1 year.
Fair value of financial assets and liabilities
The fair value of cash and cash equivalents and non-interest bearing financial assets and financial liabilities
of the Group is equal to their carrying value.
The carrying amounts of trade and other receivables and trade and other payables are assumed to
approximate their fair values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the
current market interest rate that is available for similar financial liabilities.
Foreign currency risk
The Group is exposed to fluctuations in foreign currencies arising from expenditure in currencies other than
the Group’s measurement currency. The Group has foreign operations with functional currencies in South
African Rand (ZAR). The Group has not formalised a foreign currency risk management policy, however it
monitors its foreign currency expenditure in light of exchange rate movements.
The Group has significant exposure to foreign currency risk, particularly between AUD/ZAR, at the end of
the reporting period. Foreign exposure risk arises from future commercial transactions and recognised
financial assets and financial liabilities which are denominated in a currency other than the Group’s
functional currency.
30 June 2020
30 June 2019
Consolidated
Financial Assets
Trade and other receivables
Loan to joint venture partners
ZAR
$’000
159
3,333
Investment in Prieska Resources
18,262
Financial Liabilities
Trade and other payables
AASMF loan
578
1,600
EUR
$’000
GBP
$’000
---
---
---
44
---
---
---
---
---
---
ZAR
$’000
391
2,042
---
1,544
1,748
EUR
$’000
GBP
$’000
---
---
---
23
---
---
---
---
21
---
101
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
22 FINANCIAL INSTRUMENTS (continued)
The Group’s exposure to foreign exchange is predominately ZAR. Should the Australian dollar weaken by
10% / strengthen by 10% against the ZAR (2019: 10% weaken / 10% strengthen), with all other variables held
constant, the Groups profit before tax for the year would have been $0.09M lower / $0.09M higher (2019:
$0.09M lower / $0.09M higher). The change is the expected overall volatility of the ZAR:AUD, based on
management’s assessment of the possible fluctuations, with consideration given to the last 6 months of the
reporting period and spot rate at reporting date.
Commodity price risk
The Group’s exposure to price risk is minimal at this stage of the operations. Commodity price risk is the risk
that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to
changes in market rates. The risk arises from fluctuations in financial assets and liabilities that the Group
uses.
Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders. The management
of the Group’s capital is performed by the Board.
The Board manages the Group’s liquidity ratio to ensure that it meets its financial obligations as they fall
due and specifically allowing for the expenditure commitments for its mining tenements to ensure that the
Group’s main assets are not at risk.
Refer to Note 2(a)(iii) for a summary of the Group’s current plan for managing its going concern.
None of the Group’s entities are subject to externally imposed capital requirements.
The following table sets out the carrying amount, by maturity, of the financial instruments that are exposed
to interest rate risk:
Floating
interest
rate
$’000
Fixed
interest rate
maturing in
1 year or
less $’000
Fixed
interest rate
maturing in
2 to 5 years
$’000
Fixed
interest rate
maturing in
5 years
$’000
Non-
interest
bearing
$’000
Weighted
average
interest rate
0.88%
1,222
---
7.25%
12.00%
5.98%
11.07%
10.25%
0.00%
---
---
---
1,222
---
---
---
1,369
---
2,442
3,811
8,194
17
---
---
8,211
---
---
---
---
---
---
---
---
---
---
---
18,262
---
18,262
---
---
---
---
---
---
---
173
173
---
---
958
958
Total
$’000
1,222
1,369
18,262
2,614
23,467
8,194
17
958
9,169
30 June 2020
Financial Assets
Cash on hand and at
bank
Loan to Prieska
Resources
Investment in
preference shares
Other receivables
Total
Financial Liabilities
Loans
Lease liability
Trade and other
payables
Total
102
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
FOR THE YEAR ENDED 30 JUNE 2020
FOR THE YEAR ENDED 30 JUNE 2020
22 FINANCIAL INSTRUMENTS (continued)
22 FINANCIAL INSTRUMENTS (continued)
22 FINANCIAL INSTRUMENTS (continued)
Weighted
Weighted
Weighted
average
average
average
interest rate
interest rate
interest rate
Floating
Floating
Floating
interest rate
interest rate
interest rate
$’000
$’000
$’000
Fixed interest
Fixed interest
Fixed interest
rate maturing
rate maturing
rate maturing
in 1 year or less
in 1 year or less
in 1 year or less
$’000
$’000
$’000
Fixed interest
Fixed interest
Fixed interest
rate maturing
rate maturing
rate maturing
in 2 to 5 years
in 2 to 5 years
in 2 to 5 years
$’000
$’000
$’000
Non-
Non-
Non-
interest
interest
interest
bearing
bearing
bearing
$’000
$’000
$’000
Total
Total
Total
$’000
$’000
$’000
30 June 2019
30 June 2019
30 June 2019
Financial Assets
Financial Assets
Financial Assets
Cash on hand and at
Cash on hand and at
Cash on hand and at
bank
bank
bank
0.10%
0.10%
0.10%
1,395
1,395
1,395
Other receivables
Other receivables
Other receivables
1.90%
1.90%
1.90%
Total
Total
Total
Financial Liabilities
Financial Liabilities
Financial Liabilities
Convertible note liability
Convertible note liability
Convertible note liability
Loans
Loans
Loans
Preference shares
Preference shares
Preference shares
Trade and other payables
Trade and other payables
Trade and other payables
Total
Total
Total
12.00%
12.00%
12.00%
12.00%
12.00%
12.00%
13.50%
13.50%
13.50%
2.00%
2.00%
2.00%
---
---
---
1,395
1,395
1,395
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
23 COMMITMENTS AND CONTINGENCIES
23 COMMITMENTS AND CONTINGENCIES
23 COMMITMENTS AND CONTINGENCIES
---
---
---
197
197
197
197
197
197
5,724
5,724
5,724
3,947
3,947
3,947
---
---
---
---
---
---
9,671
9,671
9,671
---
---
---
---
---
---
---
---
---
---
---
---
1,748
1,748
1,748
2,529
2,529
2,529
---
---
---
4,277
4,277
4,277
---
---
---
1,395
1,395
1,395
362
362
362
362
362
362
---
---
---
---
---
---
---
---
---
1,999
1,999
1,999
1,999
1,999
1,999
559
559
559
1,954
1,954
1,954
5,724
5,724
5,724
5,695
5,695
5,695
2,529
2,529
2,529
1,999
1,999
1,999
15,947
15,947
15,947
Tenement commitments – South Africa and Australia
Tenement commitments – South Africa and Australia
Tenement commitments – South Africa and Australia
The Group has a portfolio of tenements located in South Africa and Victoria, Australia, which all have a
The Group has a portfolio of tenements located in South Africa and Victoria, Australia, which all have a
The Group has a portfolio of tenements located in South Africa and Victoria, Australia, which all have a
requirement for a certain level of expenditure each and every year in addition to annual rental payments
requirement for a certain level of expenditure each and every year in addition to annual rental payments
requirement for a certain level of expenditure each and every year in addition to annual rental payments
for the tenements.
for the tenements.
for the tenements.
Guarantees
Guarantees
Guarantees
The Company has the following contingent liabilities at 30 June 2020:
The Company has the following contingent liabilities at 30 June 2020:
The Company has the following contingent liabilities at 30 June 2020:
•
(cid:31)
•
•
(cid:31)
•
The Group also has negotiated bank guarantees in favour of the Victorian Government for
The Group also has negotiated bank guarantees in favour of the Victorian Government for
The Group also has negotiated bank guarantees in favour of the Victorian Government for
rehabilitation obligations of mining and exploration tenements. The total of these guarantees at
rehabilitation obligations of mining and exploration tenements. The total of these guarantees at
rehabilitation obligations of mining and exploration tenements. The total of these guarantees at
30 June 2020 was $0.25M (2019: $0.25M). The Group has sufficient term deposits to cover the
30 June 2020 was $0.25M (2019: $0.25M). The Group has sufficient term deposits to cover the
30 June 2020 was $0.25M (2019: $0.25M). The Group has sufficient term deposits to cover the
outstanding guarantees.
outstanding guarantees.
outstanding guarantees.
It has guaranteed to cover the directors and officers in the event of legal claim against the
It has guaranteed to cover the directors and officers in the event of legal claim against the
It has guaranteed to cover the directors and officers in the event of legal claim against the
individual or as a group for conduct which is within the Company guidelines, operations and
individual or as a group for conduct which is within the Company guidelines, operations and
individual or as a group for conduct which is within the Company guidelines, operations and
procedures.
procedures.
procedures.
As part of the Group’s environmental policy exploration and access sites are regenerated to match or
As part of the Group’s environmental policy exploration and access sites are regenerated to match or
As part of the Group’s environmental policy exploration and access sites are regenerated to match or
exceed local government and state government expectations. The costs are not considered to be
exceed local government and state government expectations. The costs are not considered to be
exceed local government and state government expectations. The costs are not considered to be
material by the Group however this policy will be reviewed as exploration and development activities
material by the Group however this policy will be reviewed as exploration and development activities
material by the Group however this policy will be reviewed as exploration and development activities
increase as the Company moves closer towards commercial production.
increase as the Company moves closer towards commercial production.
increase as the Company moves closer towards commercial production.
Guarantees
Guarantees
Guarantees
The Company has the following bonds at 30 June 2020:
The Company has the following bonds at 30 June 2020:
The Company has the following bonds at 30 June 2020:
•
(cid:31)
•
The Group has negotiated guarantees in favour of rental agreements. The total of these
The Group has negotiated guarantees in favour of rental agreements. The total of these
The Group has negotiated guarantees in favour of rental agreements. The total of these
guarantees at 30 June 2020 was $3,117 (2019: $3,117).
guarantees at 30 June 2020 was $3,117 (2019: $3,117).
guarantees at 30 June 2020 was $3,117 (2019: $3,117).
103
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
FOR THE YEAR ENDED 30 JUNE 2020
24 CONTROLLED ENTITIES
24 CONTROLLED ENTITIES
The consolidated financial statements include the financial statements of the Company and the
The consolidated financial statements include the financial statements of the Company and the
subsidiary’s listed in the following table.
subsidiary’s listed in the following table.
Entity
Entity
Parent Entity
Parent Entity
Orion Minerals Ltd
Orion Minerals Ltd
Subsidiaries
Subsidiaries
Goldstar Resources (WA) Pty Ltd
Goldstar Resources (WA) Pty Ltd
Kamax Resources Limited
Kamax Resources Limited
Areachap Holdings No 1 Pty Ltd
Areachap Holdings No 1 Pty Ltd
Areachap Holdings No 2 Pty Ltd
Areachap Holdings No 2 Pty Ltd
Areachap Holdings No 3 Pty Ltd
Areachap Holdings No 3 Pty Ltd
RSA Services Ltd
RSA Services Ltd
Orion Group Services International Ltd
Orion Group Services International Ltd
Areachap Investments 1 S.a r.l
Areachap Investments 1 S.a r.l
Areachap Investments 2 S.a r.l
Areachap Investments 2 S.a r.l
Areachap Investments 3 S.a r.l
Areachap Investments 3 S.a r.l
Areachap Investments 6 S.a r.l
Areachap Investments 6 S.a r.l
Agama Exploration & Mining (Pty) Ltd
Agama Exploration & Mining (Pty) Ltd
Area Metals Holdings No 1 (Pty) Ltd
Area Metals Holdings No 1 (Pty) Ltd
Area Metals Holdings No 2 (Pty) Ltd
Area Metals Holdings No 2 (Pty) Ltd
Area Metals Holdings No 3 (Pty) Ltd
Area Metals Holdings No 3 (Pty) Ltd
Area Metals Holdings No 4 (Pty) Ltd
Area Metals Holdings No 4 (Pty) Ltd
Area Metals Holdings No 5 (Pty) Ltd
Area Metals Holdings No 5 (Pty) Ltd
Area Metals Holdings No 6 (Pty) Ltd
Area Metals Holdings No 6 (Pty) Ltd
Orion Exploration No 1 (Pty) Ltd
Orion Exploration No 1 (Pty) Ltd
Orion Exploration No 3 (Pty) Ltd
Orion Exploration No 3 (Pty) Ltd
Orion Exploration No 4 (Pty) Ltd
Orion Exploration No 4 (Pty) Ltd
Orion Exploration No 5 (Pty) Ltd
Orion Exploration No 5 (Pty) Ltd
Orion Services South Africa (Pty) Ltd
Orion Services South Africa (Pty) Ltd
Nabustax (Pty) Ltd
Nabustax (Pty) Ltd
Itakane Trading 217 (Pty) Ltd
Itakane Trading 217 (Pty) Ltd
Prieska Copper Zinc Mine (Pty) Ltd
Prieska Copper Zinc Mine (Pty) Ltd
Rich Rewards Trading 437 (Pty) Ltd
Rich Rewards Trading 437 (Pty) Ltd
Vardocube (Pty) Ltd
Vardocube (Pty) Ltd
Bartotrax (Pty) Ltd
Bartotrax (Pty) Ltd
Prieska Copper Mines Ltd
Prieska Copper Mines Ltd
Prieska Copper Mines Nature Conservation Trust
Prieska Copper Mines Nature Conservation Trust
Masiqhame Trading 855 (Pty) Ltd
Masiqhame Trading 855 (Pty) Ltd
Associates
Associates
Namaqua Nickel Mining (Pty) Ltd
Namaqua Nickel Mining (Pty) Ltd
Disawell (Pty) Ltd
Disawell (Pty) Ltd
County of
County of
incorporation
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Seychelles
Seychelles
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
Parent Ownership
Parent Ownership
Interest
Interest
2020
2020
%
%
2019
2019
%
%
Non-controlling
Non-controlling
Interest
Interest
2020
2020
%
%
2019
2019
%
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
---
---
---
---
70.00
70.00
100.00
100.00
70.00
70.00
100.00
100.00
68.22
68.22
68.22
68.22
50.00
50.00
25.00
25.00
25.09
25.09
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
---
---
100
100
---
---
100
100
100
100
100
100
100
100
100
100
73.33
73.33
73.33
73.33
70.00
70.00
73.33
73.33
97.46
97.46
97.46
97.46
50.00
50.00
25.00
25.00
25.09
25.09
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
30.00
30.00
---
---
30.00
30.00
---
---
31.78
31.78
31.78
31.78
---
---
N/A
N/A
N/A
N/A
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
26.67
26.67
26.67
26.67
30.00
30.00
26.67
26.67
2.54
2.54
2.54
2.54
---
---
N/A
N/A
N/A
N/A
Associates Note:
Associates Note:
Associates listed above are not controlled by the Group and have no material impact on the Consolidated Financial
Associates listed above are not controlled by the Group and have no material impact on the Consolidated Financial
Statements as at 30 June 2020 (refer Note 9).
Statements as at 30 June 2020 (refer Note 9).
104
ORION MINERALS ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
FOR THE YEAR ENDED 30 JUNE 2020
24 CONTROLLED ENTITIES
24 CONTROLLED ENTITIES
The consolidated financial statements include the financial statements of the Company and the
The consolidated financial statements include the financial statements of the Company and the
subsidiary’s listed in the following table.
subsidiary’s listed in the following table.
Parent Ownership
Parent Ownership
Interest
Interest
County of
County of
incorporation
incorporation
2020
2020
%
%
2019
2019
%
%
Non-controlling
Non-controlling
Interest
Interest
2020
2020
%
%
2019
2019
%
%
Entity
Entity
Parent Entity
Parent Entity
Orion Minerals Ltd
Orion Minerals Ltd
Subsidiaries
Subsidiaries
Goldstar Resources (WA) Pty Ltd
Goldstar Resources (WA) Pty Ltd
Kamax Resources Limited
Kamax Resources Limited
Areachap Holdings No 1 Pty Ltd
Areachap Holdings No 1 Pty Ltd
Areachap Holdings No 2 Pty Ltd
Areachap Holdings No 2 Pty Ltd
Areachap Holdings No 3 Pty Ltd
Areachap Holdings No 3 Pty Ltd
RSA Services Ltd
RSA Services Ltd
Orion Group Services International Ltd
Orion Group Services International Ltd
Areachap Investments 1 S.a r.l
Areachap Investments 1 S.a r.l
Areachap Investments 2 S.a r.l
Areachap Investments 2 S.a r.l
Areachap Investments 3 S.a r.l
Areachap Investments 3 S.a r.l
Areachap Investments 6 S.a r.l
Areachap Investments 6 S.a r.l
Agama Exploration & Mining (Pty) Ltd
Agama Exploration & Mining (Pty) Ltd
Area Metals Holdings No 1 (Pty) Ltd
Area Metals Holdings No 1 (Pty) Ltd
Area Metals Holdings No 2 (Pty) Ltd
Area Metals Holdings No 2 (Pty) Ltd
Area Metals Holdings No 3 (Pty) Ltd
Area Metals Holdings No 3 (Pty) Ltd
Area Metals Holdings No 4 (Pty) Ltd
Area Metals Holdings No 4 (Pty) Ltd
Area Metals Holdings No 5 (Pty) Ltd
Area Metals Holdings No 5 (Pty) Ltd
Area Metals Holdings No 6 (Pty) Ltd
Area Metals Holdings No 6 (Pty) Ltd
Orion Exploration No 1 (Pty) Ltd
Orion Exploration No 1 (Pty) Ltd
Orion Exploration No 3 (Pty) Ltd
Orion Exploration No 3 (Pty) Ltd
Orion Exploration No 4 (Pty) Ltd
Orion Exploration No 4 (Pty) Ltd
Orion Exploration No 5 (Pty) Ltd
Orion Exploration No 5 (Pty) Ltd
Orion Services South Africa (Pty) Ltd
Orion Services South Africa (Pty) Ltd
Nabustax (Pty) Ltd
Nabustax (Pty) Ltd
Itakane Trading 217 (Pty) Ltd
Itakane Trading 217 (Pty) Ltd
Prieska Copper Zinc Mine (Pty) Ltd
Prieska Copper Zinc Mine (Pty) Ltd
Rich Rewards Trading 437 (Pty) Ltd
Rich Rewards Trading 437 (Pty) Ltd
Vardocube (Pty) Ltd
Vardocube (Pty) Ltd
Bartotrax (Pty) Ltd
Bartotrax (Pty) Ltd
Prieska Copper Mines Ltd
Prieska Copper Mines Ltd
Prieska Copper Mines Nature Conservation Trust
Prieska Copper Mines Nature Conservation Trust
Masiqhame Trading 855 (Pty) Ltd
Masiqhame Trading 855 (Pty) Ltd
Associates
Associates
Namaqua Nickel Mining (Pty) Ltd
Namaqua Nickel Mining (Pty) Ltd
Disawell (Pty) Ltd
Disawell (Pty) Ltd
Associates Note:
Associates Note:
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Seychelles
Seychelles
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
---
---
---
---
70.00
70.00
100.00
100.00
70.00
70.00
100.00
100.00
68.22
68.22
68.22
68.22
50.00
50.00
25.00
25.00
25.09
25.09
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
---
---
100
100
---
---
100
100
100
100
100
100
100
100
100
100
73.33
73.33
73.33
73.33
70.00
70.00
73.33
73.33
97.46
97.46
97.46
97.46
50.00
50.00
25.00
25.00
25.09
25.09
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
30.00
30.00
30.00
30.00
31.78
31.78
31.78
31.78
---
---
N/A
N/A
N/A
N/A
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
26.67
26.67
26.67
26.67
30.00
30.00
26.67
26.67
2.54
2.54
2.54
2.54
---
---
N/A
N/A
N/A
N/A
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
25 NON-CONTROLLING INTEREST
Other expenses
Opening balance – 1 July
Movement
BEE restructure adjustment
Accumulated losses
Closing balance – 30 June
2020
$’000
1,244
(2,700)
(1,096)
(2,552)
2019
$’000
2,233
---
(989)
1,244
The non-controlling interest parties have the following interest in the Group South African subsidiaries:
Prieska Copper Zinc Mine (Pty) Ltd 30% (2019: 26.67%), Rich Rewards Trading 437 (Pty) Ltd 0% (2019: 26.67%),
Vardocube (Pty) Ltd 30% (2019: 30%), Bartotrax (Pty) Ltd 0% (2019: 26.67%), Prieska Copper Mines Ltd 31.78%
(2019: 2.54%) and Prieska Copper Mines Nature Conservation Trust 31.78% (2019: 2.54%).
26 RELATED PARTIES DISCLOSURE
Key management personnel compensation
The key management personnel compensation included in administration expenses and exploration and
evaluation expenses (refer Note 3) and deferred exploration, evaluation and development (refer Note 12)
is as follows:
Other expenses
Short-term employee benefits
Post-employment benefits
Share based payments
Total
2020
$
1,774,284
5,967
834,465
2,612,716
2019
$
1,824,618
14,798
693,790
2,533,205
Individual directors and executives compensation disclosures
Information regarding individual directors and executives’ compensation and some equity instruments
disclosures as required by Corporations Regulations 2M.3.03 are provided in the remuneration report
section of the directors’ report.
Key management personnel and director transactions
A number of key management personnel, or their related parties, hold positions in other entities that result
in them having control, joint control or a relevant interest over the financial or operating policies of those
entities.
A number of these entities transacted with the Group during the year. The terms and conditions of the
transactions with key management personnel and their related parties were no more favourable than
those available, or which might reasonably be expected to be available, on similar transactions to non-
key management personnel related entities on an arm’s length basis.
From time to time, Directors of the Group, or their related entities, may provide services to the Group. These
services are provided on terms that might be reasonably expected for other parties and are trivial or
domestic in nature. The following transactions occurred with related parties:
Associates listed above are not controlled by the Group and have no material impact on the Consolidated Financial
Associates listed above are not controlled by the Group and have no material impact on the Consolidated Financial
Statements as at 30 June 2020 (refer Note 9).
Statements as at 30 June 2020 (refer Note 9).
105
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
26 RELATED PARTIES DISCLOSURE (continued)
Other expenses
Payments for services to Tarney Holdings Pty Ltd
Total
2020
$
211,800
211,800
2019
$
179,700
179,700
Tarney Holdings Pty Ltd is an entity associated with the Company’s Chairman, Mr Denis Waddell. Mr
Waddell provides consulting services to the Group through Tarney Holdings by way of agreement between
both parties.
27 AUDITOR REMUNERATION
Other expenses
Amounts received or due and receivable by BDO Audit Pty Ltd for:
An audit or review of the financial report of the Company and any other
entity in the Group
Total amount for BDO Audit Pty Ltd
Amounts received or due and receivable by BDO South Africa for:
An audit or review of the financial report of the Company and any other
entity in the Group
Professional services – corporate finance
Total amount for BDO South Africa
2020
$
32,500
32,500
55,593
3,834
59,427
2019
$
28,500
28,500
98,650
14,660
113,310
Total amount for auditors
91,927
141,810
28 SEGMENT REPORTING
The Group’s operating segments are identified and information disclosed, where appropriate, on the basis
of internal reports reviewed by the Company’s Board of Directors, being the Group’s Chief Operating
Decision Maker, as defined by AASB 8. Reportable segments disclosed are based on aggregating
operating segments where the segments have similar characteristics.
The Group’s core activity is mineral exploration within South Africa and Australia. During the 2020 financial
year, the Group has actively undertaken exploration in South Africa, with segment recording from 29 March
2017.
Reportable segments are represented as follows:
30 June 2020
Australia
South Africa
$’000
$’000
Total
$’000
Segment net operating loss after tax
(6,089)
(12,546)
(18,651)
Depreciation
Finance income
Finance expense
Exploration expenditure written off and expensed
(9)
23
(1,114)
(369)
(167)
1,870
(179)
(1,799)
(176)
1,893
(1,293)
(2,168)
Segment non-current assets
11,309
53,057
64,366
106
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
28 SEGMENT REPORTING (continued)
30 June 2019
Australia
South Africa
$’000
$’000
Total
$’000
Segment net operating loss after tax
(7,098)
(3,472)
(10,750)
Depreciation
Finance income
Finance Expense
Exploration expenditure written off and expensed
(22)
45
(1,304)
(613)
(25)
183
(457)
(2,440)
(47)
228
(1,761)
(3,053)
Segment non-current assets
11,182
34,470
45,652
29 PARENT ENTITY DISCLOSURES
As at, and throughout, the financial year ending 30 June 2020 the parent company of the Group was Orion
Minerals Ltd.
Other expenses
Result of parent entity
Loss for the period
Other comprehensive income
Total comprehensive loss for the period
Financial position of parent entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Total net assets
Total equity of the parent entity comprising of:
Issued capital
Accumulated losses
Other reserves
Total equity
2020
$’000
(5,290)
---
(5,290)
6,011
61,172
67,183
(7,054)
(2,316)
(9,370)
2019
$’000
(4,604)
584
(4,020)
1,405
51,127
52,532
(10,186)
(2,226)
(12,412)
57,813
40,120
146,648
(92,219)
3,384
57,813
121,530
(84,327)
2,917
40,120
Parent entity contingencies
The directors are of the opinion that provisions are not required in respect of these matters, as it is not
probable that a future sacrifice of economic benefits will be required or the amount is not capable of
reliable measurement.
107
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
FOR THE YEAR ENDED 30 JUNE 2020
29 PARENT ENTITY DISCLOSURES (continued)
29 PARENT ENTITY DISCLOSURES (continued)
Contingent liabilities
Contingent liabilities
The Company has issued bank guarantees in respect of its rental agreements and mining tenements. Under
the terms of the financial guarantee contracts, the Company will make payments to reimburse the
guarantors upon failure of the Company to make payments when due. Refer to Note 20 for further detail.
The Company has issued bank guarantees in respect of its rental agreements and mining tenements. Under
the terms of the financial guarantee contracts, the Company will make payments to reimburse the
guarantors upon failure of the Company to make payments when due. Refer to Note 20 for further detail.
30 SHARE BASED PAYMENTS
30 SHARE BASED PAYMENTS
The Group has an Option and Performance Rights Plan (OPRP) for the granting of options or performance
The Group has an Option and Performance Rights Plan (OPRP) for the granting of options or performance
rights to employees. There were 31.5M options granted to employees and consultants during the financial
rights to employees. There were 31.5M options granted to employees and consultants during the financial
year (2019: 52.8M options) under the Company’s OPRP for a total transactional value of $2.79M.
year (2019: 52.8M options) under the Company’s OPRP for a total transactional value of $2.79M.
Outlined below is a summary of option movements during the financial year ended 30 June 2020 to
employees under the OPRP:
Outlined below is a summary of option movements during the financial year ended 30 June 2020 to
employees under the OPRP:
30 June 2020
30 June 2020
Grant date
Grant date
Expiry date
Expiry date
Exercise
Exercise
price
price
Balance at
start of the
year
Balance at
start of the
year
Granted
Granted
during the
during the
year
year
Exercised
Exercised
during
during
the year
the year
Expired
Expired
during the
during the
year
year
Forfeited
Forfeited
during the
during the
year
year
Balance at
Balance at
end of the
end of the
year
year
Consolidated as at 30 June 2020
Consolidated as at 30 June 2020
26-Mar-20
26-Mar-20
31-Mar-25
31-Mar-25
$0.028
$0.028
---
---
10,500,000
10,500,000
26-Mar-20
26-Mar-20
31-Mar-25
31-Mar-25
$0.035
$0.035
---
---
10,500,000
10,500,000
26-Mar-20
26-Mar-20
31-Mar-25
31-Mar-25
$0.04
$0.04
---
---
10,500,000
10,500,000
29-Apr-19
29-Apr-19
30-Apr-24
30-Apr-24
$0.04
$0.04
12,500,000
12,500,000
29-Apr-19
29-Apr-19
30-Apr-24
30-Apr-24
$0.05
$0.05
12,500,000
12,500,000
29-Apr-19
29-Apr-19
30-Apr-24
30-Apr-24
$0.06
$0.06
12,500,000
12,500,000
21-Sep-18
21-Sep-18
31-Mar-23
31-Mar-23
$0.05
$0.05
5,100,000
5,100,000
21-Sep-18
21-Sep-18
31-Mar-23
31-Mar-23
$0.06
$0.06
5,100,000
5,100,000
21-Sep-18
21-Sep-18
31-Mar-23
31-Mar-23
$0.07
$0.07
5,100,000
5,100,000
31-May-17
31-May-17
31-May-22
31-May-22
$0.03
$0.03
12,100,000
12,100,000
31-May-17
31-May-17
31-May-22
31-May-22
$0.045
$0.045
12,100,000
12,100,000
31-May-17
31-May-17
31-May-22
31-May-22
$0.06
$0.06
12,100,000
12,100,000
12-Dec-14
12-Dec-14
30-Nov-19
30-Nov-19
$0.045
$0.045
250,000
250,000
12-Dec-14
12-Dec-14
30-Nov-19
30-Nov-19
$0.06
$0.06
250,000
250,000
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
Total
Total
89,600,000
89,600,000
31,500,000
31,500,000
Weighted average exercise price
Weighted average exercise price
0.049
0.049
0.034
0.034
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
10,500,000
10,500,000
---
---
10,500,000
10,500,000
---
---
10,500,000
10,500,000
---
---
12,500,000
12,500,000
---
---
12,500,000
12,500,000
---
---
12,500,000
12,500,000
---
---
(200,000)
(200,000)
4,900,000
4,900,000
---
---
(200,000)
(200,000)
4,900,000
4,900,000
---
---
(200,000)
(200,000)
4,900,000
4,900,000
---
---
---
---
---
---
---
---
12,100,000
12,100,000
---
---
12,100,000
12,100,000
---
---
12,100,000
12,100,000
---
---
(250,000)
(250,000)
---
---
(250,000)
(250,000)
---
---
---
---
---
---
(1,100,000)
(1,100,000)
120,000,000
120,000,000
---
---
0.057
0.057
0.046
0.046
108
ORION MINERALS ANNUAL REPORT 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
The Company has issued bank guarantees in respect of its rental agreements and mining tenements. Under
the terms of the financial guarantee contracts, the Company will make payments to reimburse the
guarantors upon failure of the Company to make payments when due. Refer to Note 20 for further detail.
The Group has an Option and Performance Rights Plan (OPRP) for the granting of options or performance
rights to employees. There were 31.5M options granted to employees and consultants during the financial
year (2019: 52.8M options) under the Company’s OPRP for a total transactional value of $2.79M.
Outlined below is a summary of option movements during the financial year ended 30 June 2020 to
Contingent liabilities
30 SHARE BASED PAYMENTS
employees under the OPRP:
30 June 2020
Exercise
Balance at
Granted
Exercised
Expired
Forfeited
Balance at
year
year
the year
year
year
year
Consolidated as at 30 June 2020
26-Mar-20
31-Mar-25
$0.028
26-Mar-20
31-Mar-25
$0.035
26-Mar-20
31-Mar-25
$0.04
---
---
---
10,500,000
10,500,000
10,500,000
29-Apr-19
30-Apr-24
$0.04
12,500,000
29-Apr-19
30-Apr-24
$0.05
12,500,000
29-Apr-19
30-Apr-24
$0.06
12,500,000
21-Sep-18
31-Mar-23
$0.05
5,100,000
21-Sep-18
31-Mar-23
$0.06
5,100,000
21-Sep-18
31-Mar-23
$0.07
5,100,000
31-May-17
31-May-22
$0.03
12,100,000
31-May-17
31-May-22
$0.045
12,100,000
31-May-17
31-May-22
$0.06
12,100,000
12-Dec-14
30-Nov-19
$0.045
250,000
12-Dec-14
30-Nov-19
$0.06
250,000
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
10,500,000
10,500,000
10,500,000
12,500,000
12,500,000
12,500,000
(200,000)
4,900,000
(200,000)
4,900,000
(200,000)
4,900,000
---
---
---
12,100,000
12,100,000
12,100,000
(250,000)
(250,000)
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
Total
89,600,000
31,500,000
---
(1,100,000)
120,000,000
Weighted average exercise price
0.049
0.034
---
0.057
0.046
29 PARENT ENTITY DISCLOSURES (continued)
30 SHARE BASED PAYMENTS (continued)
30 SHARE BASED PAYMENTS (continued)
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
FOR THE YEAR ENDED 30 JUNE 2020
Outlined below is a summary of option movements during the financial year ended 30 June 2019 to
employees under the OPRP:
Outlined below is a summary of option movements during the financial year ended 30 June 2019 to
employees under the OPRP:
30 June 2019
30 June 2019
Grant date
Grant date
Expiry date
Expiry date
Exercise
Exercise
price
price
Balance at
Balance at
start of the
start of the
year
year
Granted
Granted
during the
during the
year
year
Exercised
Exercised
during
during
the year
the year
Expired
Expired
during the
during the
year
year
Forfeited
Forfeited
during the
during the
year
year
Balance at
Balance at
end of the
end of the
year
year
Grant date
Expiry date
price
start of the
during the
during
during the
during the
end of the
21-Sep-18
21-Sep-18
31-Mar-23
31-Mar-23
$0.07
$0.07
---
---
5,100,000
5,100,000
Consolidated as at 30 June 2019
Consolidated as at 30 June 2019
29-Apr-19
29-Apr-19
30-Apr-24
30-Apr-24
$0.04
$0.04
---
---
12,500,000
12,500,000
29-Apr-19
29-Apr-19
30-Apr-24
30-Apr-24
$0.05
$0.05
---
---
12,500,000
12,500,000
29-Apr-19
29-Apr-19
30-Apr-24
30-Apr-24
$0.06
$0.06
---
---
12,500,000
12,500,000
21-Sep-18
21-Sep-18
31-Mar-23
31-Mar-23
$0.05
$0.05
---
---
5,100,000
5,100,000
21-Sep-18
21-Sep-18
31-Mar-23
31-Mar-23
$0.06
$0.06
---
---
5,100,000
5,100,000
31-May-17
31-May-17
31-May-22
31-May-22
$0.03
$0.03
12,300,000
12,300,000
31-May-17
31-May-17
31-May-22
31-May-22
$0.045
$0.045
12,300,000
12,300,000
31-May-17
31-May-17
31-May-22
31-May-22
$0.06
$0.06
12,300,000
12,300,000
12-Dec-14
12-Dec-14
30-Nov-19
30-Nov-19
$0.045
$0.045
250,000
250,000
12-Dec-14
12-Dec-14
30-Nov-19
30-Nov-19
$0.06
$0.06
250,000
250,000
---
---
---
---
---
---
---
---
---
---
Total
Total
37,400,000
37,400,000
52,800,000
52,800,000
Weighted average exercise price
Weighted average exercise price
0.044
0.044
0.053
0.053
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
12,500,000
12,500,000
---
---
12,500,000
12,500,000
---
---
12,500,000
12,500,000
---
---
5,100,000
5,100,000
---
---
5,100,000
5,100,000
---
---
5,100,000
5,100,000
---
---
(200,000)
(200,000)
12,100,000
12,100,000
---
---
(200,000)
(200,000)
12,100,000
12,100,000
---
---
(200,000)
(200,000)
12,100,000
12,100,000
---
---
---
---
---
---
250,000
250,000
---
---
250,000
250,000
---
---
(600,000)
(600,000)
89,600,000
89,600,000
---
---
0.045
0.045
0.050
0.050
Set out below are the unlisted options exercisable at the end of the financial year:
Set out below are the unlisted options exercisable at the end of the financial year:
Grant date
Grant date
Expiry date
Expiry date
2020
2020
2019
2019
2018
2018
26 Mar 2020
26 Mar 2020
31 Mar 2025 10,500,000
31 Mar 2025 10,500,000
---
---
---
---
14 June 2019
14 June 2019
30 April 2024 18,000,000 18,000,000
30 April 2024 18,000,000 18,000,000
---
---
29 April 2019
29 April 2019
30 April 2024 12,500,000 12,500,000
30 April 2024 12,500,000 12,500,000
---
---
21 Sep 2018
21 Sep 2018
31 May 2023
31 May 2023
4,900,000
4,900,000
5,100,000
5,100,000
---
---
31 May 2017
31 May 2017
31 May 2022 12,100,000 12,300,000 12,300,000
31 May 2022 12,100,000 12,300,000 12,300,000
26 Nov 2015
26 Nov 2015
30 Nov 2020
30 Nov 2020
---
---
---
---
18,333,333
18,333,333
Total
Total
58,000,000 47,900,000 30,633,333
58,000,000 47,900,000 30,633,333
109
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continue d
FOR THE YEAR ENDED 30 JUNE 2020
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
30 SHARE BASED PAYMENTS (continued)
The fair values of the options are estimated at the date of grant using the Black Scholes option pricing
model. The following table outlines the assumptions made in determining the fair value of the options
granted during the year:
Grant date
Expiry date
Share price at
grant date
Exercise
price
Expected
volatility
Risk-free
interest rate
Fair value at
grant date
26 March 2020
31 March 2025
$0.013
$0.028
74.24%
29 April 2019
30 April 2024
29 April 2019
30 April 2024
29 April 2019
30 April 2024
21 Sep 2018
31 May 2023
21 Sep 2018
31 May 2023
21 Sep 2018
31 May 2023
$0.034
$0.034
$0.034
$0.034
$0.034
$0.034
$0.04
$0.05
$0.06
$0.05
$0.06
$0.07
93.72%
93.72%
93.72%
94.27%
94.27%
94.27%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
$0.001
$0.024
$0.023
$0.022
$0.022
$0.021
$0.020
The weighted average contractual life for the share options outstanding as at 30 June 2020 is between 1
and 4 years (2019: 1 and 4 years).
Total expenses arising from share-based payment transactions recognised during the year as part of
employee benefit expense was $1.31M (2019: $1.65M). Options which expired during the financial year
were written back to accumulated losses, $697,035.
31 SUBSEQUENT EVENTS AFTER THE BALANCE DATE
There has not arisen in the interval between the end of the financial year and the date of this report any
item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the
Company, to affect the operations of the Group, the results of those operations or the state of affairs of
the Group in subsequent financial years except for those matters referred to below:
• On 13 July 2020, the Company announced that it has entered into an agreement whereby Orion (or its
nominated subsidiary) will acquire the remaining minority interests in the Jacomynspan Nickel-Copper-
PGE Project (South Africa) held by two companies, Namaqua Nickel Mining (Pty) Ltd and Disawell (Pty)
Ltd.
• On 29 July 2020, the Company announced that it had reached agreement with Anglo American sefa
Mining Fund (AASMF) to extend the term of the loan facility entered into between the Company and
AASMF whereby AASMF loaned ZAR14.25M to Orion, from 31 July 2020 to 30 April 2021.
• On 7 August 2020 the Company announced a strongly supported $6.2M capital raising. The raising,
comprising the issue of 365M Shares at an issue price of $0.017 per ordinary share (Share), to be
conducted via a placement to sophisticated and professional investors to occur in two stages, being:
o
o
Tranche 1 – In August 2020, the Company issued 346M Shares, using the Company’s 15%
placement capacity under ASX Listing Rule 7.1 to raise $5.9M; and
Tranche 2 – This will comprise the issue of 19M Shares to Tembo Capital Mining Fund II LP and its
affiliated entities (Tembo Capital), to raise $0.3M (subject to shareholder approval, to be sought
at a general meeting of Orion shareholders on 29 September 2020 and Foreign Investment
Review Board (FIRB) approval.
In addition to the capital raising referred to above, Tembo Capital confirmed its continued support of
Orion through subscribing for $2.1M of Shares, at a deemed issue price of $0.017 per Share (subject to
shareholder approval and FIRB approval).
110
ORION MINERALS ANNUAL REPORT 2020
FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
Directors’ Declaration
1
2
3
4
In the opinion of the directors of Orion Minerals Ltd (the Company) the consolidated financial statements
and notes that are set out on pages 71 to 110 and the Remuneration report set out on pages 59 to 68,
identified within in the Directors’ report, are in accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
performance for the financial year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
The directors draw attention to Note 2(a)(iii) to the consolidated financial statements which the directors
have considered in forming their view that there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they become due and payable.
The directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the chief executive officer and chief financial officer for the financial year ended 30 June 2020.
The directors draw attention to Note 2 to the consolidated financial statements, which includes a
statement of compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Waddell
Denis
Chairman
Perth, Western
Australia
22
September
2020
111
ORION MINERALS ANNUAL REPORT 2020
Tel: +61 3 9603 1700
Fax: +61 3 9602 3870
www.bdo.com.au
Collins Square, Tower Four
Level 18, 727 Collins Street
Melbourne VIC 3008
GPO Box 5099 Melbourne VIC 3001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Orion Minerals Ltd
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Orion Minerals Ltd (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Material uncertainty related to going concern
We draw attention to Note 2(a)(iii) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
EXPLORATION AND EVALUATION COSTS
Key audit matter
How the matter was addressed in our audit
The Group has incurred significant exploration and
Our audit procedures included, amongst others:
evaluation expenditures which have been capitalised.
As the carrying value of exploration and evaluation
expenditures represents a significant asset of the
Group, we considered it necessary to assess whether
facts and circumstances existed to suggest that the
carrying amount of this asset may exceed its
recoverable amount.
Obtaining evidence that the Group has valid
rights to explore in the areas represented by
the capitalised exploration and evaluation
expenditures by obtaining independent
searches;
Confirming whether the rights to tenure of the
areas of interest remained current at reporting
AASB 6 Exploration for and Evaluation of Mineral
date as well as confirming that rights to tenure
Resources contains detailed requirements with respect
are expected to be renewed for tenements that
to both the initial recognition of such assets and
will expire in the near future;
ongoing requirements to continue to carry forward the
Agreeing a sample of the additions to
assets.
Note 2(r) and note 12 to the financial statements
contains the accounting policy and disclosures in
relation to exploration and evaluation expenditures.
capitalised exploration expenditure during the
year to supporting documentation, and ensuring
that the amounts were permissible and
capitalised correctly;
Reviewing the directors’ assessment of the
carrying value of the exploration and evaluation
expenditure, ensuring that management have
considered the effect of potential impairment
indicators, commodity prices and the stage of
the Group’s project;
Reviewing public (ASX) announcements and
reviewing minutes of directors’ meetings to
ensure that the Group had not decided to
discontinue activities in any of its areas of
interest.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2020, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 59 to 68 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Orion Minerals Ltd, for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
James Mooney
Director
22 September 2020
FINANCIAL STATEMENTS
ADDITIONAL ASX INFORMATION
Shareholder information for the year ended 30 June 2020
The following additional information not shown elsewhere in this report is required by ASX Limited in respect of listed companies only. This
information is current as at 31 August 2020.
Distribution of ordinary shares and option holders
Fully paid ordinary shares
Options
No. of holders
No. of options
1 - 1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
No. of holders
993
554
226
960
650
3,383
No. of shares
271,632
1,405,363
1,738,679
41,613,924
%
0.01
0.04
0.06
1.28
3,200,679,314 98.61
100
3,245,708,912
Holders of non-marketable parcels
Shareholders holding less than a marketable parcel on the ASX register was 268.
Twenty largest holders of ordinary shares
The names of the 20 largest holders of ordinary fully paid shares are:
1
2
3
4
5
6
7
8
9
Ndovu Capital X BV
Wyllie Group Pty Ltd
Delphi Unternehmensberatung Aktiengesellschaft
J P Morgan Nominees Australia Pty Limited
IGO Limited
Sparta AG
Tarney Holdings Pty Ltd
HSBC Custody Nominees (Australia) Limited
Anglo American sefa Mining
10
Silja Investment Limited
11 Deutsche Balaton Aktiengesellschaft
12 Mosiapoa Capital (Pty) Ltd
13 Ubhejane Resources Investment Pty Ltd
14 Belair Australia Pty Ltd
15
16
Power Matla Mining Pty Limited
African Exploration Mining & Fina Soc Ltd
17 Dr Leon Eugene Pretorius
18
Precision Opportunities Fund Ltd
19 Mr Mark William Daniel & Mrs Suzanne Louise Daniel
20
Falerno Investments Pty Ltd
Total issued ordinary share capital
–
–
–
–
31
31
%
–
–
–
–
–
–
–
–
238,000,000
238,000,000
100
100
Ordinary shares
%
696,303,533
21.45%
219,045,427
173,285,691
162,211,116
154,166,666
137,647,058
111,714,746
77,899,281
77,567,412
66,321,960
52,911,764
52,780,432
50,000,000
49,000,000
43,713,349
43,522,276
32,753,112
30,303,166
30,000,000
29,862,819
6.75%
5.34%
5.03%
4.75%
4.24%
3.44%
2.40%
2.39%
2.04%
1.63%
1.63%
1.54%
1.51%
1.35%
1.34%
1.01%
0.93%
0.92%
0.92%
2,292,009,808
3,245,708,912
70.62%
Substantial shareholders
The following shareholders are recorded in the Company’s register of substantial shareholders:
Holders giving notice
Ndovu Capital X BV
Delphi Unternehmensberatung
Aktiengesellschaft
IGO Ltd
Wyllie Group
Denis Waddell
Date of notice
30-04-2019
12-08-2020
27-08-2018
12-08-2020
27-08-2018
Ordinary shares as at date of notice
% holding as at date of notice
480,918,918
363,844,513
154,166,666
219,045,427
109,714,746
24.01
11.22
8.23
6.76
5.86
This information is based on substantial holder notifications provided to the Company.
116
ORION MINERALS ANNUAL REPORT 2020 FINANCIAL STATEMENTS
ADDITIONAL ASX INFORMATION co ntinue d
Voting rights
The Company’s issued shares are one class with each share being entitled to one vote.
Franking credits
The Company has nil franking credits.
Tenement schedule
Project
Right / tenement
Status
Ownership
interest
Grant date
Expiry date
Holder 1
South Africa
Prieska
Prieska
NC30/5/1/2/2/10138MR
NC30/5/1/2/2/10146MR
Repli-Doonies Pan
NC30/5/1/1/2/11840PR
Granted
Granted
Granted
ORN 70.00%
23/8/19
22/8/43
ORN 70.00%
14/8/20
Execution Pending
ORN 70.00%
29/8/18
28/8/23
28/8/23
Bartotrax
NC30/5/1/1/2/11850PR
Granted
ORN 100.00%
9/3/18
Namaqua-Disawell
NC30/5/1/1/2/10032MR
Namaqua-Disawell
NC30/5/1/1/2/10938PR
Namaqua-Disawell
NC30/5/1/1/2/11010PR
Masiqhame
NC30/5/1/1/2/00816PR
Southern Pipeline
NC30/5/1/1/2/12257PR
Southern Pipeline
NC30/5/1/1/2/12258PR
Southern Pipeline
NC30/5/1/1/2/12287PR
Southern Pipeline
NC30/5/1/1/2/12405PR
Marydale
Marydale
NC30/5/1/2/2/10174MR
NC30/5/1/1/2/12567PR
Northern Pipeline
NC30/5/1/1/2/12196PR
Northern Pipeline
NC30/5/1/1/2/12197PR
Namaqua-Disawell
NC30/5/1/1/2/12216PR
Western Australia
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Victoria
Walhalla
Walhalla
E28/2367
E28/2378
E28/2462
E28/2596
E39/1653
E39/1654
E69/2379
E69/2707
E39/1658
E39/1818
E69/2706
EL5042
EL6069
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
Application
Application
Application
Application
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
ORN 25.00%
19/9/16
Not Executed
ORN 25.00%
2/10/14 2
ORN 25.00%
2/10/14 2
8/11/22
8/11/22
ORN 50.00%
14/5/12 3
11/3/19 4
–
–
–
–
–
–
–
–
–
KMX 30%
KMX 30%
KMX 30%
KMX 30%
KMX 35%
ORN 10%
ORN 10%
ORN 10%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7/5/15
22/7/15
27/7/15
6/9/16
20/4/12
23/4/12
21/5/13
19/6/15
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6/5/20 4
21/7/20 4
26/7/20 4
5/9/21
19/4/22
22/4/22
20/5/23
18/6/20
–
–
–
–
–
PCZM
VAR
PCZM
BAR
NAM
DIS
DIS
MAS
–
–
–
–
–
–
–
–
–
IGO
IGO
IGO
IGO
IGO & GRPL
IGO & NBX
IGO & PON
IGO & PON
–
–
–
–
–
1 Holder abbreviations – ORN (Orion Minerals Ltd); GRPL (Geological Resources Pty Ltd); IGO (IGO Ltd); KMX (Kamax Resources Limited);
NBX (NBX Pty Ltd); PON (Ponton Minerals Pty Ltd); NAM (Namaqua Nickel Mining (Pty) Ltd); DIS (Disawell (Pty) Ltd); MAS (Masiqhame
855 (Pty) Ltd); PCZM (Prieska Copper Zinc Mine (Pty) Ltd); VAR (Vardocube (Pty) Ltd); BAR (Bartotrax (Pty) Ltd).
2 Prospecting Right executed on 9 November 2017.
3 Prospecting Right executed on 12 March 2014.
4 Renewal application lodged.
117
ORION MINERALS ANNUAL REPORT 2020 CORPORATE DIRECTORY
Company Secretary
Martin Bouwmeester
Registered office and Principal place of business
Suite 617
530 Little Collins Street
Melbourne, Victoria, 3000
Telephone: +61 (0) 3 8080 7170
Website: www.orionminerals.com.au
Share Registry
Link Market Services Limited
QV1, Level 2, 250 St Georges Terrace
Perth, Western Australia 6000
Telephone: +61 1300 306 089
Auditor
BDO Audit Pty Ltd
Level 18
Tower 4, 727 Collins Street
Docklands Victoria 3008
Stock Exchange
Primary listing:
Australian Securities Exchange (ASX)
ASX Code: ORN
Secondary listing:
JSE Limited (JSE)
JSE Code: ORN
JSE Sponsor
Merchantec Capital
2nd Floor, North Block
Corner 6th Road and Jan Smuts Avenue
Hyde Park
Johannesburg 2196
79
Au
Gold
29
Cu
Copper
30
Zn
Zinc
28
Ni
Nickel
27
Co
Cobalt
PGE
PGE
ASX: ORN | JSE: ORN
www.orionminerals.com.au