A
ANNUAL REPORT
2017
Orion Minerals Annual Report 2017 ABN 76 098 939 274
CONTENTS
02 Chairman’s Report
04 Review of Operations
29 Directors’ Report
55 Auditor’s Independence Declaration
56 Consolidated Statement of Profit or Loss
57 Consolidated Statement of Financial Position
58 Consolidated Statement of Cash Flows
59 Consolidated Statement of Changes in Equity
60 Notes to the Financial Statements
94 Directors’ Declaration
95
Independent Auditor’s Report
102 Additional ASX Information
103 Corporate Directory
0101
> Acquisition of Prieska Zinc-Copper Project and Marydale
Gold-Copper Project completed March 2017
> Commencement of bankable feasibility study at
Prieska Zinc-Copper Project
> Excellent initial results from intensive drilling program to
test Deep Sulphide Target at Prieska Zinc-Copper Project
> High grade near surface supergene sulphides identified
in drilling at +105 Level Target (Open Pit) at Prieska
Zinc-Copper Project
> Value of application of modern exploration methods in
Areachap Belt demonstrated at Kantienpan and Marydale
exploration projects
> Cornerstone investor and strategic relationship with
Tembo Capital Mining Fund II LP established April 2017
> Fraser Range joint venture agreement with Independence
Group NL
HIGHLIGHTS
2016/17
Orion Minerals Annual Report 2017 02
CHAIRMAN’S REPORT
Dear Shareholder,
This reporting period has seen significant advancement in the Company’s Prieska Zinc-Copper Project and exploration
portfolio located in the Northern Cape of South Africa. Orion’s decision in 2015 to focus on acquiring zinc-copper
projects at the bottom of the base metals cycle culminated in the acquisition of unlisted company, Agama Exploration
& Mining (Pty) Ltd (Agama), a South African registered company which, through its subsidiary companies, ultimately
holds an effective 73.33% interest in the Prieska Zinc-Copper Project and the Marydale Gold-Copper project. In
addition to the Agama acquisition, two earn-in agreements on large prospecting rights along strike from Prieska,
effectively consolidated an exceptional development and exploration opportunity.
Agama holds exclusive mineral exploration rights over one of the world’s largest volcanogenic massive sulphide
(VMS) zinc-copper deposits, the Copperton Deposit, located at the historic Prieska Copper Mine, in the Northern
Cape Province of South Africa. In the Director’s view, such acquisition, combined with securing additional ground
holdings in the Northern Cape Province of South Africa totalling 1790km2, has positioned the Company for major
growth going forward.
Importantly, it is the first time that tenement holdings in this highly prospective region have been consolidated under
a single owner, with the region having no major exploration activity for over 35 years. With the application of modern
exploration tools over a terrane which hosts 22 identified VMS occurrences discovered by major mining companies in
the 1970’s and 80’s, the probability of further exploration success is considered very high. In addition to the potential
for new discoveries, most of the identified occurrences remain open down dip and along strike. To assist in prioritising
drill targets, the Company is about to embark upon a large regional airborne electromagnetic survey.
With the acquisition of Agama now completed, the Company has embarked on an intensive growth and development
strategy, initially focused on expeditiously developing the Prieska Project towards production, which will establish the
Company as a significant new participant in the global base metal sector.
During the year, the Company has rapidly progressed drill programs to enable estimation of JORC compliant Mineral
Resources at both the +105 Level Target (Open Pit) and Deep Sulphide Target by Q1, 2018. With 14 drill rigs in
operation, both at surface and underground, positive drill results have been returned which continue to confirm and
validate the historical drill data information compiled by the Company. Importantly, drilling results have also identified
dip and strike extensions to historically identified mineralisation. I refer you to the Review of Operations section of this
report for the positive results received to date.
In conjunction with the drill programs, the Company has also commenced a bankable feasibility study and environmental
impact assessment for the Prieska Project. Completion of both is expected by Q4 2018.
On 12 April 2017, the Company announced that it had taken another important step in its base metal development
strategy in South Africa after entering into an agreement with leading mining-focused private equity group, Tembo
Capital Mining Fund II LP (Tembo), which contemplated that Tembo would acquire a cornerstone stake in the
Company and a strategic relationship would be formed between the two groups. Tembo now holds 19.9% of Orion
and has provided additional funding as set out in the Corporate section of this report.
In Australia, the Company also entered into a Joint Venture Agreement (JVA) with Independence Group NL over its
ground holdings in the Fraser Range area, Western Australia. Importantly, the Company is free carried through to
pre-feasibility study on any of the ground acquired under the JVA while retaining between 10% and 35% interest in
the JVA.
Given the acquisitions made during the year, the Directors agreed that the name of the Company should be changed
to reflect the future direction of the Company and the diversification into base metals. After receiving shareholder
approval in May 2017, Orion Gold NL changed its name to Orion Minerals NL.
Orion Minerals Annual Report 2017 03
In September 2017, the Company successfully listed on the Johannesburg Stock Exchange as a dual listing,
alongside the primary listing on the Australian Securities Exchange. The secondary listing is consistent with the
Company’s strategy of engaging South African capital markets in the funding strategy of the Prieska Project and
providing South Africans with an opportunity to invest, alongside foreign investors, to advance a South African base
metal mining opportunity.
For more details on our Projects, I refer you to the Key Points on the previous page and to the Review of Operations
section of this report.
On behalf of the Board of Directors, I sincerely thank our Managing Director, Mr Errol Smart and our dedicated team
of employees and consultants for their very significant contribution to what has been achieved during the past year
and for positioning the Company in a very sound position for future success.
I also thank you, our shareholders, for your ongoing support of the Company.
Yours faithfully,
Denis Waddell
Chairman
Orion Minerals Annual Report 2017 04
REVIEW OF OPERATIONS
AREACHAP BELT – SOUTH AFRICA
Prieska Zinc-Copper Project
The Company completed the acquisition of Agama Exploration & Mining (Pty) Ltd (Agama) in March 2017. Agama
holds exclusive mineral exploration rights over one of the world’s largest volcanogenic massive sulphide (VMS) zinc-
copper deposits, the Copperton Deposit, located at the historic Prieska Copper Mine, in the Northern Cape Province
of South Africa.
The Company, through Agama’s subsidiary companies, now holds an effective 73.33% interest in the Prospecting
Rights covering both the Prieska Zinc-Copper Project (Prieska Project) and the Marydale Gold-Copper Project,
(Figure 11). The Marydale Project is a volcanogenic gold-copper discovery located 60km from the Prieska Project.
A well-established Broad Based Black Economic Empowerment ownership structure, comprised of strong local
partners, holds the balance of the projects’ interests (26.67%).
With the acquisition now completed, the Company has embarked on an intensive growth and development strategy,
initially focused on expeditiously developing the Prieska Project towards production, which will establish the Company
as a significant new participant in the global base metal sector.
Prieska Zinc-Copper Project
The Prieska Project is located 270km’s south-west of Kimberley (the regional capital) in the Northern Cape province
(Figure 1). Importantly, the project has access to significant local and regional infrastructure, with mine infrastructure,
including a regional power grid feed, bitumen access roads, access to a bulk, treated water supply and a 1,700m
landing strip. Several large commercial wind and solar generation projects are operational in the surrounding area and
the mine is located just 48km’s from a railway siding at Groveput with an open-access railway line connecting the site
to the world-class export port of Saldanha Bay.
The Prieska Project encompasses the historical Prieska Copper Mine, which was operated by Anglovaal Limited
between 1971 and 1991. During this time, the mine produced more than 1 million tonnes of zinc and over
430,000 tonnes of copper from an underground operation based on an initial drilled reserve(1) of 47Mt grading 1.74%
copper, 3.87% zinc, 8g/t silver, 0.4g/t gold and 30% pyrite. The operation was a significant financial success for its
owners, repaying US Dollar denominated loans at commercial rates and returning ZAR2.64 per share (US$1.16 in
money of the time) in dividend yields for an investment of ZAR0.5 per share (US$0.70) by the shareholders.
Mining ceased in 1989, with milling ceasing in 1991. The site was closed and rehabilitated in 1991. The premature
closure of the mine, leaving behind a significant portion of the Copperton deposit, was influenced by a strategic
decision to focus on maximising dividend yields, rather than investing further in underground capital development to
extend mine life.
The underground development and regional infrastructure and services in place at the mine is estimated by
the Company to have significant replacement value, which will assist in the feasibility and economics of any
redevelopment of the mine. The underground mine is accessed via an 8.8m diameter concrete lined vertical shaft
to a depth of 1,024m. Three separate ramp declines (6.5m by 3.8m) have been developed to access the deepest
ore at a vertical depth of 1,140m. The Deep Sulphide mineralisation lies in a synformal structure and the targeted
mineralisation lies in the keel and up-turned limb of the syncline, to a depth of 1,200m below surface.
Exploration and Mineral Resources Definition
As part of the due diligence process, the Company digitally captured, validated and modelled all relevant project
drilling data available from hard-copy sources. Following the completion of the acquisition, the Company implemented
a major drilling program at the Prieska Project, which is continuing.
(1) Note – this is not a JORC Compliant figure, source Prieska Copper Mines Ltd Annual Report 1970.
Orion Minerals Annual Report 2017 05
Drilling aims to advance the +105 Level Target (Open Pit) and Deep Sulphide Target to a level of confidence
where Mineral Resources (as defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC Code)) can be defined. Drilling is ongoing at a rapid pace,
with the Company currently advancing the Deep Sulphide Target with 10 surface diamond drill rigs. A further 3
underground drill rigs are operating, at the +105 Level Target (Open Pit), to confirm and increase the delineation
of the mineralised zone. As at 30 September 2017, 11,929m of diamond drilling and 7,915m of percussion drilling
has been completed (Figure 2).
Figure 1: Location of Areachap Belt Projects, South Africa.
Figure 2: Longitudinal projection showing the +105 Level Target (Open Pit) and Deep Sulphide Target as well as drilling on the Deep Sulphide Target.
The current drilling program at the +105 Level Target (Open Pit) is designed to confirm, in-fill and extend mineralisation
delineated by historical drilling and targets mineralisation that would be amenable to extraction via open pit (Figures
2 and 3). The Company has announced drilling results of 24 drill holes with best results, to date, shown in table
1. Resource drilling from surface on the +105 Level Target (Open Pit) is completed and the Company is currently
operating 3 drill rigs from underground (Figure 4).
Orion Minerals Annual Report 2017
06
REVIEW OF OPERATIONS CONTINUED
Drill hole
East
(UTMz34S)
North
(UTMz34S)
Depth
(m)
From
(m)
To
(m)
Length
(m)
Cu
(%)
Zn
(%)
Au
(g/t)
Ag
(g/t)
OCOR012A
624166
6686808
OCOR013A
624199
6686776
OCOR014
OCOR015
624228
624228
6686776
6686744
OCOR016
624340
6686653
OCOR017
624361
6686618
OCOR020
624300
6686626
OCOR023
624347
6686621
OCOR025
624378
6686544
OCOR027
624393
6686556
OCOR028
OCOR029
OCOR030
624363
624394
624292
6686561
6686534
6686713
OCOR031
624252
6686723
OCOD033
624503
6686323
OCOD035
624477
6686355
OCOD036
624375
6686455
39
42
42
108
108
incl.
77
incl.
38
85
incl.
49
110
incl.
incl.
43
46
103
61
23
36
15
36
35
83
57
62
57
63
10
48
63
8
55
55
75
7
5
71
17
46
31
39
20
42
40
86
79
69
69
66
20
68
66
25
97
60
81
24
25
77
20
60
186.14
161
163
184.7
incl.
149.25
170.71 180.05
156.1
167.9
103
112.6
176.7
170.5
105
142
incl.
115
123.5
incl. 129.06 131.11
incl.
incl.
134 137.35
139
142
OCOD037
624406
6686417
157.29 147.53 152.75
OCOD038
624406
6686417
141.21
103.8
106.5
110.98 111.90
113.80 115.63
126.44 130.88
132.28 137.17
OCOD040
624553
6686302
149 119.48 123.60
8
3
5
6
5
3
22
7
12
3
10
20
17
17
42
5
6
14
20
6
3
14
2
9.34
20.6
2.6
2
29.4
8.5
2.05
3.35
3
5.22
2.70
0.92
1.83
4.44
4.89
4.12
OCOD043
624563
6686287
202.3 187.76 199.29
11.53
incl. 189.22 192.56
OCOD044
OCOD047
624483
624844
6686360
94.6
59.56
65.50
6686154
117.8 143.70 147.47
OCOU073
624777
6686284
75
50.00
56.00
54.82
59.00
3.34
5.94
3.07
4.82
3.00
0.31
0.50
0.92
0.60
2.10
0.40
1.38
1.41
4.14
7.40
0.39
2.21
2.01
0.86
2.36
9.28
0.90
0.94
0.53
1.90
1.22
0.30
0.14
1.40
0.63
0.49
3.25
1.52
2.17
1.09
3.82
0.44
1.42
1.20
3.04
1.38
1.46
1.19
2.83
0.97
1.51
0.58
0.47
1.10
5.65
0.92
1.36
1.56
0.68
0.34
1.40
10.8
17.8
1.89
4.34
1.13
8.58
9.98
1.00
4.41
0.10
12.4
0.56
0.65
0.85
0.26
0.71
1.02
4.00
1.36
5.20
0.52
3.06
4.33
4.86
3.31
7.13
4.95
1.02
0.06
0.50
3.03
1.78
0.35
3.23
5.26
1.16
1.06
0.63
1.00
0.03
0.02
0.04
0.03
0.01
0.05
0.30
0.26
0.29
0.08
0.16
0.36
0.37
0.55
0.42
0.65
0.29
0.09
0.10
0.39
0.03
0.01
0.14
0.13
0.11
0.11
0.37
0.36
0.35
0.24
0.47
0.13
0.38
0.21
0.14
0.07
0.13
0.16
0.01
0.22
0.36
0.01
0.09
0.33
0.34
0.5
0.6
0
0.3
0
2.3
9.7
6.9
9.9
1.3
1.0
12.1
2.3
8.1
13.6
31.6
6.7
0.9
1.5
8.2
1.0
0.6
7.0
9.0
8.9
13.9
20.1
9.0
11.3
7.4
23.5
2.9
15.6
2.7
4.0
3.3
4.2
5.7
0.5
8.8
8.3
0.9
1.3
12.7
17.0
Table 1: Drill hole intersections from the +105 Level Target (Open Pit) (refer ASX release 6 September 2017).
All intersections are length weighted.
Orion Minerals Annual Report 2017 07
Figure 3: Section showing drilling at the +105 Level Target (Open Pit) with results from OCOR022, OCOR023 and OCOR016.
Figure 4: Oblique view showing current underground drilling at the Prieska Project.
Orion Minerals Annual Report 2017
08
REVIEW OF OPERATIONS CONTINUED
At the Deep Sulphide Target, drilling is targeting strike and dip extension of mineralisation that was not mined in
historical underground mining. Drilling aims to provide statistical validation of historic drilling that intersected the
unmined mineralised zones and add to infill data so that the resultant data spacing meets the requirements for a
Mineral Resource estimate. In addition, holes will be drilled to test potential extensions to mineralisation down dip and
along strike on targets identified from a recently completed high powered electromagnetic (EM) survey. To date, the
Company has announced drilling results of 11 drill holes from the Deep Sulphide Target (Figures 5 and 6, Table 2).
The reported results as at 30 September, 2017 are shown in table 2.
Drill hole
Deflection
East
(UTMz34S)
North
(UTMz34S)
Depth
(m)
From
(m)
To
(m)
Length
(m)
Cu
(%)
Zn
(%)
Au
(g/t)
Ag
(g/t)
OCOD048
Parent
624452
6686375
1179 1060.00 1082.45
22.45 1.34 5.33 0.26 10.60
D2
From 702m
downhole parent
including 1060.80 1066.50
5.70 0.54 10.89 0.07 3.45
--- 1064.00 1066.35
2.35 0.56 5.13 0.09 3.45
--- 1070.59 1089.69
19.10 1.58 3.38 0.39 15.30
OCOD052
Parent
624419
6686406
1164
1089
1091
2 0.08 1.40 0.39 5.51
D2
From 785m
downhole parent
1116.00 1132.15
16.15 1.72 3.30 0.26 13.72
including 1119.55 1123.55
4.00 1.35 5.34 0.26 8.45
--- 1117.59 1133.51
15.92 0.95 5.55 0.22
7.5
OCOD054
Parent
624576
6686282
--- 1026.20 1037.94
11.74 1.23 3.11 0.17
10
OCOD059
Parent
624824
6686282
OCOD062
Parent
625647
6685275
---
---
1003.43 1004.11
0.68 0.09 5.45 0.08 14.0
1010.89 1011.89
1.00 0.07
4.5 0.08
1122.26 1123.30
1.04 0.20 7.93 0.08
9.0
3.0
1124.70 1127.60
2.90 0.74 3.51 0.21 11.3
OCOD063
OCOD065
OCOD066
Parent
Parent
Parent
625400
6685250
--- 1045.00 1048.00
3.00 0.43 2.41 0.16
5.3
624520
6686338
--- 1022.20 1029.45
7.25 1.09 5.07 0.22 6.69
624349
6686476
--- 1111.95 1114.50
2.55 0.70 0.99 0.05
4.9
OCOD046
624610
6686251
1017.00 1017.00 1027.65
10.65 0.80 4.19 0.15 5.72
1126.15 1126.78
0.63 5.39 2.61 0.91 38.0
OCOD059_
D1
OCOD062
OCOD072
1031.70 1031.70 1034.00
2.30 1.04 4.14 0.33
624824
6686282
998.00
998.00 1009.15
11.15 0.33 3.42 0.15
1023.60 1023.60 1033.40
9.80 0.72 7.96 0.13
5.4
9.7
5.5
1040.86 1040.86 1045.32
4.46 0.55 5.06 0.10 8.42
625647
6685275
1108.45 1108.45 1110.52
2.07 0.61 5.33 0.28 7.60
625714
6685217
1101.70 1101.70 1107.05
5.35 0.72 5.14 0.22 6.28
Table 2: Drill hole intersections from the Deep Sulphide Target (refer ASX release 6 September 2017 and 17 September 2017).
All intersections weighted by length and specific gravity.
Orion Minerals Annual Report 2017 09
Figure 5: Plan showing historic isopach map of interpreted mineralisation and current drilling at the Prieska Project Deep Sulphide Target
(northwest area).
Figure 6: Section showing drilling results at the Prieska Project Deep Sulphide Target.
Orion Minerals Annual Report 2017
10
REVIEW OF OPERATIONS CONTINUED
Feasibility Studies
Figure 7: Conceptual underground mine layout for Prieska Project Deep Sulphide Target.
In June 2017 DRA Projects SA Pty Ltd (DRA) and ABS Africa Pty Ltd (ABS) were appointed as the lead consultants
to advance the Prieska Project bankable feasibility (BFS) and environmental impact assessment (EIA) studies
respectively. The two companies were selected following an extensive tendering and assessment process conducted
by management with the assistance of R&R Quantity Surveyors and Project Managers, Earth Science Solutions
(environmental consultants) and Falcon Hume Incorporated (legal practitioners) as external third-parties to structure
and guide the adjudication and award process and to prepare contracts.
DRA is managing the BFS and is the overall study coordinator and compiler. ABS is overseeing the EIA studies
associated with the BFS. The METS Group will be retained to undertake periodic peer reviews of the feasibility
studies as they are progressed, whilst SRK Consulting SA Pty Ltd will peer review the associated mineral resources
evaluation.
The BFS will incorporate both open pit (+105) and underground (Deep Sulphide) developments utilising the historic
mine and drill database as well as new drilling information. Historic data was reviewed during the due diligence
process and provides a starting point for potential mining methods, mineral processing options, mining infrastructure
establishment, mine operating philosophy, environmental management aspects, licences to operate applications,
capital and operating cost estimations and other key parameters being investigated in the BFS. In addition, the
underground development and regional infrastructure and services in place at the mine is estimated by the Company
to have significant replacement value, which will assist in the feasibility and economics of any potential redevelopment
of the mine.
The BFS and EIA work programs are being undertaken in parallel with the current activities (resource drilling, Mineral
Resource estimation, underground inspections and establishment of activities). The BFS will build on both the
substantial existing historical dataset relating to mining and processing activities as well as the new information being
generated by the onsite activities.
The Company has also commissioned a bulk power supply study through Eskom, the state power supply company.
Eskom will investigate the technical and commercial requirements of re-establishing power supply from their Cuprum
Substation that is located on the project site.
Investigations into re-using the existing Prieska to Copperton water pipeline are also under way, with discussions
now in progress with the Siyathemba Municipality and other water pipeline users. Preliminary engineering inspections
of the water supply infrastructure indicate that sufficient capacity exists to support a large-scale mining and ore
processing operation.
Product logistics, transport and marketing is being assessed by Cart Investments.
Orion Minerals Annual Report 2017 11
Mine Re-entry and Geotechnical Appraisal
The Company has made significant progress in assessing the state of existing mine infrastructure at the Prieska
Project. Safe underground access has been re-established via the main decline roadway and the main vertical shaft
(Hutchings Shaft) has also been re-entered and visually inspected down to the accumulated water level, being 360m
below surface, with the shaft bottom being at 1,024m below surface.
Figure 8: (LHS) Excavating Prieska Project portal (RHS) Rehabilitated decline at Prieska Project portal.
The portal and main decline had been partially backfilled as part of mine closure in 1991. These have been fully re-
excavated and rehabilitated to allow for safe vehicular access. Though both portal and decline roadway were in very
good condition, some precautionary re-supporting work was conducted to meet contemporary safety standards. This
remedial work has required a careful and systematic approach, using a select and experienced underground re-entry
team, to ensure best practice workplace safety for our people.
Ground conditions and infrastructure in the underground mine, now inspected down to 360m below surface, were
found to generally be in a better state than was expected (for example Figure below).
Figure 9: 294m below surface level at Prieska Project - Water settlors still useable.
Orion Minerals Annual Report 2017
12
REVIEW OF OPERATIONS CONTINUED
Underground roadways were all trafficable after minor scraping to improve mobile equipment traction and installation
of precautionary ground support was required. The Company is confident that mine refurbishment will not require a
substantial engineering effort.
Underground drilling platforms were established to allow for the infill drilling of the +105 Level Target (Open Pit)
and the collection of additional metallurgical and geotechnical investigation samples. The setup has required the
installation of mine services, upgrading of ventilation and establishing of underground communications.
The Hutchings Shaft was re-entered for visual inspections using a Skyjack hoist and platform assembly. The integrity
of the shaft and the concrete lining down to the water level were found to be well preserved. Non-destructive testing
was carried out on some of the steelwork in the main shaft column as well as in the 68m-high concrete headframe.
This work confirmed that the main carrier steelwork remains in good condition and should not require replacement
ahead of possible future recommissioning.
Figure 10: (LHS) Visual Inspection of Hutchings Shaft (RHS) Non-destructive testing of Hutching Headframe
Underground access is facilitating more efficient data gathering for the feasibility studies, allowing amongst others,
more accurate infill drilling, geotechnical mapping and back analysis, assessment of the condition of the mine crown
pillar, sampling and inspection of historical draw points and better access to the shaft infrastructure.
On surface, geotechnical monitoring stations have been established on the western edges of the sinkholes that abut
the +105 Level Target (Open Pit) and baseline readings taken to supplement visual inspections being used to track
ground stability. Since the installations in May 2017, the beacons show that no significant movement or change has
occurred adjacent to the +105 Level Target (Open Pit).
The accumulated water level in the mine has been sampled for environmental baseline studies and to confirm
suitability for use in metallurgical processing. Water samples have been collected via the Hutchings Shaft from depths
of 360m, 400m, 500m, 600m and more recently 900m below surface. Analysis of the water samples down to 600m
indicate that the water has a neutral pH of 7.4, providing encouragement that the submerged steel and concrete in
the Hutchings Shaft will not have corroded with time.
Orion Minerals Annual Report 2017 13
Marydale Gold-Copper Project
In addition to the Prieska Project, the Agama transaction gives the Company exploration right over the Marydale
Gold-Copper Project (Marydale Project), a virgin gold discovery of possible high sulphidation epithermal origin
located 60km from the Prieska Project (Figure 11). Historical drilling following the discovery was carried out in various
orientations and, despite wide zones of mineralisation being returned, the majority of these are now seen to be sub
optimal. The Company drilled two holes adjacent to historical drilling at the NW Quadrant Prospect in late 2016 as
part of due diligence investigations prior to the acquisition of Agama.
Figure 11: Regional geology map of the Areachap Belt showing prospecting rights currently under option to the Company and noted mineral
occurrences as per published data from South African Council for Geoscience.
Hole OWD032 intersected 64m at 1.55g/t Au and 0.26% Cu from 22m down- hole. This intersection includes a
higher grade interval of 21m at 2.93g/t Au and 0.34% Cu including 5m at 5.09g/t Au and 0.37% Cu (ASX release
17 August 2016). OWCD033 intersected 25m at 1.81g/t Au and 0.31% Cu from 67.5m down-hole, including a
higher grade interval of 11.6m at 2.63g/t Au and 0.36% Cu including 3m at 4.23g/t Au and 0.54% Cu, as well
as 2.4m at 1.61g/t Au and 0.32% Cu from further downhole (134.1m) (ASX release 5 October 2016). The broad
zones of mineralisation intersected are consistent with historical drilling (Figure 12).
Orion Minerals Annual Report 2017
14
REVIEW OF OPERATIONS CONTINUED
Figure 12: Plan showing results from the Company and historical drilling at the NW Quadrant area of the Marydale Gold-Copper Project.
Figure 13: Highly sulphidic, blebby and net-textured sulphides associated with elevated gold-copper mineralisation, indicating suitability for EM detection.
Following the receipt of drilling results, the Company undertook a high powered induced polarisation (IP) survey at the
Marydale Project. A previous survey carried out by Anglo American Prospecting Services (AAPS) in 1973 detected
a number of anomalies including the NW Quadrant prospect, leading to the AAPS drilling which discovered copper-
gold mineralisation at this prospect. The Company’s IP survey was undertaken in 3D array using higher powered and
more modern instruments than the previous survey with the objective of looking deeper and providing more defined
targets.
The IP survey delineated an extensive arcuate chargeability anomaly, semi-continuous over 1.7km, extending from
the NW Quadrant area parallel to a major regional shear zone. The Company completed 4 holes for 1,464m as an
initial test of the anomaly and several zones of disseminated sulphides were intersected, a number of which returned
anomalous levels of copper and gold in assays.
Orion Minerals Annual Report 2017
15
Figure 14: 134m depth slice of IP response (chargeability) over the Marydale Gold–Copper Project.
Orion Minerals Annual Report 2017 16
REVIEW OF OPERATIONS CONTINUED
Kantienpan Deposit
In April 2016, the Company entered into a binding option agreement to earn up to a 73% interest in Masiqhame
Trading 855 Pty Ltd (Masiqhame), which holds a prospecting right covering an area of almost 980km2, located
80km north of the Prieska Project (Figure 11). The key terms of the option agreement are set out in the Corporate
section of this report. The Company has targeted the large Masiqhame prospecting right after analysing regional data
which points to the potential for three significant styles of mineralisation:
• Zinc-copper VMS-VHMS mineralisation in the Areachap Belt;
• The Masiqhame Permit overlies a highly prospective VMS horizon extending over more than 30km of strike. This
horizon contains numerous occurrences of copper-zinc and zinc-copper mineralisation associated with massive
sulphides;
• Nickel-Copper mineralisation hosted in mafic intrusions related to the Jacomynspan Deposit; and
• Pegmatite hosted mineralisation such as lithium, beryl and REEs in the Orange River pegmatite belt.
Due diligence investigations were carried out between April 2016 and September 2016, followed by the Company
exercising its option (subject to regulatory approvals) to acquire an initial 50% in Masiqhame in late September 2016.
The Kantienpan Deposit is one of several VMS hosted zinc-copper occurrences within the Masiqhame prospecting
right. The deposit was targeted by a combination of magnetic and time-domain electromagnetic ground surveys,
following up on alteration identified by rock-chip sampling.
Historically, a total of 14 diamond core holes for 3,199m were drilled at the Kantienpan Deposit by Iscor Ltd.
Significant intersections included the following results:
• 8.84m at 6.32% Zn and 1.02% Cu (KN005);
• 6.15m at 4.74% Zn and 0.49% Cu (KN010);
• 7m at 3.15% Zn and 0.57% Cu (KN007);
• 13m at 3.96% Zn and 0.36% Cu (KN003); and
• 2.6m at 6.59% Zn and 0.35% Cu (KN011).
(refer ASX release 31 May 2016, including further historical results)
Historic drilling has confirmed the presence of significant mineralisation extending from 80m – 250m below surface
and along 800m of strike (Figure 15). Mineralisation at the Kantienpan Deposit remains open both along strike and
at depth with massive sulphides intersected in OKNR014 at the southern end of the deposit. Assays from this hole
returned 7m at 6.45% Zn and 0.43% Cu from 60m including 3m at 7.94% Zn and 0.50% CU from 63m (Figure
16, refer ASX release 29 September 2016).
Orion Minerals Annual Report 2017 17
Following completion of 2 RC holes for 213m the Company conducted EM and magnetic surveys at the Kantienpan
Deposit. A high-powered fixed loop electromagnetic (HP_ FLEM) survey identified a previously undetected highly
conductive body below the extent of historical drilling at the Kantienpan deposit. The KN1 conductor was modelled to
be substantially larger and 3-4 times more conductive than the shallower portion of the deposit (Figure 15).
Figure 15: Plan showing the Company’s drilling at Kantienpan on response from Channel 30 from the Company’s recent HP_FLEM survey.
Historical drilling and modelled conductors (including KN1) from survey data are also shown.
The survey also detected smaller conductors in the footwall of the current known mineralisation. Stacking of
mineralised bodies is a common occurrence in VMS deposits.
Drill testing of the conductors yielded encouraging results as tabulated in table 3 including 2.05m at 9.93% Zn and
0.09% Cu from 404.87m (OKND016) and 1.91m at 4.35% Zn and 0.32% Cu from 404.12m (OKND017) and
demonstrated the value of the application of modern exploration methods in this environment. The highly prospective
stratigraphic horizon, which has been traced for at least 7km south of the initial drilling target, will be examined using
similar EM methods in coming months.
Orion Minerals Annual Report 2017 18
REVIEW OF OPERATIONS CONTINUED
Figure 16: Massive sulphides in OKNR014 which returned 7m at 6.45% Zn and 0.43% Cu from 60m.
(Note each divider shows chips from a 1m interval)
Borehole Number
EOH (m)
From (m)
To (m)
Width (m)
CUT-OFF 1% Zn
OKNR014
including
OKNR015
OKND016
including
OKND017
OCKN018B
78.00
135.00
450.09
443.60
450.75
60.00
63.00
404.87
409.75
404.12
423.62
67.00
66.00
406.92
413.30
406.03
424.88
7.00
3.00
2.05
3.55
1.91
1.26
Zn%
6.45
7.94
9.93
2.13
4.35
3.54
Cu%
0.43
0.50
No intersection
0.09
0.35
0.32
0.30
Table 3: Summary table of significant intersections drilled by the Company on the Kantienpan deposit.
Orion Minerals Annual Report 2017 19
Jacomynspan Nickel-Copper-PGE Project
In July 2016, the Company entered into a binding term sheet to acquire the earn-in rights to the prospecting and
mining right applications covering a further area of 626km2 in the Areachap Belt. The earn-in rights have been acquired
over the Jacomynspan Nickel-Copper-PGE Project (Jacomynspan Project) from two companies, Namaqua Nickel
Mining (Pty) Ltd (Namaqua) and Disawell (Pty) Ltd (Disawell), which hold partly overlapping prospecting rights and
mining right applications. In September 2017, the Company entered into a binding earn in agreement, principally on
the same terms as the binding term sheet. Further details are set out in the Corporate section of this report.
The Namaqua mining right application covers an advanced nickel-copper-platinum group elements (PGE) deposit
with a completed mining concept study, while the Disawell prospecting rights are focused on zinc-copper VHMS
deposits such as those at the Prieska Project and Kantienpan Project discussed above. The Jacomynspan Project
area is contiguous with the prospecting rights held under the Company’s Masiqhame transaction and adjacent to the
Marydale Prospecting Right (Figure 11).
The Jacomynspan Project area contains numerous known occurrences of VHMS style zinc-copper deposits and is
highly prospective for magmatic hosted nickel-copper mineralisation similar to that seen in Proterozoic mobile belts
worldwide including the Thompsons Belt in Canada and the Albany-Fraser Belt in Western Australia. A number of
mafic-ultramafic intrusions have been recognised within the project area, with most historical work focusing on the
Jacomynspan Deposit.
A substantial exploration opportunity exists within the project area to search for higher grade, massive and semi-
massive accumulations of nickel-bearing sulphides, analogous to the Nova-Bollinger deposit in the Fraser Range
Province of Western Australia.
The Company has identified many similarities to the Fraser Range-style of mineralisation from historical data available
for the project area and the surrounding Areachap belt. This includes:
• mafic-ultramafic intrusives of late Proterozoic age;
•
intruded in intercratonic/craton margin tectonic setting;
• hosted in high metamorphic grade rocks (garnet, amphibolite gneisses) within a mobile belt;
•
•
•
the presence of evolving magmas yielding multi-phase intrusives, including mafic to ultramafic rocks. Importantly,
lithologies observed at the Jacomynspan Project include anorthosites, hartzburgites and various metamorphic
equivalents;
the identification of nickel and copper-bearing sulphides with minor cobalt and PGE’s (higher concentrations than
in Fraser Range) at numerous localities;
low-grade, disseminated nickel-copper sulphide bodies are re-intruded by cumulate textured mafics, with net
textured and massive sulphides present; and
•
shallow, recent cover sequences (calcrete and soil) obscures much of the surface expression on the belt.
The Company will be utilising its experience and expertise developed in exploring for magmatic nickel-copper
deposits to reinterpret the extensive database for the Jacomynspan Project area and rank the existing prospects.
These prospects will then be followed up with modern high-powered geophysical tools and methods which have not
previously been applied in the Areachap belt, to assist in better defining drill targets. The results of the HP_FLEM
survey at Masiqhame, where a strong conductor was not detected by the historical ground EM survey, highlights the
potential for the detection of massive sulphide deposits, associated with numerous known disseminated sulphide
bodies. Activities during the year comprised data compilation and review.
Orion Minerals Annual Report 2017 20
REVIEW OF OPERATIONS CONTINUED
AUSTRALIA
Fraser Range Project (Western Australia)
On 10 March 2017, the Company announced that it had secured the involvement of Independence Group NL
(ASX: IGO), the owner of the Nova Bollinger Mine, in the ongoing exploration and evaluation of its highly prospective
tenement package in the Fraser Range region of Western Australia (Fraser Range Project), after entering into a
landmark joint venture agreement (JVA) with the leading mid-tier miner. The key terms of the JVA are set out in the
Corporate section of this report.
The JVA over the Fraser Range Project is funded by IGO to the completion of pre-feasibility by IGO. The Fraser
Range Project consists of a substantial tenement holding in the Albany-Fraser Belt, which hosts Australia’s two most
significant discoveries of the last decade (the Tropicana Gold Deposit and the Nova Nickel-Copper-Cobalt Deposit).
Prior to the establishment of the JVA, the Company had completed first pass geophysical surveys over the southern
portion of its Fraser Range Project area.
Orion Minerals Annual Report 2017 21
Figure 17: Plan showing the Company’s Fraser Range Project and ownership/JV structure over regional gravity image.
Also shown is IGO tenure (including JVs).
Orion Minerals Annual Report 2017 22
REVIEW OF OPERATIONS CONTINUED
Connors Arc Project (Queensland)
With the Company’s main focus on its South African projects, exploration on the Company’s extensive Queensland
landholding was limited to geological reconnaissance at new prospects in the northern portion of the Company’s
holdings and preparation for a planned drill program at the Chough, 6 Mile Creek and Killarney prospects.
Figure 18: Location of tenements in the Connors Arc Project
Orion Minerals Annual Report 2017 23
Corporate
The Company recorded a loss of $7,929,737 after tax for the full-year ended 30 June 2017. Net cash used in
operating activities totalled $6,542,963 and in investing activities totalled $4,127,692. Cash on hand at the end of
the year was $3,405,252.
The Company continues to focus strongly on exploration within its Areachap Copper-Zinc and Gold Project (South
Africa), Connors Arc Epithermal Gold Project (Queensland) and its Fraser Range – Gold-Nickel-Copper Project
(Western Australia). A total of $5,070,442 in exploration expenditure was incurred during the year.
Acquisition of the Prieska Project and Marydale Gold-Copper Project (South Africa)
As referred to in the Operations section of this Report, on 29 March 2017, the Company completed the acquisition
of Agama, an unlisted South African registered company. Following the acquisition, through its subsidiary companies,
the Company now holds an effective 73.33% interest in the Prieska Project, located at Copperton, Northern Cape
Province, South Africa and the Marydale Project, located 60km from the Prieska Project.
Prior to the acquisition of Agama, in July 2015, the Company announced the signing of a binding term sheet giving
the Company the right to acquire Agama. During the option period, the Company undertook comprehensive due
diligence including conducting exploration programs at both the Prieska Project and Marydale Project, leading to the
exercise of the option by the Company as announced to the ASX on 3 January 2017.
The purchase consideration paid on settlement of the acquisition was 63 million South African Rand (R) (~$6.5
million), of which R31.5 million (~$3.3 million) was paid in cash and R21.5 million (~$2.2 million) was paid by issue
of 94,321,464 Orion Minerals NL fully paid ordinary shares (Shares) (each Share having an attached unlisted Orion
Minerals NL option, exercisable at $0.0462 and expiring 29 March 2019) (~$1.0 million).
Shares issued to the Agama vendors are subject to a 6 month voluntary escrow period which ended on 29 September
2017 and 75% of the Shares issued to the vendors are subject to a 12-month voluntary escrow period ending
29 March 2018.
In addition, the Company provided finance for Agama to enable it to settle all historical shareholder loans to an
aggregate amount of approximately R33.3 million (~$3.4 million).
Earn-In Right - Jacomynspan Nickel-Copper-PGE Project (South Africa)
As referred to in the Operations section of this Report, on 14 July 2016, the Company announced that it had entered
into a binding term sheet to acquire the earn-in rights over the Jacomynspan Project from two companies, Namaqua
Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd (Companies), which hold partly overlapping prospecting rights and
mining right applications.
The Company’s earn-in right will be via a South African-registered special-purpose vehicle (Orion SPV), which will be
established by the Company as its vehicle for investment in the joint ventures and of which historically-disadvantaged
South African (HDSA) shall hold a minimum of 26% of the issued shares. Key terms of the transaction are set out
below:
• Orion SPV has the exclusive opportunity to earn up to an 80% interest (the Company 59.2%) in the Companies.
The Companies are privately owned South African companies with 26% or greater HDSA ownership.
• Conditions precedent to the commencement of earn in rights (Earn-In Commencement Date) include:
− Due diligence to be conducted by the Company;
− the Company providing the Companies with an initial exploration program to be carried out for the first 6
month period following the Earn-In Commencement Date (Initial Program);
− The Companies obtaining all necessary approvals for the Company to access the Jacomynspan Project and
conduct exploration activities including the Initial Program;
− the Company providing proof of financial capacity to execute the Initial Program; and
• The parties entering into a comprehensive earn-in agreement.
Orion Minerals Annual Report 2017 24
REVIEW OF OPERATIONS CONTINUED
• Orion SPV is able to earn an initial interest of 25% (the Company 18.5%) in the Companies via staged expenditure
of US$0.5 million on the Jacomynspan Project over the 12 months from the Earn In Commencement Date (First
Earn In Right) including:
− Expenditure commitment of US$0.25 million in the first 6 months; and
− A further $0.25 million must be spent within 12 months of the Earn-In Commencement Date (US$0.5
million in total expenditure).
• Once Orion SPV has earnt the initial 25% interest:
− The Companies will issue the Company with fully paid ordinary shares in the Companies which shall result in
Orion SPV being the holder of 25% of the total shares on issue immediately following such issue of shares;
− The Companies will record a shareholder loan account in favour of Orion SPV to the value of the First Earn
In Right expenditure incurred by the Company and shall continue to record further expenditure by the Orion
SPV as an increase in the shareholder loan account (Orion Loan);
− the Company can elect to increase its interest via further expenditure, as detailed below, or maintain its 25%
interest by contributing pro-rata to exploration; and
− Within 30 days, the parties will negotiate the terms of a shareholders agreement to govern the terms of
relationship between the shareholders.
• Following the First Earn-in Right, should the Company elect to increase its interest via further expenditure, the
Orion SPV can earn a further 25% interest (making its total interest 50% (the Company 37%)) by expending a
further US$1 million on the Jacomynspan Project (US$1.5 million total expenditure) over a further 12 months (2
years from Earn-In Commencement Date) (Second Earn In Right).
• Once Orion SPV has earnt a 50% interest:
− The Companies will issue the Company with shares which shall result in Orion SPV being the holder of 50%
of the total shares on issue immediately following such issue of shares; and
− the Company can elect to increase its interest via further expenditure, as detailed below, or maintain its 50%
interest by contributing pro-rata to exploration.
• Following the Second Earn in Right, should the Company elect to increase its interest via further expenditure,
Orion SPV can earn a further 30% interest (making its total interest 80% (the Company 59.2%)) by:
− Expending a further US$0.5 million on the Jacomynspan Project (US$2 million total expenditure) over a
further 12 months (3 years from Earn In Commencement Date);
− Completing a bankable feasibility study, which has been reviewed and signed off by an independent external
expert; and
− Providing or securing project finance terms to develop a mining operation within the Project Area as per the
bankable feasibility study and which shall not result in any Shareholder dilution.
• On the Earn-In Commencement Date, the Company will be appointed as the operator and manager of the joint
ventures and will have the right to appoint a minimum of one director to the boards of the Companies.
• The Companies shareholders on the date of execution of the Term Sheet (Signature Date) shall be entitled
to a 2% royalty in proportion to their beneficial interest in the Companies at the Signature Date, on net smelter
returns arising from the production and sale of metals from the Jacomynspan Project’s SAMREC resource as at
the Signature Date (Royalty). At any time following the Earn-In Commencement Date, the Company shall have
the right at its sole discretion to buy out the Royalty for an aggregate value of US$2 million.
• As noted above, all expenditure by the Company shall be advanced to the Companies as an Orion Loan. In
addition to the Orion Loan, the Companies have existing shareholder loans of R78.5 million (~US$5.4 million)
as at the Signature Date (together Shareholder Loans). Following the completion of the First Stage Earn In,
the parties will negotiate the terms of a Shareholders Loan to govern the terms of the Shareholder Loans. The
Shareholder Loan agreement will contain clauses normally contemplated by a formal agreement negotiated in
good faith between the parties.
Orion Minerals Annual Report 2017 25
Should the Company fail to meet its earn in right commitments, then either the parties will re-negotiate the terms of
the Term Sheet or, if the parties are unable to agree those new terms, then the Company will relinquish its rights to
earn any further interest in the Companies and the Term Sheet will be at an end.
Following year end, in September 2017, the Company entered into a binding earn in agreement principally on the
same terms as the binding term sheet.
Option Agreement – Masiqhame (South Africa)
On 29 April 2016, the Company announced that it had executed a binding option agreement with Masiqhame for
the Company to earn up to a 73% interest in Masiqhame. Masiqhame holds prospecting rights over large, highly
prospective area located approximately 80km north of the Prieska Project. On 7 September 2016, the Company
announced that the terms of the option had been amended to enable the Company to commence exploration
activities including drilling and have the cost of this work program deducted from the consideration payable of R1.5
million (~$0.15 million) by the Company for 50% of Masiqhame shares on issue.
On 29 September 2016, the Company announced that it had exercised the option it holds with Masiqhame, for the
Company to acquire an initial 50% interest in Masiqhame.
Key terms of the binding option agreement (Term Sheet) are as follows:
•
the Company has the opportunity to earn up to a 73% interest in Masiqhame.
• Masiqhame is a privately owned South African company with 100% Historically Disadvantaged South African
ownership. Masiqhame is thus black economic empowerment (BEE) compliant from the outset and the Company
will earn in to an incorporated joint venture, partnering with a BEE partner via Masiqhame.
•
the Company held an exclusive option to undertake due diligence on the corporate entity and the prospecting
rights until no later than 30 September 2016 (Option), failing which the parties will be released from their
obligations under the Term Sheet. As noted above, the Company has exercised the Option.
• Upon exercise the Option:
− the Company will pay Masiqhame R1.5 million less all expenditure by the Company on the exploration
program currently underway, to invest in new fully paid Masiqhame shares (Masiqhame Shares). As a
result of exploration activities undertaken by the Company, the Company will not be required to make any
cash payment to Masiqhame upon Completion; and
− Masiqhame will issue the Company with Masiqhame Shares which shall result in the Company being the
holder of 50% of the total Masiqhame Shares on issue immediately following such issue of Masiqhame
Shares.
(Completion)
Upon Masiqhame obtaining all requisite regulatory approvals to the extent required, Completion will occur by no later
than 30 days following the exercise of the option.
• At Completion, the Company shall have the right to appoint the majority of directors to the board of Masiqhame
and shall be appointed manager and operator of the prospecting rights;
• Once the Company has earned the initial 50% interest in Masiqhame through the issue of Masiqhame Shares to
the Company, the Company can elect to increase its interest by a further 23% (to 73% in total) via:
− provision of a shareholder loan to Masiqhame (Loan) on the following terms:
-
-
-
-
The principal amount of the Loan shall be the R equivalent of $0.1 million in each 12 month period
commencing from the 12th month following Completion (Principal);
Proceeds from the Loan shall be used to progress exploration programs and feasibility study works;
The Loan interest rate shall be nil;
The Loan shall only be repaid from operating surplus from future operations of Masiqhame;
Orion Minerals Annual Report 2017
26
REVIEW OF OPERATIONS CONTINUED
-
In addition to the Principal, the Company may elect at its sole discretion to provide additional finance by
means of the Loan in order to progress exploration works and complete feasibility study works and if
applicable, apply for a mining right;
- Masiqhame shareholders as at the date of execution of the Term Sheet will be free carried until such
time that a mining right is granted; and
-
If the Company fails to advance the Principal in any 12 month period, Masiqhame may subject to notice
periods demand that all of the Masiqhame Shares held by the Company be transferred back to the
Masiqhame shareholders (excluding the Company) for nil consideration and remove the Company as
manager.
− finalisation of a feasibility study; and
− lodgement of an application for the grant of a mining right over some or all of the area of the prospecting
rights.
Following the above terms being satisfied, Masiqhame shall immediately issue further new Masiqhame Shares to
the Company which shall result in the Company being the holder of 73% of the total Masiqhame Shares on issue
immediately following such issue.
Fraser Range – Joint Venture with IGO
As referred to in the Operations section of this Report, on 10 March 2017, the Company announced that it had
secured the involvement of Independence Group NL (ASX: IGO) in the ongoing exploration and evaluation of its
Fraser Range Project, after entering into a landmark JVA with the leading mid-tier miner.
Under the terms of the JVA, IGO acquired 70% equity in the Company’s 100%-owned tenements (the Company
retains 30%) and 60 - 65% equity in various joint venture tenements (i.e. joint ventures between the Company and
other parties in existence at the time of the Company entering into the JVA) (the Company retains 10% - 15%), in
exchange for a $0.7 million cash payment and subscribing for a $1.3 million placement in the Company at $0.024
per Share.
Importantly, the Company will maintain an exposure to the ongoing exploration and development of the Fraser Range
Project without additional financial commitment, given that it will be free-carried through to the first pre-feasibility
study (PFS) on any of the tenements.
The key terms of the JVA are as follows:
•
•
•
•
IGO initially acquired 70% equity in the Company’s 100% owned tenements, 60% in the Creasy JV tenements
(being tenements the subject of a joint venture between entities controlled by Mark Creasy and the Company)
and 65% in the GR JV tenement (being a tenement the subject of a joint venture between Geological Resources
Pty Ltd and the Company);
in consideration for the above, IGO paid the Company $0.7 million cash and subscribed for 54,166,666 Shares
at $0.024 per Share for total subscription fees of $1.3 million (Consideration Shares);
IGO will have the right to top-up its equity in the joint ventures through the payment of cash or shares; and
the Company will be free carried through to completion of a PFS on any of the tenements comprising the Fraser
Range Project.
On 14 March 2017, the Company announced that it had received $2.0 million from IGO (comprising the cash
consideration of $0.7 million and the subscription amount for the Consideration Shares of $1.3 million) and that it
had issued the 54,166,666 Consideration Shares to IGO.
Tembo Capital
On 12 April 2017, the Company announced that it had taken another important step in its base metal development
strategy in South Africa after entering into an agreement (Placement Agreement) with leading mining-focused
private equity group, Tembo Capital Mining Fund II LP (Tembo), which contemplated that Tembo would acquire
Orion Minerals Annual Report 2017 27
a cornerstone stake in the Company and a strategic relationship would be formed between the two groups. The
Placement Agreement provided for Tembo to subscribe for Shares at an issue price of $0.024 per Share up to a
maximum of $4.7 million which would give Tembo a 19.9% holding in the Company, subject to the satisfaction of
certain conditions including due diligence on the Company to Tembo’s satisfaction (including with respect to the
Company’s operating budget and financing plan) and the Company’s shareholders approving the Placement. The
Placement formed part of a proposed placement, approved by Shareholders at a general meeting of shareholders
held on 17 May 2017, of a maximum of 200,000,000 Shares to Tembo (or its nominees) and/or sophisticated and
professional investors at an issue price of $0.024 per Share, to raise a maximum of $4.8 million no later than 17
August 2017.
In June 2017, Tembo confirmed completion of satisfactory due diligence and nominated that it would subscribe for
125,000,000 Shares in the Placement at an issue price of $0.024 per Share raising $3 million.
The Placement Agreement contemplated the formation of a strategic relationship between the Company and Tembo.
As part of this, the Company announced on 17 May 2017 that the ASX has granted the Company a waiver from
listing rule 6.18 to enable the Company to provide an anti-dilution right to Tembo should the Placement to Tembo
proceed. Under the terms of the waiver, for so long as Tembo holds at least 12.5% of the Company’s Shares on
issue, Tembo will be granted an anti-dilution right to maintain its percentage holding in the Company if the Company
conducts an equity capital raising by way of the issue of equity securities.
Following year end, on 18 August 2017, the Company announced that it had entered into an agreement with Tembo
whereby Tembo would subscribe for a further 73,000,000 Shares in the Placement to raise $1.75 million at an issue
price of $0.024 per Share.
In addition to the Placement, a $6 million bridge loan facility was agreed with Tembo (Bridge Loan Agreement).
Under the terms of the Bridge Loan Agreement, the Company has agreed that it will use its best endeavours to
undertake a capital raising by 15 December 2017, to raise additional equity to progress the Prieska Project BFS
and to continue its South African exploration programs. The Company has also agreed that Tembo will be offered
the opportunity to participate in the sub-underwriting of any rights issue on standard market terms and conditions.
Tembo’s agreement to the Placement and the Bridge Loan Agreement follows its decision to become a cornerstone
shareholder in the Company to facilitate the acquisition of the Prieska Project via its initial $3 million investment in
the Company by way of Convertible Notes issued as part of the Convertible Notes issued in March 2017, as referred
to below.
The Placement Agreement also sets out the key terms of the strategic relationship between the Company and
Tembo. Following the completion of the Placement:
•
the Company will have access to Tembo’s strategic and financing networks within emerging markets, which
access will cease on Tembo ceasing to hold at least 12.5% of the Company’s issued Shares;
• Tembo will have access to certain information about the Company and its assets, subject to the Company’s
confidentiality and disclosure obligations, which access will cease on Tembo ceasing to hold at least 12.5% of
the Company’s issued Shares;
•
•
•
for so long as Tembo holds at least 12.5% of the Company’s issued Shares, Tembo will be granted an anti-
dilution right to maintain its percentage holding in the Company if the Company conducts an equity capital raising
by way of the issue of equity securities;
the Company will use best endeavours to undertake a rights issue to raise additional equity as soon as reasonably
practicable (see above); and
for so long as Tembo holds at least 12.5% of the issued Shares, the Company agrees to procure that the Board
consults with Tembo in respect of any proposed changes to its key management personnel, provided that any
Executive Director must not participate in any discussions in relation to him or her.
Orion Minerals Annual Report 2017 28
REVIEW OF OPERATIONS CONTINUED
Change of Company Name
With the change in focus for the Company, the Directors considered that it was appropriate for the Company to adopt
a new name which is more reflective of its future direction. At a general meeting of Shareholders, held 17 May 2017,
approval was received to change the name of the Company to “Orion Minerals NL”.
Following receipt of the approval to change name, the Australian and Securities Investment Commission accepted
the change of name the same day, the ASX officially reflected the change prior to commencement of trade on 23
May 2017, with no change to the Company’s stock code, ORN.
Capital Raisings
1. Convertible Notes
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 to raise up to $8 million through the issue of up
to 307,692,308 convertible notes, 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, raising $6.05 million. Key terms of the Convertible Notes are set out in the
Company’s 8 March 2017 ASX release.
Proceeds received from the Convertible Notes issue were used to complete the purchase of 100% of the issued
capital of Agama and to otherwise provide working capital to the Company.
2. Placements
• On 16 September 2016, the Company issued 9,100,000 Shares at an issue price of $0.025 per Share to raise
$0.23 million by way of placement to Eastern Goldfields Limited.
• On 14 November 2016, the Company issued 72,222,221 Shares at $0.018 per Share to raise $1.3 million. The
issue of these Shares to sophisticated and professional investors was approved by the Company’s shareholders
at the Company’s General Meeting held on 14 December 2016.
• On 23 December 2016, the Company issued 57,016,664 Shares at $0.018 per Share to raise $1.0 million. The
issue of 55,555,553 Shares to sophisticated and professional investors was approved by shareholders at the
Company’s General Meeting held on 14 December 2016 and 1,461,111 Shares were issued to a sophisticated
and professional investor within the 15% capacity for issues of equity securities without shareholder approval
afforded by ASX Listing Rule 7.1.
• On 14 March 2017, the Company announced that it had received $2.0 million from IGO (comprising the cash
consideration of $0.7 million and the subscription amount for the Consideration Shares of $1.3 million) and that
it had issued the 54,166,666 Consideration Shares to IGO.
• On 29 March 2017, the Company issued 94,321,464 Shares at $0.023 per Share to the vendors of Agama.
As the issue of these Shares formed part of the acquisition purchase price, no cash was received. Each Share
also has attached an unlisted Orion option, exercisable at $0.0462 and expiring 29 March 2019.
• On 9 June 2017, the Company issued 125,000,000 Shares at $0.024 per Share to Tembo (or nominee) to
raise $3.0 million. At the May 2017 shareholder meeting, the Company obtained approval for the issue of up
to 200,000,000 Shares at an issue price of $0.024 per Share to raise $4.0 million. On 31 May 2017, the
Company announced that Tembo had confirmed completion of satisfactory due diligence and had nominated to
subscribe for 125,000,000 Shares at an issue price of $0.024 per Share to raise $3.0 million, and following
year end, on 17 August 2007, subscribed for a further 73,000,000 Shares at $0.024 per Share to Tembo (or
nominee) to raise $1.75 million (total raised $4.75 million).
Orion Minerals Annual Report 2017 Orion Minerals NL
DIRECTORS’ REPORT
Directors’ Report
Annual Financial Report
29
Your directors submit their report for the year ended 30 June 2017.
BOARD OF DIRECTORS
Director
Designation Qualifications, experience & expertise
Non-
executive
Chairman
Denis
Waddell
Appointed
27 February
2009
ACA, FAICD
Mr Waddell is a Chartered Accountant with extensive
experience in the management of exploration and mining
companies. Mr Waddell 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, Mr Waddell
was the Finance Director of the Metana Minerals NL group.
During the past 35 years, Mr Waddell has gained
considerable experience
finance and
operations management of exploration and mining
companies.
in corporate
Directorships of other
listed companies
Tanami Gold NL
(former)
Other roles
held during
the year
Chairman of
Audit
Committee
Managing
Director
BSc(Hons) Geology (University of Witwatersrand)
NHD Economic Geology (Technikon Witwatersrand)
(PrSciNat)
None
Errol Smart
Appointed
26
November
2012
Chief
Executive
Officer
Member of
the Audit
Committee
the Australasian Code
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
for Reporting of
Exploration Results, Mineral Resources and Ore Reserves
(JORC) purposes. Mr Smart has more than 25 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
several boards of
executive
companies listed on both the TSX and ASX.
BSc (Hons) Geology (UWA), Grad Dip App Fin (FINSIA),
MAIG, MAusIMM
roles have been on
Mr Oliver is a geologist with over 16 years’ experience in
the international resources industry working for both major
and junior companies. Mr Oliver has had wide-ranging
exploration experience with considerable success and has
expertise in project identification and acquisition. Mr
Oliver has led exploration teams in Europe and Australia,
including
Iberian
Resources, BC Iron and Bellamel Mining, and most recently
was the Managing Director of Signature Metals.
roles with Harmony Gold,
senior
Non-
executive
Director
William
Oliver
Appointed
7 April 2014
Celsius Coal Ltd
(ongoing)
Minbos Resources
Ltd
(ongoing)
Chief
Operating
Officer
Non-
executive
Director
Alexander
Haller
Appointed
27 February
2009
BSc (Economics)
Mr Haller is a partner of Zachary Capital Management,
providing advisory services to a number of private
investment companies,
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.
including Silja
UMS Limited
(ongoing)
Shaft Sinkers PLC
(former)
Member of
the Audit
Committee
2
Orion Minerals Annual Report 2017
30
Orion Minerals NL
Directors’ Report (continued)
COMPANY SECRETARY
Annual Financial Report
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
Experience and qualifications
Mr Martin
Bouwmeester
Company
Secretary
(Appointed 1 April
2016)
Mr Bouwmeester has over 20 years' experience in the mining industry and was Business
Development Manager, Chief Financial Officer and Company Secretary of
Perseverance Corporation Limited. Mr Bouwmeester was 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 3 million 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
Company. Mr Bouwmeester is a FCPA.
CORPORATE STRUCTURE
Orion Minerals NL (Orion or Company) is a no liability company 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 and evaluation of the South African
Areachap Zinc-Copper and Gold Project, the Connors Arc Epithermal Gold Project in central Queensland, the
Fraser Range Nickel-Copper and Gold Project in Western Australia and the Walhalla Polymetals Project in
Victoria. There were no significant changes in the nature of the Group’s principal activities during the year.
OPERATING AND FINANCIAL REVIEW
Operations
During the financial year the Company acquired Agama Exploration & Mining (Pty) Ltd (Agama), a South
African registered company, which, through its subsidiary companies, holds an effective 73.33% interest in a
portfolio of projects including an advanced volcanic massive sulphide zinc-copper exploration project with
near-term production potential at the Prieska Zinc-Copper Project, located near Copperton in the Northern
Cape province of South Africa (Prieska Project), and the Marydale Prospecting Right, a virgin gold discovery
of possible epithermal origin, located 60km from the Prieska Project (Marydale Project). Exploration also
continued at the Company’s Queensland and Western Australian Projects, culminating in a joint venture
agreement being entered into over the Fraser Range Project in Western Australia.
Areachap Zinc-Copper and Gold Project – South Africa
The Company completed the acquisition of the Prieska Project and Marydale Project in South Africa from
Agama on 29 March 2017, a key element in the Company’s strategic move to become a base metal
developer. In addition to the acquisition of the Prieska Project and Marydale Project, the Company has
entered into options and earn-in rights agreements over a large area in the highly prospective Areachap belt,
Northern Cape Province of South Africa. This has secured an outstanding growth and diversification
opportunity for the Company.
3
Orion Minerals Annual Report 2017 Orion Minerals NL
Directors’ Report (continued)
1. Prieska Zinc-Copper Project
31
Annual Financial Report
In July 2015, the Company signed a binding term sheet giving the Company the right to acquire Agama.
During the option period, the Company undertook comprehensive due diligence on the Prieska Project. On 3
January 2017, the Company announced that it had exercised its option to acquire Agama, the owners of a
73.33% beneficial interest in the Prieska Project, completing the acquisition on 29 March 2017. The Prieska
Project covers unmined dip and strike extensions from historical underground mining, with the zinc-copper
mineralisation having been delineated by extensive drilling and geophysics by previous owners.
The current focus is on fast tracking the Prieska Project to production. A Bankable Feasibility Study (BFS)
commenced in July 2017, with lead consultants appointed for these studies, along with the Environmental
Impact Assessment (EIA) studies. The BFS and EIA work programs will be undertaken in parallel with the current
activities (resource drilling, underground inspections and establishment of activities), taking advantage of the
substantial historical database from mining and processing at the Prieska Project.
Underground access has been re-established, allowing assessment of geotechnical conditions and the
substantial remaining underground infrastructure. Ground conditions and infrastructure in the underground
mine to date have been found to generally be in a better state than was expected. Orion is confident that
mine refurbishment will not require substantial engineering effort. Power and vehicle access has now been
gained to the 105 Level.
The Company undertook two major phases of drilling at the Prieska Project during the reporting period:
A) +105 Level Target (Open Pit):
The surface and underground drilling programs at the +105 Level Target were designed to confirm, in-fill and
extend near-surface historical drilling, targeting mineralisation expected to be amenable to open pit mining.
Surface drilling carried out in the 12 months from June 2016 highlighted the potential for a high grade open pit
project to commence the restart of Prieska in parallel with the development of the larger Deep Sulphide
Target. Significantly a zone of “supergene sulphide” mineralisation was discovered via surface drilling, being a
zone of high grade primary sulphide mineralisation occurring within the +105 Level Target which is expected to
be amenable to processing via a similar flowsheet to the primary sulphide mineralisation previously mined and
processed elsewhere in the project.
The surface drilling program comprised 20 reverse circulation holes for 1297m and 14 diamond core holes for
1900.71m. All significant intersections from surface have been included in ASX releases of 25 July 2016, 22
August 2016, 14 September 2016, 2 November 2016, 7 December 2016, 16 December 2016 and 25 May 2017
with best results including:
•
•
•
•
•
•
•
•
22m at 10.8% Zn, 1.38% Cu and 0.3g/t Au from 57m, including:
7m at 17.8% Zn and 1.41% Cu (OCOR016);
20m at 8.58% Zn, 2.21% Cu and 0.3g/t Au from 48m, including:
17m at 9.98% Zn and 2.01% Cu (OCOR023);
42m at 4.41% Zn, 2.36% Cu and 0.42g/t Au from 55m, including:
5m at 9.28% Cu from 55m and 6m at 12.4% Zn from 75m (OCOR027);
9.3m at 4.0% Zn, 1.4% Cu, 0.13g/t Au and 9.0g/t Ag from 170m (OCOD033);
29.4m at 3.06% Zn + 1.52% Cu, 0.36g/t Au and 9.0g/t Ag from 112.6m, including:
8.5m at 4.33% Zn + 2.17% Cu from 115m and 3m at 7.13% Zn from 139m (OCOD036);
12m at 4.14% Cu, 1.89% Zn and 0.29g/t Au from 57m, including:
3m at 7.4% Cu and 4.34% Zn (OCOR017);
11.53m at 3.23% Zn, 0.97% Cu, and 0.22g/t Au from 189.22m, including:
3.34m at 5.26% Zn, 1.51% Cu and 0.36g/t Au (OCOD043); and
20.6m at 1.36% Zn, 0.63% Cu, and 0.1g/t Au from 156.1m, including:
2.6m at 5.2% Zn (OCOD035).
4
Orion Minerals Annual Report 2017 32
Orion Minerals NL
Directors’ Report (continued)
Annual Financial Report
Underground inspection of ore drives and draw points on the 105 Level by Orion’s geological and mining
team (ASX release 29 June 2017) demonstrated an extremely competent hanging wall at the 910m ore drive.
The combination of the observed supportive underground conditions and increased geotechnical data for
review have provided encouragement for additional strike extension of the +105 Level Target area.
Accordingly, underground drilling has recently commenced aimed at infilling and extending the supergene
mineralisation drilled from surface. First results from underground drilling have included high grade copper
results reported from both OCOU073 and OCOU075 (refer ASX releases 5 August 2017 and 19 September
2017).
B) Deep Sulphide Target (Underground):
In May 2017, the Company commenced a major drilling program designed to evaluate the main Deep
Sulphide Target below the historical mine, which is expected to form the cornerstone of the Company’s
development strategy. Drilling aims to systematically test and confirm the mineralisation as interpreted from
the extensive historical drilling data. Results are anticipated to provide statistical validation of this drilling,
which intersected unmined mineralised zones, and add to infill data so that the resultant data spacing meets
the requirements for a JORC compliant Mineral Resource estimate.
The Company’s first two drill holes testing the Deep Sulphide Target (OCOD048 and OCOD052) successfully
intersected massive sulphides and maiden assay results have now been received as follows (refer ASX releases
17 July 2017, 27 July 2017, 5 August 2017 and 19 September 2017):
•
•
•
•
•
•
•
•
•
22.45 m at 5.33% Zn, 1.34% Cu, 0.26g/t Au and 10.60g/t Ag from 1060m, including:
5.7m at 10.89% Zn from 1060.8m (OCOD048);
19.10m at 3.38% Zn, 1.58% Cu, 0.39g/t Au and 19.1g/t Ag from 1070.59m; and
2.35m at 3.50% Zn, 0.56% Cu, 0.09g/t Au and 2.35% Ag from 1064.00m (OCOD048_D2, a deflection
from parent OCOD048);
16.15 m at 3.30% Zn, 1.72% Cu, 0.26g/t Au and 13.72g/t Ag from 1116m, including:
4m at 5.34% Zn from 1119m (OCOD052)
15.92m at 5.55% Zn, 0.95% Cu, 0.22g/t Au and 7.5g/t Ag from 1117.59m (OCOD052_D2, a deflection
from parent OCOD052);
7.25m at 5.07% Zn, 1.09% Cu, 0.22g/t Au and 7.22g/t Ag from 1022.20m (OCOD065);
11.74m at 3.34% Zn, 1.22% Cu, 0.18g/t Au and 9.8g/t Ag from 1026.20m (OCOD054);
0.68m at 5.45% Zn, 0.09% Cu, 0.08g/t Au and 14.0g/t Ag from 1003.43m and
1.00m at 4.50% Zn, 0.07% Cu, 0.08g/t Au and 9.0g/t Ag from 1010.89m (OCOD059);
0.63m at 2.61% Zn, 5.39% Cu, 0.91g/t Au and 38g/t Ag from 1126.15m (OCOD066);
2.90m at 3.51% Zn, 0.74% Cu, 0.21g/t Au and 11.3g/t Ag from 1124.7m (OCOD062); and
3.00m at 2.41% Zn, 0.43% Cu, 0.16g/t Au and 5.3g/t Ag from 1045.0m (OCOD063).
The intersections in OCOD048, OCOD048_D2, OCOD054 and OCOD065 successfully validate historical drilling
intersections and are therefore important results in verifying historic results for use in future Mineral Resource
estimations (as defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves (JORC Code)). The intersections in OCOD052, OCOD052_D2, OCOD059, OCOD062, OCOD063
and OCOD066 represent an extension to the mineralisation previously confirmed by drilling at the Deep
Sulphide Target and the results from these holes, as well as the presence of massive sulphides and with wide
zones of alteration, is considered encouraging.
Drilling continues with nine holes in progress (six with active diamond core drilling and a further three holes with
pre collars completed). In addition, downhole EM surveying has been completed on a number of holes, in
parallel with a surface EM survey, providing additional targets for drill testing.
2. Marydale Project
The Marydale Project is a virgin gold-copper discovery located 60km north west of the Prieska Project. The
Company completed 4 holes for 1,464m testing a semi-continuous, arcuate chargeability anomaly extending
some 1.7km from the previously drilled NW Quadrant area, which was mapped by the Company’s high-
powered 3D induced polarisation (IP) survey. Drilling intersected several zones of disseminated sulphides, a
number of which returned anomalous levels of copper and gold in assays.
5
Orion Minerals Annual Report 2017 Orion Minerals NL
33
Annual Financial Report
Directors’ Report (continued)
3. Jacomynspan Project (Namaqua-Disawell Tenure)
During the year, the Company continued an extensive compilation and review process of data relating to the
Namaqua – Disawell Tenure. A substantial amount of pre-digital data exists from exploration pre 2000 by
(amongst others) Anglo American/AAPS, Phelps Dodge, Anglovaal and Iscor (now Kumba).
The Jacomynspan Project area contains numerous known occurrences of volcanogenic hosted massive
sulphide (VHMS) style zinc-copper deposits and is highly prospective for magmatic hosted nickel-copper
mineralisation similar to that seen in Proterozoic mobile belts worldwide including the Thompsons Belt in
Canada and the Albany-Fraser Belt in Western Australia. A number of mafic-ultramafic intrusions have been
recognised within the project area, with most historical work focusing on the Jacomynspan Deposit.
Orion believes a substantial exploration opportunity exists within the project area to search for higher grade,
massive and semi-massive accumulations of nickel-bearing sulphides, analogous to the Nova-Bollinger deposit
in the Fraser Range Province of Western Australia. For further information, refer to this Corporate Section of the
Directors’ Report.
4. Kantienpan Deposit (Masiqhame Tenure)
The Kantienpan Deposit lies within a substantial prospecting right owned by Masiqhame Trading 855 Pty Ltd
(Masiqhame). Orion has completed work and exercised its option to acquire a 50% interest (subject
toregulatory approval) and under the option agreement can earn up to a 73% interest.
During the year, the Company completed a high powered fixed loop ground electromagnetic surveys
(HP_FLEM) (refer ASX release 4 October 2016). This survey detected a strong, late channel conductor (the KN1
conductor) distinct from that tested by historical drilling.
Orion completed 3 diamond drill holes for 1347.5m as a first test of the KN1 conductor, confirming that the KN1
conductor is a result of massive and disseminated sulphide mineralisation. Assay results included 2.05m at
9.93% Zn + 0.09% Cu from 404.87m in OKND016 (refer ASX release 25 January 2017 and 25 May 2017).
Downhole EM surveys were completed on all holes to assist targetting of follow up drilling. In addition, the
Company completed 2 RC holes for 213m at the southern end of the deposit with a significant result of 7m at
6.45% Zn and 0.43% Cu from 60m returned in OKNR014.
For further information, refer to the Corporate Section of this Directors’ Report.
Connors Arc Project – Queensland
During the year, the Company carried out limited exploration on its extensive landholdings in the Connors Arc
in Queensland. Field work comprised further geological reconnaissance and preparation for drilling planned
at the 6 Mile Creek and Killarney Prospects and to follow up results from the Chough Prospect, including an
Aboriginal Heritage Survey.
Fraser Range Project – Western Australia
On 10 March 2017, the Company announced that it had secured the involvement of Independence Group
NL (ASX: IGO), the owner of the Nova Bollinger Mine, in the ongoing exploration and evaluation of its highly
prospective tenement package in the Fraser Range region of Western Australia (Fraser Range Project), after
entering into a landmark joint venture agreement (JVA) with the leading mid-tier miner.
The JVA over the Fraser Range Project is funded to the completion of pre-feasibility by IGO. The Fraser Range
Project consists of a substantial tenement holding in the Albany-Fraser Belt, which hosts Australia’s two most
significant discoveries of the last decade (the Tropicana Gold Deposit and the Nova Nickel-Copper-Cobalt
Deposit).
For further information, refer to the Corporate Section of this Directors’ Report.
6
Orion Minerals Annual Report 2017 34
Orion Minerals NL
Directors’ Report (continued)
Walhalla Gold & Polymetals Project (Victoria)
Annual Financial Report
During the year, the Company did not carry out any exploration activity on the Walhalla Project. As
announced by the Company, Centennial Mining Limited (formerly A1 Consolidated Gold Limited) (Centennial
Mining) is acquiring the Company’s Walhalla Project mining licence 5487 (Licence). As at reporting date, the
acquisition of the Licence is still proceeding through Victorian Government Department of Economic
Development, Jobs, Transport and Resources requirements.
The Company retains its mineral rights across all other licences held within the Walhalla Project area, which
are prospective for gold, copper – nickel and platinum group elements.
Corporate
Acquisition of the Prieska Project and Marydale Project (South Africa)
On 29 March 2017, the Company completed the acquisition of Agama, an unlisted South African registered
company. Following the acquisition, through its subsidiary companies, Orion now holds an effective 73.33%
interest in the Prieska Project, located at Copperton, Northern Cape Province, South Africa and the Marydale
Project, located 60km from the Prieska Project.
Prior to the acquisition of Agama, in July 2015, the Company announced the signing of a binding term sheet
giving Orion the right to acquire Agama. During the option period, Orion undertook comprehensive due
diligence including conducting exploration programs at both the Prieska Project and Marydale Project,
leading to the exercise of the option by the Company as announced to the ASX on 3 January 2017.
The purchase consideration paid on settlement of the acquisition was 63 million South African Rand (R) (~$6.5
million), of which R31.5 million (~$3.3 million) was paid in cash and R21.5 million (~$2.2 million) was paid by
issue of 94,321,464 Orion fully paid ordinary shares (Shares) (each Share having an attached unlisted Orion
option, exercisable at $0.0462 and expiring 29 March 2019) (~$1.0 million).
Shares issued to the Agama vendors are subject to a 6 month voluntary escrow period ending 29 September
2017 and 75% of the Shares issued to the vendors are subject to a 12-month voluntary escrow period ending
29 March 2018.
In addition, Orion provided finance for Agama to enable it to settle all historical shareholder loans to an
aggregate amount of approximately R33.3 million (~$3.4 million).
Earn-In Right - Jacomynspan Nickel-Copper-PGE Project (South Africa)
On 14 July 2016, the Company announced that it had entered into a binding term sheet to acquire the earn-
in rights over the Jacomynspan Project from two companies, Namaqua Nickel Mining (Pty) Ltd and Disawell
(Pty) Ltd (Companies), which hold partly overlapping prospecting rights and mining right applications.
Orion’s earn-in right will be via a South African-registered special-purpose vehicle (SPV), which will be
established by the Company as its vehicle for investment in the joint ventures and of which historically-
disadvantaged South African (HDSA) shall hold a minimum of 26% of the issued shares. Key terms of the
transaction are set out below:
• Orion SPV has the exclusive opportunity to earn up to an 80% interest (Orion 59.2%) in the Companies.
The Companies are privately owned South African companies with 26% or greater HDSA ownership.
• Conditions precedent to the commencement of earn in rights (Earn-In Commencement Date)
include:
o Due diligence to be conducted by Orion;
o Orion providing the Companies with an initial exploration program to be carried out for the
first 6 month period following the Earn-In Commencement Date (Initial Program);
The Companies obtaining all necessary approvals for Orion to access the Jacomynspan
Project and conduct exploration activities including the Initial Program;
o
o Orion providing proof of financial capacity to execute the Initial Program; and
o
The parties entering into a comprehensive earn-in agreement.
7
Orion Minerals Annual Report 2017 Orion Minerals NL
Directors’ Report (continued)
35
Annual Financial Report
• Orion SPV is able to earn an initial interest of 25% (Orion 18.5%) in the Companies via staged
expenditure of US$0.5 million on the Jacomynspan Project over the 12 months from the Earn In
Commencement Date (First Earn In Right) including:
Expenditure commitment of US$0.25 million in the first 6 months; and
o
o A further $0.25 million must be spent within 12 months of the Earn-In Commencement Date
(US$0.5 million in total expenditure).
• Once Orion SPV has earnt the initial 25% interest:
o
The Companies will issue Orion with fully paid ordinary shares in the Companies which shall
result in Orion SPV being the holder of 25% of the total shares on issue immediately following
such issue of shares;
The Companies will record a shareholder loan account in favour of Orion SPV to the value of
the First Earn In Right expenditure incurred by Orion and shall continue to record further
expenditure by the Orion SPV as an increase in the shareholder loan account (Orion Loan);
o Orion can elect to increase its interest via further expenditure, as detailed below, or maintain
o
its 25% interest by contributing pro-rata to exploration; and
o Within 30 days, the parties will negotiate the terms of a shareholders agreement to govern
the terms of relationship between the shareholders.
•
Following the First Earn-in Right, should Orion elect to increase its interest via further expenditure, the
Orion SPV can earn a further 25% interest (making its total interest 50% (Orion 37%)) by expending a
further US$1 million on the Jacomynspan Project (US$1.5 million total expenditure) over a further 12
months (2 years from Earn-In Commencement Date) (Second Earn In Right).
• Once Orion SPV has earnt a 50% interest:
o
The Companies will issue Orion with shares which shall result in Orion SPV being the holder of
50% of the total shares on issue immediately following such issue of shares; and
o Orion can elect to increase its interest via further expenditure, as detailed below, or maintain
its 50% interest by contributing pro-rata to exploration.
•
Following the Second Earn in Right, should Orion elect to increase its interest via further expenditure,
Orion SPV can earn a further 30% interest (making its total interest 80% (Orion 59.2%)) by:
o
Expending a further US$0.5 million on the Jacomynspan Project (US$2 million total
expenditure) over a further 12 months (3 years from Earn In Commencement Date);
o Completing a bankable feasibility study, which has been reviewed and signed off by an
independent external expert; and
Providing or securing project finance terms to develop a mining operation within the Project
Area as per the bankable feasibility study and which shall not result in any Shareholder
dilution.
o
• On the Earn-In Commencement Date, Orion will be appointed as the operator and manager of the
joint ventures and will have the right to appoint a minimum of one director to the boards of the
Companies.
•
•
The Companies shareholders on the date of execution of the Term Sheet (Signature Date) shall be
entitled to a 2% royalty in proportion to their beneficial interest in the Companies at the Signature
Date, on net smelter returns arising from the production and sale of metals from the Jacomynspan
Project’s SAMREC resource as at the Signature Date (Royalty). At any time following the Earn-In
Commencement Date, Orion shall have the right at its sole discretion to buy out the Royalty for an
aggregate value of US$2 million.
As noted above, all expenditure by Orion shall be advanced to the Companies as an Orion Loan. In
addition to the Orion Loan, the Companies have existing shareholder loans of R78.5 million (~US$5.4
million) as at the Signature Date (together Shareholder Loans). Following the completion of the First
Stage Earn In, the parties will negotiate the terms of a Shareholders Loan to govern the terms of the
Shareholder Loans. The Shareholder Loan agreement will contain clauses normally contemplated by
a formal agreement negotiated in good faith between the parties.
8
Orion Minerals Annual Report 2017 36
Orion Minerals NL
Directors’ Report (continued)
Annual Financial Report
Should Orion fail to meet its earn in right commitments, then either the parties will re-negotiate the terms of the
Term Sheet or, if the parties are unable to agree those new terms, then Orion will relinquish its rights to earn
any further interest in the Companies and the Term Sheet will be at an end.
Following year end, in September 2017, the Company entered into a binding earn in agreement principally
on the same terms as the binding term sheet.
Option Agreement – Masiqhame (South Africa)
On 29 April 2016, the Company announced that it had executed a binding option agreement with
Masiqhame for Orion to earn up to a 73% interest in Masiqhame. Masiqhame holds prospecting rights over
large, highly prospective area located approximately 80km north of the Prieska Project. On 7 September
2016, the Company announced that the terms of the option had been amended to enable Orion to
commence exploration activities including drilling and have the cost of this work program deducted from the
consideration payable of R1,500,000 (~$150,000) by Orion for 50% of Masiqhame shares on issue.
On 29 September 2016, the Company announced that it had exercised the Option it holds with Masiqhame,
for Orion to acquire an initial 50% interest in Masiqhame.
Key terms of the amended binding term sheet (Term Sheet) are as follows:
• Orion has the opportunity to earn up to a 73% interest in Masiqhame.
• Masiqhame is a privately owned South African company with 100% Historically Disadvantaged South
African ownership. Masiqhame is thus black economic empowerment (BEE) compliant from the
outset and Orion will earn in to an incorporated joint venture, partnering with a BEE partner via
Masiqhame.
• Orion held an exclusive option to undertake due diligence on the corporate entity and the
prospecting rights until no later than 30 September 2016 (Option), failing which the parties will be
released from their obligations under the Term Sheet. As noted above, Orion has exercised the
Option.
•
Upon exercise the Option:
o Orion will pay Masiqhame R1.5 million less all expenditure by Orion on the exploration
program currently underway, to invest in new fully paid Masiqhame shares (Masiqhame
Shares). As a result of exploration activities undertaken by the Company, Orion will not be
required to make any cash payment to Masiqhame upon Completion; and
o Masiqhame will issue Orion with Masiqhame Shares which shall result in Orion being the holder
of 50% of the total Masiqhame Shares on issue immediately following such issue of
Masiqhame Shares.
(Completion)
Upon Masiqhame obtaining all requisite regulatory approvals to the extent required, Completion will
occur by no later than 30 days following the exercise of the Option.
•
At Completion, Orion shall have the right to appoint the majority of directors to the board of
Masiqhame and shall be appointed manager and operator of the prospecting rights;
• Once Orion has earned the initial 50% interest in Masiqhame through the issue of Masiqhame Shares
to Orion, Orion can elect to increase its interest by a further 23% (to 73% in total) via:
provision of a shareholder loan to Masiqhame (Loan) on the following terms:
§
o
§
§
§
§
The principal amount of the Loan shall be the R equivalent of $0.1 million in each 12
month period commencing from the 12th month following Completion (Principal);
Proceeds from the Loan shall be used to progress exploration programs and feasibility
study works;
The Loan interest rate shall be nil;
The Loan shall only be repaid from operating surplus from future operations of
Masiqhame;
In addition to the Principal, Orion may elect at its sole discretion to provide additional
finance by means of the Loan in order to progress exploration works and complete
feasibility study works and if applicable, apply for a mining right;
9
Orion Minerals Annual Report 2017 Orion Minerals NL
Directors’ Report (continued)
37
Annual Financial Report
§ Masiqhame shareholders as at the date of execution of the Term Sheet will be free
§
carried until such time that a mining right is granted; and
If Orion fails to advance the Principal in any 12 month period, Masiqhame may subject
to notice periods demand that all of the Masiqhame Shares held by Orion be transferred
back to the Masiqhame shareholders (excluding Orion) for nil consideration and remove
Orion as manager.
o
o
finalisation of a feasibility study; and
lodgement of an application for the grant of a mining right over some or all of the area of the
prospecting rights.
Following the above terms being satisfied, Masiqhame shall immediately issue further new Masiqhame Shares
to Orion which shall result in Orion being the holder of 73% of the total Masiqhame Shares on issue
immediately following such issue.
Fraser Range – Joint Venture with IGO
As referred to in the Review of Operations section of this Report, on 10 March 2017, the Company announced
that it had secured the involvement of Independence Group NL (ASX: IGO) in the ongoing exploration and
evaluation of its Fraser Range Project, after entering into a landmark JVA with the leading mid-tier miner.
Under the terms of the JVA, IGO acquired 70% equity in the Company’s 100%-owned tenements (Orion retains
30%) and 60 - 65% equity in various joint venture tenements (i.e. joint ventures between the Company and
other parties in existence at the time of the Company entering into the JVA) (Orion retains 10% - 15%), in
exchange for a $0.7 million cash payment and subscribing for a $1.3 million placement in Orion at $0.024 per
Share.
Importantly, Orion will maintain an exposure to the ongoing exploration and development of the Fraser Range
Project without additional financial commitment, given that it will be free-carried through to the first pre-
feasibility study (PFS) on any of the tenements.
The key terms of the JVA are as follows:
(a)
(b)
(c)
(d)
IGO initially acquired 70% equity in the Company’s 100% owned tenements, 60% in the Creasy JV
tenements (being tenements the subject of a joint venture between entities controlled by Mark
Creasy and the Company) and 65% in the GR JV tenement (being a tenement the subject of a joint
venture between Geological Resources Pty Ltd and the Company);
in consideration for the above, IGO paid the Company $0.7 million cash and subscribed for
54,166,666 Shares at $0.024 per Share for total subscription fees of $1.3 million (Consideration Shares);
IGO will have the right to top-up its equity in the joint ventures through the payment of cash or shares;
and
the Company will be free carried through to completion of a PFS on any of the tenements comprising
the Fraser Range Project.
On 14 March 2017, the Company announced that it had received $2.0 million from IGO (comprising the cash
consideration of $0.7 million and the subscription amount for the Consideration Shares of $1.3 million) and that
it had issued the 54,166,666 Consideration Shares to IGO.
Tembo Capital
On 12 April 2017, the Company announced that it had taken another important step in its base metal
development strategy in South Africa after entering into an agreement (Placement Agreement) with leading
mining-focused private equity group, Tembo Capital Mining Fund II LP (Tembo), which contemplated that
Tembo would acquire a cornerstone stake in the Company and a strategic relationship would be formed
between the two groups. The Placement Agreement provided for Tembo to subscribe for Shares at an issue
price of $0.024 per Share up to a maximum of $4.7 million which would give Tembo a 19.9% holding in the
Company, subject to the satisfaction of certain conditions including due diligence on the Company to
Tembo’s satisfaction (including with respect to the Company’s operating budget and financing plan) and the
Company’s shareholders approving the Placement. The Placement formed part of a proposed placement,
approved by Shareholders at a general meeting of shareholders held on 17 May 2017, of a maximum of
200,000,000 Shares to Tembo (or its nominees) and/or sophisticated and professional investors at an issue price
of $0.024 per Share, to raise a maximum of $4.8 million no later than 17 August 2017.
10
Orion Minerals Annual Report 2017 38
Orion Minerals NL
Directors’ Report (continued)
Annual Financial Report
In June 2017, Tembo confirmed completion of satisfactory due diligence and nominated that it would
subscribe for 125,000,000 Shares in the Placement at an issue price of $0.024 per Share raising $3 million.
The Placement Agreement contemplated the formation of a strategic relationship between Orion and
Tembo. As part of this, the Company announced on 17 May 2017 that the ASX has granted the Company a
waiver from listing rule 6.18 to enable the Company to provide an anti-dilution right to Tembo should the
Placement to Tembo proceed. Under the terms of the waiver, for so long as Tembo holds at least 12.5% of
Orion’s Shares on issue, Tembo will be granted an anti-dilution right to maintain its percentage holding in Orion
if Orion conducts an equity capital raising by way of the issue of equity securities.
Following year end, on 18 August 2017, the Company announced that it had entered into an agreement with
Tembo whereby Tembo would subscribe for a further 73,000,000 Shares in the Placement to raise $1.75 million
at an issue price of $0.024 per Share.
In addition to the Placement, a $6 million bridge loan facility was agreed with Tembo (Bridge Loan
Agreement). Under the terms of the Bridge Loan Agreement, Orion has agreed that it will use its best
endeavours to undertake a capital raising by 15 December 2017, to raise additional equity to progress the
Prieska Project BFS and to continue its South African exploration programs. The Company has also agreed
that Tembo will be offered the opportunity to participate in the sub-underwriting of any rights issue on
standard market terms and conditions. Refer to the Subsequent Events section for further detail.
Tembo’s agreement to the Placement and the Bridge Loan Agreement follows its decision to become a
cornerstone shareholder in Orion Minerals to facilitate the acquisition of the Prieska Project via its initial $3
million investment in the Company by way of Convertible Notes issued as part of the Convertible Notes issued
in March 2017, as referred to below.
The Placement Agreement also sets out the key terms of the strategic relationship between Orion and Tembo.
Following the completion of the Placement:
•
•
•
•
•
Orion will have access to Tembo’s strategic and financing networks within emerging markets, which
access will cease on Tembo ceasing to hold at least 12.5% of Orion’s issued Shares;
Tembo will have access to certain information about Orion and its assets, subject to Orion’s
confidentiality and disclosure obligations, which access will cease on Tembo ceasing to hold at least
12.5% of Orion’s issued Shares;
for so long as Tembo holds at least 12.5% of Orion’s issued Shares, Tembo will be granted an anti-
dilution right to maintain its percentage holding in Orion if Orion conducts an equity capital raising by
way of the issue of equity securities;
Orion will use best endeavours to undertake a rights issue to raise additional equity as soon as
reasonably practicable (see above); and
for so long as Tembo holds at least 12.5% of the issued Shares, Orion agrees to procure that the Board
consults with Tembo in respect of any proposed changes to its key management personnel, provided
that any Executive Director must not participate in any discussions in relation to him or her.
Change of Company Name
With the change in focus for the Company, the Directors considered that it was appropriate for the Company
to adopt a new name which is more reflective of its future direction. At a general meeting of Shareholders,
held 17 May 2017, approval was received to change the name of the Company to “Orion Minerals NL”.
Following receipt of the approval to change name, the Australian and Securities Investment Commission
accepted the change of name the same day, the ASX officially reflected the change prior to
commencement of trade on 23 May 2017, with no change to the Company’s stock code, ORN.
11
Orion Minerals Annual Report 2017 Orion Minerals NL
Directors’ Report (continued)
Capital Raisings and Loan Facilities
1. Convertible Notes
39
Annual Financial Report
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 to raise up to $8 million
through the issue of up to 307,692,308 convertible notes, 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, raising $6.05 million. Key terms of
the Convertible Notes are set out in the Company’s 8 March 2017 ASX release.
Proceeds received from the Convertible Notes issue were used to complete the purchase of 100% of the
issued capital of Agama and to otherwise provide working capital to the Company.
2.
Placements
• On 16 September 2016, the Company issued 9,100,000 Shares at an issue price of $0.025 per Share to
raise $0.23 million by way of placement to Eastern Goldfields Limited.
• On 14 November 2016, the Company issued 72,222,221 Shares at $0.018 per Share to raise $1.3 million.
The issue of these Shares to sophisticated and professional investors was approved by the Company’s
shareholders at the Company’s General Meeting held on 14 December 2016.
• On 23 December 2016, the Company issued 57,016,664 Shares at $0.018 per Share to raise $1.0 million.
The issue of 55,555,553 Shares to sophisticated and professional investors was approved by
shareholders at the Company's General Meeting held on 14 December 2016 and 1,461,111 Shares
were issued to a sophisticated and professional investor within the 15% capacity for issues of equity
securities without shareholder approval afforded by ASX Listing Rule 7.1.
• On 14 March 2017, the Company announced that it had received $2.0 million from IGO (comprising
the cash consideration of $0.7 million and the subscription amount for the Consideration Shares of
$1.3 million) and that it had issued the 54,166,666 Consideration Shares to IGO.
• On 29 March 2017, the Company issued 94,321,464 Shares at $0.023 per Share to the vendors of
Agama. As the issue of these Shares formed part of the acquisition purchase price, no cash was
received. Each Share also has attached an unlisted Orion option, exercisable at $0.0462 and expiring
29 March 2019.
• On 9 June 2017, the Company issued 125,000,000 Shares at $0.024 per Share to Tembo (or nominee)
to raise $3.0 million. At the May 2017 shareholder meeting, the Company obtained approval for the
issue of up to 200,000,000 Shares at an issue price of $0.024 per Share to raise $4.0 million. On 31 May
2017, the Company announced that Tembo had confirmed completion of satisfactory due diligence
and had nominated to subscribe for 125,000,000 Shares at an issue price of $0.024 per Share to raise
$3.0 million, and following year end, on 17 August 2007, subscribed for a further 73,000,000 Shares at
$0.024 per Share to Tembo (or nominee) to raise $1.75 million (total raised $4.75 million).
3.
Loan Facilities
On 31 October 2016, the Company announced that a $0.50 million loan facility had been agreed with
Tarney Holdings Pty Ltd (Tarney), a major shareholder of Orion and a company associated with Orion’s
Chairman, Mr Denis Waddell (Facility).
Under the terms of the Facility, Tarney could elect to convert cash drawn down under the Facility into
Orion Shares, subject to shareholder approval being sought at the Company’s Annual General Meeting
held on 30 November 2016 (Meeting Date).
12
Orion Minerals Annual Report 2017 40
Orion Minerals NL
Directors’ Report (continued)
Annual Financial Report
Any advances drawn down under the Facility could be convertible to new Shares at Tarney’s discretion
and at an issue price per Share which would be either:
•
If Shares were issued during the period between 21 October 2016 and the Meeting Date, the highest
price at which the Company issued Shares during this period, but at a price which is not less than
$0.02 per Share; or
If no Shares are issued during the period between 21 October 2016 and the Meeting Date, the
greater of:
•
o
o
the highest price at which the Company issued Shares following the Meeting Date and the day
prior to the date of issue of Shares to Tarney, but at a price which is not less than $0.02 per Share;
or
if no Shares were issued during the period between the Meeting Date and the date of the issue
of Shares to Tarney, 80% of the VWAP, which is at a discount not greater than 20% to the market
price of the Company's Shares over the last 5 days on which sales are recorded before the day
on which the Shares were issued.
A total of $0.45 million was drawn under the Facility and subsequently repaid to Tarney on 18 November
2016. The Facility expired on 31 December 2016 with a nil balance owing.
4.
Issue of Shares to Directors and Associates
• On 30 December 2016, the Company issued 25,000,000 Shares at $0.02 per Share to Orion’s
Chairman, Mr Denis Waddell (or nominee). The issue of these Shares was approved by the
Company’s shareholders at the Company’s Annual General Meeting held on 30 November 2016; and
• On 30 December 2016, the Company issued 5,555,555 Shares at $0.018 per Share to Directors of Orion
(or nominees) as approved by the Company’s shareholders at the Company’s General Meeting held
on 14 December 2016.
Investments
In the prior reporting period, the Company entered into transactions where it held investments in other entities.
As a result of these transactions, and as previously announced to the ASX, the Company continues to hold the
following, unlisted options in Eastern Goldfields Limited (ASX: EGS):
Number of options
1,000,000
1,000,000
Exercise Price
$0.168
$0.189
Expiry Date
8/03/2018
8/03/2020
Further, during the financial year, the Company divested all of its interest held in Centennial Mining (formerly
A1 Consolidated Gold Limited) and sold 7,816,285 A1 Gold Shares at an average price of $0.026 per share,
receiving $0.204 million from the sale.
Research and Development Tax Incentive
During the year, the Company received a Research and Development (R&D) Tax Incentive rebate from the
Australian Taxation Office of $0.39 million. For the year ended 30 June 2016, the Company incurred eligible
R&D expenditure from which the rebate was calculated.
For the year ended 30 June 2017, the Company did not incurr eligible R&D expenditure and as such, no
application for a R&D Tax Incentive rebate will be made.
Results of operations – the Group
The Group recorded a loss of $7,929,737 (2016: $2,528,188) after tax for the year. The result was affected
considerably by impairment of exploration assets of $1,616,905 (2016: $414,764) and exploration expenditure
incurred of $3,541,229 which, under the Group’s deferred exploration, evaluation and development policy,
did not qualify to be capitalised and was expensed. Net cash used in operating activities totalled $6,542,963
(2016: $2,252,847) and net cash used in investing activities totaled $4,127,692 (2016: $538,514). For the year,
the Group’s net cash used in exploration and evaluation activities was $5,119,805 (2016: $1,449,779). Cash on
hand at the end of the year was $3,405,252 (2016: $651,748).
13
Orion Minerals Annual Report 2017 Orion Minerals NL
Directors’ Report (continued)
41
Annual Financial Report
The Group continues to focus strongly on exploration within its Areachap Copper-Zinc and Gold Project (South
Africa), Connors Arc Epithermal Gold Project (Queensland), Fraser Range – Gold-Nickel-Copper Project
(Western Australia) and its Walhalla Polymetals Project (Victoria). A total of $5,070,442 (2016: $1,934,719) in
exploration expenditure was incurred during the year. The Group undertook a review of the carrying value of
each exploration area of interest. As a result, the carrying value of deferred exploration, evaluation and
development expenditure was written down by $1,616,905 due to analysis performed by management
indicating that the capitalised exploration on an area of interest will not be recoverable by the Company as
successful future development is not expected.
The basic loss per share for the Group for the year was 1.28 cents and diluted loss per share for the Group for
the year was 1.28 cents (2016: loss per share 0.68 cents and diluted loss per share 0.68 cents).
No dividend has been paid during or is recommended for the financial year ended 30 June 2017.
Business Strategies
The Company will continue to focus on exploration within its Areachap Zinc-Copper and Gold Project (South
Africa), Connors Arc Epithermal Gold Project (Queensland), Fraser Range – Gold-Nickel-Copper Project
(Western Australia) and its Walhalla Polymetals Project (Victoria).
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:
• Capital - Each of the Group’s key exploration targets remain in the exploration 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 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 and Native Title – One of the Group’s key projects, the Areachap Zinc-Copper and Gold
Project, is located in 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.
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.
These tenements are subject to periodic
review and compliance,
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;
14
Orion Minerals Annual Report 2017 42
Orion Minerals NL
Directors’ Report (continued)
Annual Financial Report
•
•
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; and
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.
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:
AASMF Loan
On 2 November 2015, Repli Trading No 27 (Pty) Ltd (Repli) (a subsidiary of the Company) and Anglo American
Sefa Mining Fund (AASMF) entered into a loan agreement for the further exploration and development of the
Prieska Project. Under the terms of the loan, AASMF shall advance R14.25 million to Repli. The key terms of the
agreement are as follows:
•
•
•
•
Loan amount R14.25 million;
Interest rate will be the prime lending rate in South Africa;
The disbursement of the loan will be subject to AASMF notifying Repli that it is satisfied with the results of
the updated scoping study;
Repayment date will be the earlier of 3 years from the date of the advance or on the date which Repli
raises any additional finance for the further development of the Prieska Project; and
• On the advancement of the loan, 29.17% of the shares held in Repli by the Agama group (a wholly
owned subsidiary of Orion), will be pledged as security to AASMF for the performance of Repli's
obligations in terms of the loan.
On 1 August 2017, Repli drew down on the available AASMF loan in full (~$1.350 million (R14.25 million)).
Bridge Loan Facility and Placement – Tembo
On 18 August 2017, the Company announced that it had issued 73,000,000 Shares at $0.024 per Share to raise
$1.752 million by way of placement to Tembo (or nominee) and that a $6.0 million bridge loan facility has
been agreed with Tembo (Bridge Loan Agreement).
Under the terms of Bridge Loan Agreement, Orion has agreed that it will use best endeavours to undertake a
capital raising by 15 December 2017, to raise additional equity to progress the Prieska Project BFS and to
continue its South African exploration programs. Orion has also agreed that Tembo will be offered the
opportunity to participate in the sub-underwriting of any rights issue on standard market terms and conditions.
The key terms of the Bridge Loan Agreement are:
•
•
•
Bridge Loan Amount - Up to $6.0 million, available in two $3.0 million tranches;
Interest - capitalised at 12% per annum accrued daily on the amount drawn down;
Repayment – repayable on the earlier of 15 December 2017 and the completion of a capital
raising(s) whether by way of a pro rata issue and/ or security purchase plan of Shares and/or a
placement or placements of Shares undertaken by the Company to raise such amount as is required,
in Tembo’s reasonable opinion, to progress the Prieska Project BFS, continue exploration programs at
the Company’s South African projects and for working capital (Equity Capital Raising);
15
Orion Minerals Annual Report 2017 Orion Minerals NL
43
Annual Financial Report
Directors’ Report (continued)
•
•
•
•
Equity Capital Raising - the Company will use its best endeavours to undertake an Equity Capital
Raising before 15 December 2017. Orion shall procure that Tembo (or its affiliate) is offered the right to
underwrite or sub-underwrite any pro rata issue and/or security purchase plan which form part of an
Equity Capital Raising, on standard market terms and conditions;
Set-off under Entitlement Offer – repayment of the Bridge Loan will be set off against the amount to
be paid by Tembo for the issue and allotment of Shares to Tembo under the Equity Capital Raising
and/or at Tembo’s election against the underwriting amount payable by Tembo in respect of any
shortfall under any ‘pro rata issue’ which form part of an Equity Capital Raising in its capacity as
underwriter or sub-underwriter. Any surplus amount owing by Tembo after the set-off will be paid by
Tembo in accordance with the terms of the relevant Equity Capital Raising and the underwriting
arrangements (as applicable);
Establishment fee - capitalised at 5% of the Bridge Loan facility amount; and
Security - the Bridge Loan is unsecured.
As at the date of this report, $3.0 million had been drawn down against the Bridge Loan.
Johannesburg Stock Exchange
On 18 September 2017, the secondary listing of the Company’s Shares on the main board of the
Johannesburg Stock Exchange (JSE) commenced. Orion’s secondary listing of its Shares is in the “Gold
Mining” sector, under the abbreviated name “ORIONMIN”, JSE share code “ORN” and ISIN “AU000000ORN1”.
The stock code is ORN. The Company’s primary listing remains on the ASX and the Company continues to be
regulated by the Australian Securities and Investment Commission (ASIC).
DIRECTORS’ MEETINGS
The number of meetings attended by each Director of the Company during the financial year was:
Board meetings
Audit committee meetings
Number held
and entitled to
attend
Number
attended
Number
held and entitled
to attend
Number
attended
39
39
39
39
39
39
39
39
2
2
---
2
2
2
---
2
Mr Denis Waddell
Mr Errol Smart
Mr William Oliver
Mr Alexander Haller
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:
Mr Denis Waddell
Mr Errol Smart
Mr William Oliver
Mr Alexander Haller (i)
Ordinary shares
92,541,324
19,542,666
6,582,199
69,119,937
Unlisted options over ordinary
shares
18,000,000
45,000,000
9,000,000
---
(i)
Mr Haller holds relevant interests as follows: Silja Investment Ltd 56,706,578 ordinary shares, Mr Haller
12,412,039 ordinary shares and Pershing Securities 1,320 ordinary shares.
16
Orion Minerals Annual Report 2017
44
Orion Minerals NL
Annual Financial Report
Directors’ Report (continued)
SHARE OPTIONS
Options granted to directors and executives of the Company
During or since the end of the financial year, the Company granted options for no consideration over
unissued ordinary shares in the Company to key management personnel as part of their remuneration. On
the 31 May 2017, the following unlisted options were granted under the Company’s Option & Performance
Rights Plan:
Expiry date
31 May 2022
31 May 2022
31 May 2022
Exercise price
$0.030
$0.045
$0.060
Number of options
6,000,000
6,000,000
6,000,000
REMUNERATION REPORT - AUDITED
Unissued shares under options and performance rights
At the date of this report unissued ordinary shares of the Company under option are:
Expiry date
30 April 2018
30 April 2018
30 April 2018
31 May 2018
31 May 2018
31 May 2018
29 March 2019
30 November 2019
30 November 2019
30 November 2020
30 November 2020
30 November 2020
31 May 2022
31 May 2022
31 May 2022
Exercise price
Number of ordinary shares
$0.15
$0.25
$0.35
$0.15
$0.25
$0.35
$0.046
$0.045
$0.06
$0.02
$0.035
$0.05
$0.03
$0.045
$0.06
1,000,000
1,000,000
1,000,000
9,000,000
9,000,000
9,000,000
94,321,464
250,000
250,000
18,333,333
18,333,333
18,333,334
12,300,000
12,300,000
12,300,000
216,721,464
Shares issued on exercise of options
There were no options exercised during or since the end of the financial year.
The Remuneration Report sets out remuneration information for Orion Minerals NL for the year ended 30 June
2017. The following were key management personnel 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 year
Mr Denis Waddell
Chairman – Non-
Executive
Chairman
Mr Errol Smart
Director – Executive
Managing Director & Chief Executive Officer
Mr William Oliver
Mr Alexander Haller
Mr Martin Bouwmeester
Mr Louw van Schalkwyk
(from 1 June 2017)
Mr Walter Shamu
(from 1 June 2017)
Ms Michelle Jenkins
(from 1 June 2017)
Director – Non-Executive
Director – Non-Executive Director
---
Technical Director & Chief Operating Officer
Chief Financial Officer & Company Secretary
---
---
---
17
Executive: Exploration (South Africa)
Executive: Mining & Development (South
Africa)
Executive: Finance & Administration (South
Africa)
Orion Minerals Annual Report 2017
Orion Minerals NL
45
Annual Financial Report
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
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.
The total level of remuneration for the financial year for all non-executive directors of $124,650 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.
2017
2016
2015
2014
2013
Net loss attributable to equity
holders of the Company
Dividends paid
Actual share price
$(7,929,737)
---
$(2,528,188)
---
$(3,362,961)
---
$(12,866,030)
---
$(8,515,184)
---
$0.025
$0.016
$0.023
$0.04
$0.04
18
Orion Minerals Annual Report 2017
46
Orion Minerals NL
Annual Financial Report
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
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.
A total of 36,900,000 options were granted during the year ended 30 June 2017 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 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.
Chief Financial Officer and Company Secretary
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.
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.
Executive: Mining & Development (South Africa)
Unlimited in term but capable of termination on 1 months’ notice. The Group retains the right to terminate the
contract immediately, by making a payment of 1 months’ remuneration in lieu of notice.
Executive: Finance & Administration (South Africa)
Unlimited in term but capable of termination on 1 months’ notice. The Group retains the right to terminate the
contract immediately, by making a payment of 1 months’ remuneration in lieu of notice.
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.
Prior to 1 January 2017, the Chairman received $37,500 per annum. 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 2016 Annual General Meeting
The 30 June 2016 Remuneration Report received positive shareholder support at the Company’s Annual
General Meeting with a positive vote of 89% in favour.
19
Orion Minerals Annual Report 2017 Orion Minerals NL
47
Annual Financial Report
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Directors and Executive Officers’ Remuneration – 2017
Primary salary, incentives, superannuation and
consultancy payments
Names
Year
Salary
and fees
$
Short term
incentives
$
Super-
annuation
$
Termination
benefits
$
Share based
payments
(v)
Options
Total
remuneration
% of
remuneration
in options
$
$
%
250,000
120,000
128,000
108,000
378,000
228,000
124,650
80,700
---
---
502,650
308,700
193,000
99,000
32,111
---
114,229
---
132,668
---
472,008
Directors
Executive Directors
Mr E Smart(i)
Mr W Oliver (ii)
Sub-total
executive
Directors
2017
2016
2017
2016
2017
2016
Non-executive Directors
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
Mr D Waddell
(iii)
Mr A Haller
(iv)
Total directors
remuneration
Executives
Mr M
Bouwmeester
(v)
Mr L van
Schalkwyk (vi)
Mr W Shamu
(vii)
Ms M Jenkins
(viii)
Total
executives
remuneration
Total directors
and
executive
officers
remuneration
2016
99,000
2017
974,658
2016
407,700
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
89,280
220,353
17,946
51,047
339,280
340,353
145,946
159,047
107,226
485,226
271,400
499,400
35,744
87,722
---
---
142,970
359,122
17,644
41,684
5,002
---
160,394
168,422
---
---
645,620
667,822
210,644
140,684
37,113
---
5,002
119,231
---
---
5,002
137,670
---
32,650
41,684
---
504,658
140,684
175,620
1,150,728
26
65
12
32
22
54
22
52
---
---
22
54
8
30
13
---
4
---
4
---
6
30
15
---
400,806
808,506
50
(i)
(ii)
(iii)
Effective from 1 May 2017, Mr Smart’s fixed component of remuneration was revised to $300,000 per
annum (previous $120,000 per annum).
Effective from 1 October 2014, Mr Oliver’s fixed component of remuneration was revised to $108,000
per annum (previous $180,000 per annum).
Effective from 1 January 2017, Mr Waddell’s fixed component of remuneration was revised to $75,000
per annum (previous $37,500 per annum). During the financial year, Mr Waddell also received
additional amounts for consulting services provided to the Company, in addition to normal director
duties.
Orion Minerals NL
(iv) Mr Haller has waived his entitlement to receive fees for his position as Non-Executive Director from 1
Annual Financial Report
October 2013. Fees may be reinstated at a later date by resolution of the Board.
(v) Mr Bouwmeester has held the position of Chief Financial Officer since 9 February 2017 and has held the
position of Company Secretary since 1 April 2016.
20
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
the Group.
the Group.
to the Group.
(vi) Mr van Schalkwyk has held the position of Executive: Exploration (South Africa) from 1 June 2017. Prior
to 1 June 2017, from 1 May 2017 until 31 May 2017, Mr van Schalkwyk was engaged as a consultant to
(vii) Mr Shamu has held the position of Exploration: Mining & Development (South Africa) from 1 June 2017.
Prior to 1 June 2017, from 6 February 2017 until 31 May 2017, Mr Shamu was engaged as a consultant to
(viii) Ms Jenkins has held the position of Executive: Finance & Administration (South Africa) from 1 June 2017.
Prior to 1 June 2017, from 19 January 2017 until 31 May 2017, Ms Jenkins was engaged as a consultant
(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.
Insurance premiums paid on behalf of directors and officers are not allocated to or included in total
remuneration.
Options and Rights over equity instruments granted as compensation
As at the date of this report, there were 99,000,000 unissued ordinary shares under option issued to directors
and executives (2016: 81,000,000 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
2017 (i)
Grant date
Expiry date
Fair value
per option
at grant
date
Exercise
price per
option
(ii)
Number of
options
vested
during
2017
---
---
---
---
26 November 2015
26 November 2015
26 November 2015
---
$0.01
$0.01
$0.01
---
$0.035
$0.035
$0.035
---
30 November 2020
4,000,000
30 November 2020 10,000,000
30 November 2020
2,000,000
---
---
---
26 November 2015
$0.01
$0.035
30 November 2020
2,000,000
2,000,000
31 May 2017
$0.01
$0.03
31 May 2022
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
31 May 2017
31 May 2017
31 May 2017
31 May 2017
31 May 2017
$0.01
$0.045
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
$0.06
$0.02
$0.035
$0.05
$0.02
$0.035
$0.05
31 May 2022
31 May 2022
31 May 2022
31 May 2022
31 May 2022
31 May 2022
31 May 2022
31 May 2022
---
---
---
---
---
---
---
---
---
Directors
Mr D Waddell
Mr E Smart
Mr W Oliver
Mr A Haller
Executives
Mr M
Bouwmeester
Mr L van
Schalkwyk
Mr W Shamu
Ms M Jenkins
(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.
21
Orion Minerals Annual Report 2017
Orion Minerals NL
48
Annual Financial Report
(v) Mr Bouwmeester has held the position of Chief Financial Officer since 9 February 2017 and has held the
position of Company Secretary since 1 April 2016.
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
(vi) Mr van Schalkwyk has held the position of Executive: Exploration (South Africa) from 1 June 2017. Prior
to 1 June 2017, from 1 May 2017 until 31 May 2017, Mr van Schalkwyk was engaged as a consultant to
the Group.
(vii) Mr Shamu has held the position of Exploration: Mining & Development (South Africa) from 1 June 2017.
Prior to 1 June 2017, from 6 February 2017 until 31 May 2017, Mr Shamu was engaged as a consultant to
the Group.
(viii) Ms Jenkins has held the position of Executive: Finance & Administration (South Africa) from 1 June 2017.
Prior to 1 June 2017, from 19 January 2017 until 31 May 2017, Ms Jenkins was engaged as a consultant
to the Group.
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.
(ix)
Insurance premiums paid on behalf of directors and officers are not allocated to or included in total
remuneration.
Options and Rights over equity instruments granted as compensation
As at the date of this report, there were 99,000,000 unissued ordinary shares under option issued to directors
and executives (2016: 81,000,000 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
2017 (i)
Grant date
Fair value
per option
at grant
date
Exercise
price per
option
(ii)
Expiry date
Number of
options
vested
during
2017
---
---
---
---
26 November 2015
26 November 2015
26 November 2015
---
$0.01
$0.01
$0.01
---
$0.035
$0.035
$0.035
---
30 November 2020
4,000,000
30 November 2020 10,000,000
30 November 2020
2,000,000
---
---
---
26 November 2015
$0.01
$0.035
30 November 2020
2,000,000
2,000,000
31 May 2017
$0.01
$0.03
31 May 2022
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
31 May 2017
31 May 2017
31 May 2017
31 May 2017
31 May 2017
$0.01
$0.045
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
$0.01
$0.06
$0.02
$0.035
$0.05
$0.02
$0.035
$0.05
31 May 2022
31 May 2022
31 May 2022
31 May 2022
31 May 2022
31 May 2022
31 May 2022
31 May 2022
---
---
---
---
---
---
---
---
---
Directors
Mr D Waddell
Mr E Smart
Mr W Oliver
Mr A Haller
Executives
Mr M
Bouwmeester
Mr L van
Schalkwyk
Mr W Shamu
Ms M Jenkins
(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.
21
Orion Minerals Annual Report 2017
Orion Minerals NL
49
Annual Financial Report
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.
Directors
Number
Date
Options granted
Mr D Waddell
Mr E Smart
Mr W Oliver
Mr A Haller
Mr M
Bouwmeester
Mr L van
Schalkwyk
Mr W Shamu
Ms M Jenkins
2,000,000
2,000,000
2,000,000
4,000,000
4,000,000
4,000,000
5,000,000
5,000,000
5,000,000
10,000,000
10,000,000
10,000,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000
2,000,000
---
1,000,000
1,000,000
1,000,000
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
8 July 2013
8 July 2013
8 July 2013
26 November 2015
26 November 2015
26 November 2015
8 July 2013
8 July 2013
8 July 2013
26 November 2015
26 November 2015
26 November 2015
3 October 2013
3 October 2013
3 October 2013
26 November 2015
26 November 2015
26 November 2015
---
8 July 2013
8 July 2013
8 July 2013
26 November 2015
26 November 2015
26 November 2015
31 May 2017
31 May 2017
31 May 2017
31 May 2017
31 May 2017
31 May 2017
31 May 2017
31 May 2017
31 May 2017
% vested
in current
year
---%
---%
---%
---%
100%
---%
---%
---%
---%
---%
100%
---%
---%
---%
---%
---%
100%
---%
---%
---%
---%
---%
---%
100%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
% lapsed in
current
year (i)
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
Date grant vests (ii)
26 November 2013
26 November 2014
26 November 2015
30 November 2015
30 November 2016
30 November 2017
26 November 2013
26 November 2014
26 November 2015
30 November 2015
30 November 2016
30 November 2017
30 November 2013
30 November 2014
30 November 2015
30 November 2015
30 November 2016
30 November 2017
---
30 September 2013
31 March 2014
31 March 2015
30 November 2015
30 November 2016
30 November 2017
31 May 2018
31 May 2019
31 May 2020
31 May 2018
31 May 2019
31 May 2020
31 May 2018
31 May 2019
31 May 2020
(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.
22
Orion Minerals Annual Report 2017
50
Orion Minerals NL
Annual Financial Report
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
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.
Mr D Waddell
Mr E Smart
Mr W Oliver
Mr A Haller
Mr M Bouwmeester
Mr L van Schalkwyk
Mr W Shamu
Ms M Jenkins
Granted in year
$
---
---
---
---
---
95,140
95,140
95,140
Value of options
Exercised in
year
$
---
---
---
---
---
---
---
---
Lapsed in year
$
---
---
---
---
---
---
---
---
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:
Granted as
remuneration
Purchased
or
acquired
Expired
Balance at
end of period
30-Jun-17
Not vested
and not
exercisable
Vested and
exercisable
Balance at
beginning
of period
1-Jul-16
18,000,000
45,000,000
9,000,000
---
9,000,000
Specified directors
Mr Denis Waddell
Mr Errol Smart
Mr William Oliver
Mr Alexander Haller
Specified executives
Mr Martin
Bouwmeester
Mr Louw van
Schalkwyk
Mr Walter Shamu
Ms Michelle Jenkins
Total
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
18,000,000
45,000,000
9,000,000
---
4,000,000
10,000,000
2,000,000
---
14,000,000
35,000,000
7,000,000
---
9,000,000
2,000,000
7,000,000
6,000,000
6,000,000
6,000,000
99,000,000
6,000,000
6,000,000
6,000,000
36,000,000
---
---
---
63,000,000
---
---
---
81,000,000
6,000,000
6,000,000
6,000,000
18,000,000
23
Orion Minerals Annual Report 2017
Orion Minerals NL
51
Annual Financial Report
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Balance at
beginning of
period
1-Jul-15
Granted as
remuneration
Purchased
or
acquired
Expired
Balance at
end of
period
30-Jun-16
Not vested
and not
exercisable
Vested and
exercisable
8,000,000
15,900,000
3,000,000
12,000,000
30,000,000
6,000,000
(2,000,000)
(900,000)
---
18,000,000
45,000,000
9,000,000
8,000,000
20,000,000
4,000,000
10,000,000
25,000,000
5,000,000
---
---
---
---
4,720,000
---
(4,720,000)
---
---
---
3,000,000
---
34,620,000
6,000,000
---
54,000,000
---
---
---
---
---
(7,620,000)
9,000,000
---
81,000,000
4,000,000
---
36,000,000
5,000,000
---
45,000,000
Specified directors
Mr Denis Waddell
Mr Errol Smart
Mr William Oliver
Mr Alexander
Haller
Specified
executives
Mr Martin
Bouwmeester
Mr Kim Hogg
Total
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.
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-16
Purchased
or
acquired
during the
year
On
options
exercised
Disposals
of shares
Other
transfers of
shares
Balance at
end of
period
30-Jun-17
Specified directors
Mr Denis Waddell
Mr Errol Smart
Mr William Oliver
Mr Alexander Haller (i)
Specified executives
Mr Martin
Bouwmeester
Mr Louw van
Schalkwyk
Mr Walter Shamu
Ms Michelle Jenkins
Total
66,546,104 25,995,220
3,333,333
16,209,333
1,111,111
5,471,088
1,111,111
68,008,826
1,117,361
1,666,666
---
---
---
157,352,712 33,217,441
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
92,541,324
19,542,666
6,582,199
69,119,937
2,784,027
---
---
---
190,570,153
(i) Mr Haller holds relevant interests as follows: Silja Investment Ltd 56,706,578 shares, Mr Haller 12,412,039
shares and Pershing Securities 1,320 shares.
24
Orion Minerals Annual Report 2017
52
Orion Minerals NL
Annual Financial Report
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Balance at
beginning of
period
1-Jul-15
Purchased
or acquired
during the
year
On options
exercised
Disposals of
shares
Other
transfers
of shares
Balance at
end of
period
30-Jun-16
Specified directors
Mr Denis Waddell
Mr Errol Smart
Mr William Oliver
Mr Alexander Haller (i)
Specified executives
Mr Martin
Bouwmeester
Mr Kim Hogg
Total
33,212,771
8,742,667
5,471,088
58,675,493
33,333,333
7,466,666
---
9,333,333
1,117,361
---
107,219,380
---
---
50,133,332
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
66,546,104
16,209,333
5,471,088
68,008,826
1,117,361
---
157,352,712
(i) Mr Haller holds relevant interests as follows: Silja Investment Ltd 56,706,578 shares, Mr Haller 11,300,928
shares and Pershing Securities 1,320 shares.
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.
ENVIRONMENTAL ISSUES
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 (2016: $nil).
25
Orion Minerals Annual Report 2017
Orion Minerals NL
53
Annual Financial Report
Directors’ Report (continued)
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 NL, 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
RSM Australia Partners, the Company’s auditor, has performed other non-audit services in addition to their
statutory duties during the year ended 30 June 2017.
The board considered the non-audit services provided in the prior year by the auditor and was satisfied that
the provision of those non-audit services in the prior year by the auditor is compatible with, and did not
compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services were subject to the corporate governance procedures adopted by the Company
and have been reviewed by the audit committee to ensure they do not impact the integrity and
objectivity of the auditor; and
•
the non-audit services provided do not undermine the general principles
relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve
reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for
the Company, acting as an advocate for the Company or jointly sharing risks and rewards.
Details of the amounts paid to the auditor, RSM Australia Partners, and its related practices for non-audit
services provided during the year are set out below.
Services other than statutory audit:
Taxation compliance services (RSM Australia Partners)
AUDITOR’S INDEPENDENCE DECLARATION
Consolidated
2017
$
2016
$
7,350
7,350
7,100
7,100
The lead auditor’s independence declaration is set out on page 55 and forms part of the Directors’ Report for
the financial year ended 30 June 2017.
26
Orion Minerals Annual Report 2017
54Orion Minerals NL
Annual Financial Report
Directors’ Report (continued)
CORPORATE GOVERNANCE
The Board of directors recognises the recommendations of the Australian Securities Exchange Corporate
Governance Council for Corporate Governance Principles and Recommendations (3rd Edition) 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.
Denis Waddell
Chairman
Melbourne
Date: 28 September 2017
27
Orion Minerals Annual Report 2017 55
Orion Minerals Annual Report 2017AUDITOR’S INDEPENDENCEDECLARATIONAs lead auditor for the audit of thefinancial report ofOrion GoldNLfor the year ended30 June 2017I declare that, to the best of my knowledge and belief, there have been no contraventions of:(i)the auditor independence requirements of the Corporations Act 2001 in relation to the review; and(ii)anyapplicable code of professional conduct in relation to the review.RSM AUSTRALIA PARTNERSJ S CROALLPartnerDated: 28 September 2017Melbourne, Victoria 56
Orion Minerals NL
Annual Financial Report
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
FOR THE YEAR ENDED 30 JUNE 2017
Notes
2017
$
2016
$
Continuing operations
Other income
Exploration and evaluation expenses
Administration expenses
Impairment of available for sale financial assets
Gain/(loss) fair value of unlisted securities in other
entities
Fair value gain/(loss) on net smelter royalty receivable
Impairment of non-current assets
Plant and equipment written-off
Results from operating activities
Finance income
Finance expense
Net finance costs
3
3
3
6
8
7
87,800
(3,541,229)
(2,510,293)
---
(86,267)
(62,083)
(1,616,905)
(20,044)
439,720
(1,449,779)
(1,281,105)
(135,858)
305,098
---
(414,764)
(3,238)
(7,749,021)
(2,539,926)
92,361
(273,077)
(180,716)
11,738
---
11,738
Loss before income tax
Income tax (expense) / benefit
Loss from continuing operations attributable to equity
holders of the Group
(7,929,737)
(2,528,188)
14
---
---
(7,929,737)
(2,528,188)
Other comprehensive income
Foreign currency reserve
Other comprehensive income for the year, net of
income tax
99,172
---
---
---
Total comprehensive loss for the year
(7,830,565)
(2,528,188)
Loss per share (cents per share)
Basic loss per share
Diluted loss per share
Headline loss per share
Diluted headline loss per share
15
15
15
15
(1.28)
(1.28)
(1.02)
(1.02)
(0.68)
(0.68)
(0.57)
(0.45)
The notes on pages 60 to 93 are an integral part of these consolidated financial statements.
29
Orion Minerals Annual Report 2017
Orion Minerals NL
Orion Minerals NL
Consolidated Statement of Financial Position
AS AT 30 JUNE 2017
Consolidated Statement of Financial Position
AS AT 30 JUNE 2017
57
Annual Financial Report
Annual Financial Report
ASSETS
Current assets
ASSETS
Cash and cash equivalents
Current assets
Trade and other receivables
Cash and cash equivalents
Prepayments
Trade and other receivables
Available for sale financial assets
Prepayments
Unlisted securities in other entities
Available for sale financial assets
Total current assets
Unlisted securities in other entities
Total current assets
Non-current assets
Trade and other receivables
Non-current assets
Plant and equipment
Trade and other receivables
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
Current liabilities
LIABILITIES
Trade and other payables
Current liabilities
Provisions
Trade and other payables
Total current liabilities
Provisions
Total current liabilities
Non-current liabilities
Provisions
Non-current liabilities
Preference shares
Provisions
Convertible note
Preference shares
Total non-current liabilities
Convertible note
TOTAL LIABILITIES
Total non-current liabilities
NET ASSETS
TOTAL LIABILITIES
NET ASSETS
EQUITY
Equity attributable to equity holders of the Company
EQUITY
Issued capital
Equity attributable to equity holders of the Company
Accumulated losses
Issued capital
Other reserves
Accumulated losses
TOTAL EQUITY
Other reserves
TOTAL EQUITY
Notes
Notes
4
5
4
5
6
6
5
7
5
8
7
8
9
10
9
10
10
11
10
12
11
12
13
13
13
13
2017
$
2017
$
3,405,252
338,273
3,405,252
78,734
338,273
---
78,734
455,455
---
4,277,714
455,455
2016
$
2016
$
651,748
190,947
651,748
27,089
190,947
164,142
27,089
541,722
164,142
1,575,648
541,722
4,277,714
1,575,648
2,643,737
710,188
91,049
2,643,737
12,405,016
91,049
15,139,802
12,405,016
19,417,516
15,139,802
55,949
710,188
3,257,801
55,949
4,023,938
3,257,801
5,599,586
4,023,938
19,417,516
5,599,586
1,129,737
47,585
1,129,737
1,177,322
47,585
1,177,322
1,836,787
1,955,367
1,836,787
5,823,757
1,955,367
9,615,911
5,823,757
10,793,233
9,615,911
8,624,283
10,793,233
296,418
16,018
296,418
312,436
16,018
312,436
932
---
932
---
---
932
---
313,368
932
5,286,218
313,368
8,624,283
5,286,218
85,498,959
75,966,064
(79,883,039)
85,498,959
3,008,363
(79,883,039)
8,624,283
3,008,363
(72,065,740)
75,966,064
1,385,894
(72,065,740)
5,286,218
1,385,894
8,624,283
5,286,218
The notes on pages 60 to 93 are an integral part of these consolidated financial statements.
The notes on pages 60 to 93 are an integral part of these consolidated financial statements.
30
30
Orion Minerals Annual Report 2017
58
Orion Minerals NL
Annual Financial Report
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2017
Notes
2017
$
2016
$
Cash flows from operating activities
Payments for exploration and evaluation
Payments to suppliers and employees
Interest received
Interest expense
Convertible note – interest expense
Research and development (R&D) tax offset received
Other receipts
Net cash used in operating activities
4
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of plant and equipment
Purchase of exploration and evaluation assets
R&D tax offset received in relation to exploration assets
Proceeds from sale of available for sale financial assets
Proceeds from sale of tenements
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of Shares
Share issue expenses
Proceeds from borrowings
Repayment of borrowings
Net cash from financing activities
12/16
16
(5,119,805)
(1,439,187)
12,041
---
(29,836)
---
33,824
(6,542,963)
(77,000)
---
(5,342,975)
387,109
205,174
700,000
(4,127,692)
7,453,800
(79,641)
6,500,000
(450,000)
13,424,159
(1,476,138)
(866,248)
11,785
---
---
26,359
51,395
(2,252,847)
---
26,769
(479,256)
816,001
---
175,000
538,514
1,901,149
(33,347)
480,000
(100,000)
2,247,802
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
2,753,504
651,748
533,469
118,279
Cash on hand and at bank at end of year
4
3,405,252
651,748
The notes on pages 60 to 93 are an integral part of these consolidated financial statements.
31
Orion Minerals Annual Report 2017
Orion Minerals NL
59
Annual Financial Report
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2017
30 June 2016
Balance at 1 July 2015
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 of costs
Transfer of share options expired
Share-based payments expense
Total Transactions with Owners
Issued
capital
($)
Accumulated
losses
($)
Other
reserves
($)
Total equity
($)
73,458,263
---
---
(69,616,091)
(2,528,188)
---
---
(2,528,188)
1,044,774
---
---
---
4,886,946
(2,528,188)
---
(2,528,188)
2,507,801
---
---
2,507,801
---
78,539
---
78,539
---
(78,539)
419,659
341,120
2,507,801
---
419,659
2,927,460
Balance at 30 June 2016
75,966,064
(72,065,740)
1,385,894
5,286,218
30 June 2017
Issued
capital
($)
Accumulated
losses
($)
Other
reserves
($)
Total equity
($)
Balance at 1 July 2016
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 of costs
Convertible note
Foreign translation reserve
Transfer of share options expired
Share-based payments expense
Total Transactions with Owners
75,966,064
---
---
---
(72,065,740)
(7,929,737)
---
(7,929,737)
9,532,895
---
---
---
---
9,532,895
---
---
---
112,437
---
112,437
1,385,894
---
---
---
---
407,246
99,172
(112,437)
1,228,488
1,622,468
5,286,218
(7,929,737)
---
(7,929,737)
9,532,895
407,246
99,172
---
1,228,488
11,168,629
Balance at 30 June 2017
85,498,959
(79,883,039)
3,008,363
8,624,282
The notes on pages 60 to 93 are an integral part of these consolidated financial statements.
32
Orion Minerals Annual Report 2017
60
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
1 CORPORATE INFORMATION
Orion Minerals NL (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 2017 comprised the Company and its subsidiaries, (together
referred to as the Group). The Group is a for-profit group and is primarily involved in zinc, copper nickel,
gold and platinum group elements (PGE) exploration.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
(i) Statement of compliance
The consolidated financial statements are general purpose financial statement which have been
prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial
statements comply with International Financial Reporting Standards (IFRSs) adopted by the International
Accounting Standards Board (IASB). The consolidated financial statements were authorised for issue by
the Board of directors on 28 September 2017.
(ii) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except where
otherwise stated.
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements, and have been applied consistently by the Group except as required
by the new accounting standards and interpretations adopted as disclosed in Note 2(b).
Certain comparative amounts have been reclassified to conform with the current year’s presentation.
(iii) Going concern
The Group recorded a net loss of $7,929,737 for the year ended 30 June 2017 and the Group’s position as
at 30 June 2017 was as follows:
•
•
•
The Group had cash reserves of $3,405,252 and had negative operating cash flows of $6,542,963
for the year ended 30 June 2017;
The Group had positive working capital at 30 June 2017 of $3,100,392; and
The Group’s main activity is exploration 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.
Current forecasts indicate that cash on hand as at 30 June 2017 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.
The Directors 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 $7,453,800 (before costs) during the year ended 30 June 2017. Additionally, the
Company raised $6,050,000 through the issue of convertible notes in March 2017. Following year end, in
August 2017, the Company also $1,750,000 through the issue of 73,000,000 Shares to Tembo and agreed
to a $6,000,000 bridge loan facility with Tembo, as set out more fully in Note 25, to support the Company’s
ongoing exploration and feasibility programs.
33
Orion Minerals Annual Report 2017 Orion Minerals NL
61
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Based on results to date from exploration programs, the Company’s ability to successfully raise capital in
the past and capital raising initiatives as announced, 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.
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 2017 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. In this case, the holders of the convertible notes and
Anglo American Sefa Mining Fund (AASMF), as the holders of security over certain assets of the Group,
under existing funding agreements, would take priority in relation to the assets of the Group. No
allowance for such circumstances has been made in the financial report. Further details on these funding
arrangements are given in Note 12 (Convertible Notes) and Note 16 (Loans with other entities and related
parties).
(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.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The
standard replaces all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial
Instruments: Recognition and Measurement'. AASB 9 introduces new classification and measurement
models for financial assets. A financial asset shall be measured at amortised cost, if it is held within a
business model whose objective is to hold assets in order to collect contractual cash flows, which arise on
specified dates and solely principal and interest. All other financial instrument assets are to be classified
and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial
recognition to present gains and losses on equity instruments (that are not held-for-trading) in other
comprehensive income ('OCI'). For financial liabilities, the standard requires the portion of the change in
fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an
accounting mismatch). New simpler hedge accounting requirements are intended to more closely align
the accounting treatment with the risk management activities of the entity. New impairment
requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment will
be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased
significantly since initial recognition in which case the lifetime ECL method is adopted. The standard
introduces additional new disclosures. The Group will adopt this standard from 1 July 2018 with the
impact of its adoption assessed as minimal due to timing of these instruments held by the Group.
34
Orion Minerals Annual Report 2017 62
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard
provides a single standard for revenue recognition. The core principle of the standard is that an entity will
recognise revenue to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in exchange for those goods or
services. The standard will require: contracts (either written, verbal or implied) to be identified, together
with the separate performance obligations within the contract; determine the transaction price, adjusted
for the time value of money excluding credit risk; allocation of the transaction price to the separate
performance obligations on a basis of relative stand-alone selling price of each distinct good or service,
or estimation approach if no distinct observable prices exist; and recognition of revenue when each
performance obligation is satisfied. Credit risk will be presented separately as an expense rather than
adjusted to revenue. For goods, the performance obligation would be satisfied when the customer
obtains control of the goods. For services, the performance obligation is satisfied when the service has
been provided, typically for promises to transfer services to customers. For performance obligations
satisfied over time, an entity would select an appropriate measure of progress to determine how much
revenue should be recognised as the performance obligation is satisfied. Contracts with customers will be
presented in an entity's statement of financial position as a contract liability, a contract asset, or a
receivable, depending on the relationship between the entity's performance and the customer's
payment. Sufficient quantitative and qualitative disclosure is required to enable users to understand the
contracts with customers; the significant judgments made in applying the guidance to those contracts;
and any assets recognised from the costs to obtain or fulfil a contract with a customer. The Group will
adopt this standard from 1 July 2018 with the impact of its adoption assessed by the Group as being
minimal to no impact based on current operations and non-cash generating.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard
replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance
leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position,
measured at the present value of the unavoidable future lease payments to be made over the lease
term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such
as personal computers and small office furniture) where an accounting policy choice exists whereby
either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A
liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments,
lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or
dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation
charge for the leased asset (included in operating costs) and an interest expense on the recognised
lease liability (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 will be improved as the
operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For
classification within the statement of cash flows, the lease payments will be separated into both a
principal (financing activities) and interest (either operating or financing activities) component. For lessor
accounting, the standard does not substantially change how a lessor accounts for leases. The Group will
adopt this standard from 1 July 2019 and the impact of its adoption is assessed as minimal due to the
minimal operating leases as at 30 June 2017.
• Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material
impact on the entity in the current or future reporting periods and on foreseeable future transactions.
35
Orion Minerals Annual Report 2017 Orion Minerals NL
63
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by
Orion Minerals NL (Parent Company) from time to time during the year and at 30 June 2017 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.
(i)
Subsidiaries
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 profit or
loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
(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 (R).
Transactions in foreign currencies are translated to the respective functional currency of 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 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
The Company classifies its financials assets in the following categories: financial assets at fair value through
profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.
The classification depends on the purpose for which the investments were acquired. Management
determines the classification of its investments at initial recognition and, in the case of assets classified as
held-to-maturity, re-evaluates this designation at the end of each reporting period.
(i) Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives
that are either designated in this category or not classified in any of the other categories. They are
included in non-current assets unless the investment matures or management intends to dispose of the
investment within 12 months of the end of the reporting period. Investments are designated as available-
for-sale if they do not have fixed maturities and fixed or determinable payments and management
intends to hold them for the medium to long-term.
36
Orion Minerals Annual Report 2017 64
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recognition and derecognition
(ii)
Purchases and sales of financial assets are recognised on trade-date - the date on which the Company
commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash
flows from the financial assets have expired or have been transferred and the Company has transferred
substantially all the risks and rewards of ownership.
When securities classified as available-for-sale are sold, the accumulated fair value adjustments
recognised in other comprehensive income are reclassified to profit or loss as gains and losses from
investment securities.
(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 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 profit or loss.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently
carried at fair value.
Impairment
(iv)
If there is objective evidence of impairment for available-for-sale financial assets, the cumulative loss –
measured as the difference between the acquisition cost and the current fair value, less any impairment
loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised
in profit or loss. Impairment losses on equity instruments that were recognised in profit or loss are not
reversed through profit or loss in a subsequent period.
(f) Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and accumulated impairment
losses. Depreciation is calculated on a reducing balance 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.
Subsequent expenditure is capitalised only when it is probable that the future economic benefits
associated with the expenditure will flow to the Group.
(g) Assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use and a sale is considered highly probable.
They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets
such as deferred tax assets, assets arising from employee benefits, financial assets and investment
property that are carried at fair value and contractual rights under insurance contracts, which are
specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to
fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell
of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised.
A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal
group) is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised
while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a
disposal group classified as held for sale continue to be recognised.
37
Orion Minerals Annual Report 2017 Orion Minerals NL
65
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 balance sheet. The liabilities of a disposal group
classified as held for sale are presented separately from other liabilities in the balance sheet.
(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 profit and 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.
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.
(ii) Non-derivative financial assets
Financial assets not classified as at fair value through profit or loss, including an interest in an equity-
accounted investee, are assessed at each reporting date to determine whether there is objective
evidence of impairment. Financial assets measured at amortised cost.
The Group considers evidence of impairment for these assets measured at both an individual asset and a
collective level. All individually significant assets are individually assessed for specific impairment. Those
found not to be impaired are then collectively assessed for any impairment that has been incurred but
not yet individually identified. Assets that are not individually significant are collectively assessed for
risk
impairment. Collective assessment
characteristics.
is carried out by grouping together assets with similar
In assessing collective impairment, the Group uses historical information on the timing of recoveries and
the amount of loss incurred, and makes an adjustment if current economic and credit conditions are such
that the actual losses are likely to be greater or lesser than suggested by historical trends.
An impairment loss is calculated as the difference between an asset’s carrying amount and the present
value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses
are recognised in profit or loss and reflected in an allowance account. When the Group considers that
there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the
amount of impairment loss subsequently decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised, then the previously recognised impairment loss is
reversed through profit or loss.
38
Orion Minerals Annual Report 2017 66
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i) Trade and other receivables
Trade receivables, which generally have 30 - 60 day terms, are recognised and carried at original invoice
amount less an allowance for any uncollectible amounts.
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
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 profit or loss.
(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.
39
Orion Minerals Annual Report 2017 Orion Minerals NL
67
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
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 24.
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 expired 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.
(o) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group
and the revenue can be reliably measured.
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.
(ii) Government grants
Grants that compensate the Group for expenditures incurred are recognised in profit or loss on a
systematic basis in the periods in which the expenditures are recognised.
R&D tax offsets received are offset against the carrying value of the assets and consequent reduction in
the value of impairments recognised.
(p) Income tax
Tax consolidation
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 NL.
40
Orion Minerals Annual Report 2017 68
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
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;
topographical, geological and geophysical studies;
exploration drilling, trenching and sampling; and
activities in relation to evaluating the technical feasibility and commercial viability of extracting
the 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;
tanks; and
exploration vehicles and drilling equipment.
Assets that are classified as intangible assets include:
•
•
•
•
drilling rights;
acquired rights to explore;
exploratory drilling costs; and
trenching and sampling costs.
41
Orion Minerals Annual Report 2017 Orion Minerals NL
69
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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 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:
(i)
(ii)
(iii)
sufficient data exists to determine technical feasibility and commercial viability: and
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;
(iv) 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.
(v)
The value of R&D tax incentives received in relation to exploration assets is recognised by deducting the
grant when arriving at the carrying value of the asset.
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.
42
Orion Minerals Annual Report 2017 70
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 8 - Deferred exploration, evaluation and development;
Note 10 - Provisions;
Note 12 - Convertible notes; and
Note 24 - Measurement of share based payments.
(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 for the effects of all 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 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 property, 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.
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.
43
Orion Minerals Annual Report 2017 Orion Minerals NL
71
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(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.
3 REVENUES AND EXPENSES
Other income
Sundry revenue
Total other income
Exploration and evaluation expenses
Exploration and evaluation expenses
Employee expenses
Total exploration and evaluation expenses
Administration expenses
Administration expenses
Employee expenses
Superannuation
Employee share based payments
Depreciation
Total administration expenses
2017
$
2016
$
87,800
87,800
439,720
439,720
3,237,682
303,547
3,541,229
1,144,123
305,656
1,449,779
1,527,462
757,933
7,218
195,416
22,264
2,510,293
604,847
216,207
6,487
419,659
33,905
1,281,105
44
Orion Minerals Annual Report 2017 72
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
4 CASH AND CASH EQUIVALENTS
Cash and cash equivalents (a)
2017
$
3,405,252
3,405,252
2016
$
651,748
651,748
(a) Cash and cash equivalents earn interest at floating rates based on daily bank rates.
Reconciliation from the net loss after tax to the net cash flows used
in operations
2017
$
2016
$
Net loss
(7,929,737)
(2,528,188)
Adjustments for:
Depreciation
Movement in securities in other entities
Share based payments expense
Creditors paid via shares
Interest on preference shares
Deferred exploration, evaluation and development impairment
Loss on disposal of plant and equipment
Fees and interest waived by shareholder
Changes in assets and liabilities:
(Increase)/decrease in exploration expenditure
(Increase)/decrease in trade and other receivables
(Increase)/decrease in non-current receivables
(Increase)/decrease in inventories
(Increase)/decrease in prepayments
(Decrease)/increase in trade and other payables
(Decrease)/increase in provisions
Net cash used in operating activities
22,264
312,492
195,416
219,450
369,115
1,616,905
20,044
---
---
(2,142,958)
---
---
(51,645)
857,819
(32,128)
(6,542,963)
33,906
(405,864)
419,659
---
---
414,764
3,238
(8,630)
---
(18,360)
---
4,599
(24,044)
(116,747)
(27,180)
(2,252,847)
The settlement of outstanding directors’ and creditors’ fees through the issue of shares to the value of
$219,450 (2016: $120,000), constitutes a non-cash operating activity and is not included in the
Consolidated Statement of Cash Flows.
45
Orion Minerals Annual Report 2017 Orion Minerals NL
73
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
5
TRADE AND OTHER RECEIVABLES
Current receivables:
Security deposits and environmental bonds (a)
Other receivables
Interest receivable
Non-current receivables:
Net smelter royalty receivable from Centennial Mining Limited
Security deposits and environmental bonds (a)
2017
$
2016
$
180,000
157,237
1,036
338,273
437,917
2,205,820
2,643,737
180,000
9,919
1,028
190,947
500,000
210,188
710,188
Other receivables are non-interest bearing and are generally on 30-day terms.
(a) Security deposits and environmental bonds comprise cash placed on deposit to secure bank
guarantees in respect of obligations entered into for office rental obligations and environmental
performance bonds in South Africa and Australia. These deposits are not available to finance the
Group’s day to day operations.
During the financial year the Company acquired Agama Exploration and Mining Proprietary Limited
(Agama), a South African registered company, which, through its subsidiary companies, holds an
effective 73.33% interest in a portfolio of projects including an advanced volcanic massive sulphide
zinc-copper exploration project with near-term production potential at the Prieska Zinc-Copper
Project, located near Copperton in the Northern Cape province of South Africa (Prieska Project). The
Group also has environmental obligations for the Prieska Projecf. This amount is held on deposit via a
call account with the bank and by bank guarantee issued to the government body. These funds 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 10).
6 UNLISTED SECURITIES IN OTHER ENTITIES
Unlisted securities in other entities at fair value
455,455
541,722
Securities held in other entities is an investment of unlisted options in a listed company on the ASX. The fair
value of these securities is measured using an appropriate financial model, including the value of the
entities share price, as published, in the relevant market domain.
2017
$
2016
$
7 PLANT AND EQUIPMENT
Opening cost - 1 July
Accumulated depreciation
Opening written down value
Additions
Disposals/write offs
Depreciation charge for the year
Written down value at 30 June
46
2017
$
2016
$
1,011,393
(955,444)
55,949
77,408
(20,044)
(22,264)
91,049
1,014,631
(921,539)
93,092
---
(3,238)
(33,905)
55,949
Orion Minerals Annual Report 2017 74
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
8 DEFERRED EXPLORATION, EVALUATION AND DEVELOPMENT
Acquired mineral rights
Opening cost
Exploration and evaluation acquired (b)
Exploration, evaluation and development
Deferred exploration and evaluation expenditure
Opening cost
Expenditure incurred
R&D tax offset received in relation to exploration assets
Exploration expensed
Impairment (a)
Deferred exploration and evaluation expenditure
2017
$
2016
$
2,228,640
9,234,907
11,463,547
2,228,640
---
2,228,640
1,029,161
5,070,442
(342,980)
(3,198,248)
(1,616,905)
941,468
1,788,985
1,934,719
(830,000)
(1,449,779)
(414,764)
1,029,161
Net Carrying amount at 30 June
12,405,016
3,257,801
(a) As at 30 June 2017 the Group undertook a review of the carrying value of each area of interest. As
a result, the carrying value of deferred exploration, evaluation and development expenditure in the
Statement of Financial Position, as at 30 June 2017, was impaired by $1,616,905 due to analysis
performed by management indicating that the capitalised exploration on an area of interest may
not be recoverable by the Company. An amount of $1,189,801 relates to deferred exploration
development and expenditure at the Fraser Range Project in Western Australia.
(b) On 29 March 2017, the Company completed the acquisition of Agama, an unlisted South African
registered company. Following the acquisition, through its subsidiary companies, the Company
holds an effective 73.33% interest in the Prieska Project. The purchase consideration paid on
settlement of the acquisition was $6,529,433, of which $3,317,536 was paid in cash and $2,178,826
was paid by the issue of 94,321,464 Orion Shares. Each Share has an attached unlisted Orion option,
exercisable at $0.0462 and expiring 29 March 2019 ($1,033,071) In addition, the Company provided
finance for Agama to enable it to settle all historical shareholder loans to an aggregate amount of
approximately $3,334,427. At initial recognition, the Company measured the Agama acquisition at
its fair value, being $9,234,907.
9
TRADE AND OTHER PAYABLES
Current
Trade payables
Accruals
2017
$
2016
$
499,418
630,319
1,129,737
222,579
73,839
296,418
47
Orion Minerals Annual Report 2017 Orion Minerals NL
75
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
10 PROVISIONS
Current
Employee benefits - annual leave
Non-current
Rehabilitation (i)
Employee benefits - long service leave
47,585
47,585
1,832,337
4,450
1,836,787
16,018
16,018
---
932
932
Total
1,884,372
16,950
(i)
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 a guarantee
held on deposit (refer Note 5).
In Australia, the state government regulations in the various states in which the Group operates
require rehabilitation of drill sites including any other sites where the Group has caused surface and
ground disturbance. The costs are not of a material nature and vary across disturbance sites. To
date rehabilitation has taken place on drill sites as drill rigs are moved as part of the exploration
program when drilling in a particular area of interest is complete or not active for an extended period
of time due to other drilling project priorities.
11 PREFERENCE SHARES
AASMF preference shares – principal
AASMF preference shares - provision for dividends and settlement
premium
Total
2017
$
2016
$
1,586,252
369,115
1,955,367
---
---
---
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 and loss
and other comprehensive income
Repli Trading No 27 (Pty) Ltd (Repli) (a 73.33% owned subsidiary of Agama Exploration & Mining (Pty) Ltd
(Agama)), applied for a funding facility from the Anglo American Sefa Mining Fund (AASMF) for the
further exploration and development of the Prieska Project. On 14 November 2014, AASMF approved the
funding facility for an amount of R30,000,000, subject to certain terms and conditions. The funding is
provided in two tranches, the first tranche for R15,750,000 by way of the issue of Repli preference shares
and the second tranche for R14,250,000 by way of a loan from AASMF (refer Note 16).
48
Orion Minerals Annual Report 2017 76
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
11 PREFERENCE SHARES (continued)
15,750,000 cumulative redeemable non-participating preference shares;
Subscription price R15,750,000 ($1,586,252);
On 2 November 2015, a subscription agreement was entered into between Repli and AASMF, on 5
November 2015 the Subscription Price was paid to Repli and on the same day the Preference Shares
were issued to AASMF. Under the terms of the agreement, AASMF subscribed for 15,750,000 Repli
redeemable preference shares at a subscription price of R1 per redeemable preference share. The key
terms of the agreement are as follows:
•
•
• Dividend rate – prime lending rate in South Africa;
• Dividend payment – dividends accrue annually based on the subscription price. Fifty percent of the
dividends which have accrued and accumulated from the date of issue until 2 years after the Prieska
Project mining right (Mining Right) has been issued shall become due and payable on the scheduled
dividend date (approximately 4 years after the issue date). Balance of the accrued and
accumulated dividends to be paid at the relevant redemption date;
• Redemption date is the earlier of 7 years after the issue date or 4 years after the Mining Right has
been issued;
• Redemption amount consists of:
o
o
o
R15,750,000;
any unpaid and accumulated dividends; and
Settlement premium based on internal rate of return (IRR) of 13.5%, taking into account all cash
flows from the preference shares in order to get an overall IRR of 13.5% (IRR is fixed for the
duration that the preference shares are outstanding).
• Preference shares are unsecured, but AASMF will hold 26% voting rights in Repli in the event that there
•
is a default on the part of Repli;
Funding to principally used for a 12 month exploration program on the NW Oxide Zone at the Prieska
Project and the use the results to update the scoping study.
12 CONVERTIBLE NOTES
Convertible notes – liability
Opening balance
Convertible note liability
Closing balance
2017
$
2016
$
---
5,823,757
5,823,757
---
---
---
Refer to Note 13 for details in relation to the convertible note equity reserve.
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, raising $6,050,000. Key terms of
the Convertible Notes are summarised as follows:
• Maturity Date: 17 March 2019.
•
Interest: 12% per annum calculated and payable quarterly in arrears.
• Conversion Price: $0.026 per Share.
• Conversion: holders of the Convertible Notes may elect to convert part or all of their Convertible
Notes at any time prior to the Maturity Date, provided the total face value of the Notes is not less than
$250,000.
49
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77
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
12 CONVERTIBLE NOTES (continued)
•
•
Early redemption by the Company: the Company may elect to redeem all or some of the Convertible
Notes by notice to the noteholder, however the noteholder shall have the right, within 14 days of
receipt of an early redemption notice from the Company, to convert the Convertible Notes the
subject of the early redemption notice into Shares at the Conversion Price.
Early redemption by the noteholder: the noteholders may require the Company to redeem the
Convertible Notes if an event of default occurs and the noteholders by special resolution approve the
redemption.
At any time before the Maturity Date, a noteholder may elect to redeem and set off some or all of
the Convertible Notes held by it for the redemption amount as part of an equity capital raising by the
Company permitted by the note deed and in which the noteholder may have a right to participate
in (Equity Raising), such that the redemption amount is set off against the amount payable by the
noteholder to subscribe for securities under the Equity Raising.
• Redemption amount: the redemption amount is the outstanding facility amount with respect to each
Convertible Note. If any Convertible Notes are redeemed by the Company within 12 months after
their issue, an additional early repayment fee of 5% of the facility amount of the Convertible Notes
being redeemed is payable by the Company.
•
•
Transferrability: The Convertible Notes are not transferrable except to an affiliate of a noteholder.
Security: secured over certain assets of the Company and its subsidiaries.
Further details as to the key terms of the Convertible Notes are set out in the Company’s 8 March 2017
ASX release.
13 ISSUED CAPITAL AND RESERVES
Ordinary fully paid shares
Contributing shares
2017
$
2016
$
85,496,608
2,351
75,963,713
2,351
85,498,959
75,966,064
The following movements in issued capital occurred during the reporting period:
Number of Shares
Issue
price
$
Ordinary fully paid shares
Opening balance at 1 July 2016
Share issues:
Placement (19 Sept 16)
Placement (14 Nov 16)
Placement (23 Dec 16)
Placement (30 Dec 16)
Placement (30 Dec 16)
Placement (23 Dec 16)
Placement (8 Mar 17)
Issue – Agama acquisition (29 Mar 17)
Placement (8 June 17)
Less: Issue costs
Closing balance at 30 June 2017
50
475,037,870
75,963,713
9,100,000
72,222,221
55,555,553
25,000,000
5,555,555
1,461,111
54,166,666
94,321,464
125,000,000
---
917,420,440
$0.025
$0.018
$0.018
$0.020
$0.018
$0.018
$0.024
$0.023
$0.024
---
227,500
1,300,000
1,000,000
500,000
100,000
26,300
1,300,000
2,169,394
3,000,000
(90,299)
85,496,608
Orion Minerals Annual Report 2017 78
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
13 ISSUED CAPITAL AND RESERVES (continued)
Contributing shares
Opening balance at 1 July 2016
Closing balance at 30 June 2017
Number of
Shares
58,775
58,775
$
2,351
2,351
The following movements in issued capital occurred during the prior period:
Ordinary fully paid shares
Opening balance at 1 July 2015
Share issues:
Placement
Entitlements offer
Silja Facility loan conversion (2 Dec 15)
Tarney Facility loan conversion (2 Dec 15)
Less: Issue costs
Number of Shares
Issue
price
$
305,627,982
---
73,455,912
60,673,331
66,069,891
9,333,333
33,333,333
$0.015
$0.015
$0.015
$0.015
---
---
910,100
991,049
140,000
500,000
(33,348)
Closing balance at 30 June 2016
475,037,870
75,963,713
Contributing shares
Opening balance at 1 July 2015
Closing balance at 30 June 2016
Other Reserves
Share based payments
Convertible note equity
Foreign currency reserve
Share based payments reserve - movement
Number of
Shares
58,775
58,775
$
2,351
2,351
2017
$
2,501,945
407,246
99,172
3,008,363
2016
$
1,385,894
---
---
1,385,894
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. Refer to Note 24 for further details of
these plans.
51
Orion Minerals Annual Report 2017 Orion Minerals NL
79
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
13 ISSUED CAPITAL AND RESERVES (continued)
The following movements in the share based payments reserve occurred during the period:
Opening balance at 1 July 2015
Share based payments expense
Unlisted share options expired and transferred to accumulated losses (i)
Closing balance at 30 June 2016
Share based payments expense
Unlisted share options expired and transferred to accumulated losses (i)
Agama acquisition
Closing balance at 30 June 2017
$
1,044,774
419,659
(78,539)
1,385,894
195,416
(112,437)
1,033,072
2,501,945
(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:
Number of
options
Expiry date
Exercise price
6,000,000
31/07/2016
$0.35
6,000,000
Class
Unlisted options
Total
14 INCOME TAX
Income tax expense
Profit / (loss) before tax
2017
$
2016
$
(7,929,737)
(7,929,737)
(2,528,188)
(2,528,188)
(2,180,678)
(758,456)
1,396
(12,135)
53,739
(2,137,678)
122,838
(252,708)
125,897
(762,429)
2,137,678
762,429
---
---
Income tax using the corporation rate of 27.5% (2016: 30%)
Movements in income tax expense due to:
Non deductible expenses
Non assessable income
Employee share based payments expensed
(Under) / over provided in prior years
Tax effect of tax losses not recognised
Income tax expense/(benefit)
52
Orion Minerals Annual Report 2017 80
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
14 INCOME TAX (continued)
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 $74,320,000
(2016: $70,722,000) and foreign losses of approximately R74,909,089 (~$7,490,909) (2016: $nil), which may
be available to offset against taxable income in future years, subject to continuing to meet relevant
statutory tests. The Group is conducting a review of the Australian entities estimated un-recouped gross
Australian income tax losses and the results of this review may reduce the estimated tax losses available
to offset against taxable income in future years to the Company. As at the date of this report, the
review is on-going. 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.
To the extent that it does not offset a net deferred tax liability, a deferred tax asset has not been
recognised in the accounts for these unused losses because it is not probable that future taxable profit
will be available to use against such losses.
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 NL, reports to the
Australian Taxation Office on behalf of all the Australian entities.
15 EARNINGS PER SHARE
Basic earnings 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
Loss attributable to ordinary equity holders of the Company
Diluted loss attributable to ordinary equity holders of the Company
b)
Reconciliation of earnings used in calculating earnings per share
Loss attributable to ordinary shares
2017
Cents
2016
Cents
(1.28)
(1.28)
(0.68)
(0.68)
2017
$
2016
$
(7,929,737)
(2,528,188)
53
Orion Minerals Annual Report 2017 Orion Minerals NL
81
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
15 EARNINGS PER SHARE (continued)
c) Weighted average number of shares
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share.
2017
Number
2016
Number
619,377,528
372,583,775
Weighted average number of ordinary shares and potential ordinary
shares used as the denominator in calculating diluted earnings per
share.
619,377,528
372,583,775
d)
Headline earnings per share
Loss before income tax
Impairment of non-current assets reversal
Plant and equipment written off
Adjusted earnings
2017
$
(7,929,737)
1,616,905
20,044
(6,292,788)
2016
$
(2,528,188)
414,764
3,238
(2,110,186)
Weighted average number of shares
619,377,528
372,583,775
Earnings / (loss) per share (cents per share)
Diluted earnings / (loss) per share (cents per share)
(1.02)
(1.02)
(0.57)
(0.45)
16 LOANS WITH OTHER ENTITIES AND RELATED PARTIES
AASMF Loan
On 2 November 2015, Repli and AASMF entered into a loan agreement for the further exploration and
development of the Prieska Project. Under the terms of the loan, AASMF shall advance R14,250,000 to Repli.
The key terms of the agreement are as follows:
•
•
•
•
Loan amount R14,250,000;
Interest rate will be the prime lending rate in South Africa;
The disbursement of the loan will be subject to AASMF notifying Repli that it is satisfied with the results of
the updated scoping study;
Repayment date will be the earlier of 3 years from the date of the advance or on the date which Repli
raises any additional finance for the further development of the Prieska Project; and
• On the advancement of the loan, 29.17% of the shares held in Repli by the Agama group (a wholly
owned subsidiary of Orion), will be pledged as security to AASMF for the performance of Repli's
obligations in terms of the loan.
Following year end, on 1 August 2017, Repli drew down on the available AASMF loan in full (~$1,349,610
(R14,250,000)).
Tarney Loan
The Company announced to the ASX on 31 October 2016, that a $500,000 loan facility had been agreed with
Tarney Holdings Pty Ltd (Tarney), a major shareholder of the Company and a company associated with the
Company’s Chairman, Mr Denis Waddell (Facility).
Under the terms of the Facility, Tarney could elect to convert cash drawn down under the Facility into shares
in the Company, subject to shareholder approval being sought at the Company’s Annual General Meeting
held on 30 November 2016 (Meeting Date).
54
Orion Minerals Annual Report 2017 82
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
16 LOANS WITH OTHER ENTITIES AND RELATED PARTIES (continued)
Any advances drawn down under the Facility could be convertible to new Shares at Tarney’s discretion and
at an issue price per Share which would be either:
•
•
If Shares were issued during the period between 21 October 2016 and the Meeting Date, the highest
price at which the Company issued Shares during this period, but at a price which is not less than $0.02
per Share; or
If no Shares were issued during the period between 21 October 2016 and the Meeting Date, the
greater of:
o
o
the highest price at which the Company issued Shares following the Meeting Date and the day
prior to the date of issue of Shares to Tarney, but at a price which is not less than $0.02 per Share;
or
if no Shares were issued during the period between the Meeting Date and the date of the issue
of Shares to Tarney, 80% of the VWAP, which is at a discount not greater than 20% to the market
price of the Company's Shares over the last 5 days on which sales are recorded before the day
on which the Shares were issued.
A total of $450,000 was drawn under the Facility and subsequently repaid to Tarney on 18 November 2016.
The Facility expired on 31 December 2016 with a nil balance owing.
17 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, loan 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.
55
Orion Minerals Annual Report 2017 Orion Minerals NL
83
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
17 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
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 no 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 $1,000 (2016: $1,000) based on year-end cash balances, and
$nil (2016: $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 profit
and loss.
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. Trade and other receivables represent GST refundable from the Australian
Taxation Office 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) 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.
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 the
South African Rand. 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 no significant exposure to foreign currency risk at the end of the reporting period.
Commodity price risk
The Group’s exposure to price risk is minimal at this stage of the operations.
56
Orion Minerals Annual Report 2017 84
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
17 FINANCIAL INSTURMENTS (continued)
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) 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:
Consolidated - 30
June 2017
Financial assets:
Cash on hand and
at bank
Trade and other
receivables
Total
Financial liabilities:
Convertible note
liability
Trade and other
payables
Total
Consolidated - 30
June 2016
Financial assets:
Cash on hand and
at bank
Trade and other
receivables
Total
Financial liabilities:
Convertible note
liability
Trade and other
payables
Total
Weighted
average
interest
rate
Floating
interest
rate
$
Fixed interest
rate maturing
in 1 Year or less
$
Fixed interest
rate maturing
2 to 5 years
$
Non-
interest
bearing
$
Total
$
0.92%
3,386,452
---
---
18,800
3,405,252
2.15%
---
3,386,452
2,385,820
2,385,820
437,917
158,272
2,982,009
437,917
177,072
6,387,261
12.00%
2.15%
---
---
---
---
---
---
5,823,757
---
5,823,757
---
1,129,737
1,129,737
5,823,757
1,129,737
6,953,494
Weighted
average
interest
rate
Floating
interest
rate
$
Fixed interest
rate maturing
in 1 Year or less
$
Fixed interest
rate maturing
2 to 5 years
$
Non-
interest
bearing
$
Total
$
0.93%
650,448
---
2.53%
---
650,448
390,188
390,188
---
---
---
---
---
---
---
---
---
---
---
---
---
---
1,300
651,748
10,947
401,135
12,247
1,052,883
---
---
296,418
296,418
296,418
296,418
57
Orion Minerals Annual Report 2017
Orion Minerals NL
85
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
18 COMMITMENTS AND CONTINGENCIES
Tenement commitments – South Africa and Australia
The Group has a portfolio of tenements located in South Africa, Western Australia, Queensland and
Victoria, which all have a requirement for a certain level of expenditure each and every year in addition
to annual rental payments for the tenements. Future minimum expenditure commitments as at 30 June
for the Australian tenements held, are as follows:
Within one year
After one year but not more than five years
More than five years
2017
$
1,305,700
6,769,000
---
8,074,700
2016
$
1,500,150
6,676,850
---
8,177,000
Guarantees
The Company has the following contingent liabilities at 30 June 2017:
•
The Group has bank guarantees in favour of the South African Government for rehabilitation
obligations. The total of these guarantees at 30 June 2017 was $ 1,993,413 (2016: nil).
The Group also has negotiated bank guarantees in favour of the Victorian Government for
rehabilitation obligations of mining tenements. The total of these guarantees at 30 June 2017 was
$250,000 (2016: $250,000). The Group has sufficient term deposits to cover the outstanding
guarantees.
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 procedures.
•
•
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
material by the group however this policy will be reviewed as exploration and development activities
increase as the Company moves closer towards commercial production.
Rental property commitments
The Group has entered into a commercial lease for office space in Melbourne, Victoria, for one year
(expiring August 2017) and an office in Kimberley, South Africa for three years (expiring 31 May 2020).
There are no restrictions placed upon the lessee by entering into these leases apart from the 12 month
commitment from the agreement dates.
Future minimum rentals payable under non-cancellable commercial leases as at 30 June are as follows:
Within one year
After one year but not more than five years
More than five years
2017
$
52,855
71,986
---
124,841
2016
$
17,000
2,748
---
19,748
Guarantees
The Company has the following bonds at 30 June 2017:
•
The Group has negotiated guarantees in favour of rental agreements. The total of these guarantees
at 30 June 2017 was $3,117 (2016: $3,117).
58
Orion Minerals Annual Report 2017 86
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
19 CONTROLLED ENTITIES
The consolidated financial statements include the financial statements of the Company and the
subsidiary’s listed in the following table.
Country of
incorporation
Parent Ownership
interest
Non-controlling
interest
2017
%
2016
%
2017
%
2016
%
Entity
Parent Entity
Orion Minerals NL
Subsidiaries
Goldstar Resources (WA) Pty Ltd
Kamax Resources Limited
Areachap Holdings No1 Pty Ltd
Areachap Holdings No 2 Pty Ltd
Areachap Holdings No 3 Pty Ltd
RSA Services Ltd
Areachap Holdings No1 (Mauritius) Ltd
Areachap Holdings No 2 (Mauritius) Ltd
Areachap Holdings No 3 (Mauritius) Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Mauritius
Mauritius
Mauritius
Orion Group Services International Ltd
Seychelles
Agama Exploration & Mining (Pty) Ltd
South Africa
Area Metals No 2 (Pty) Ltd
Area Metals No 3 (Pty) Ltd
Orion Services South Africa (Pty) Ltd
Nabustax (Pty) Ltd
Itakane Trading 217 (Pty) Ltd
Repli Trading No 27 (Pty) Ltd
Rich Rewards Trading 437 (Pty) Ltd
Vardocube (Pty) Ltd
Bartotrax (Pty) Ltd
Prieska Copper Mines Ltd
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
73.33
73.33
70.00
73.33
97.46
100
100
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
26.67
26.67
30.00
26.67
2.54
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
Terms and conditions of transactions with related parties
Sales to and purchases from related parties are made at both market prices and normal commercial
terms.
59
Orion Minerals Annual Report 2017 Orion Minerals NL
87
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
20 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 8)
is as follows:
Short-term employee benefits
Share-based payments
Consolidated
2017
$
974,658
175,620
1,150,278
2016
$
421,200
400,806
822,006
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 is 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.
• On 30 December 2016, the Company issued 25,000,000 Shares at $0.02 per Share to the Company’s
Chairman, Mr Denis Waddell (or nominee) to raise $500,000. The issue of these Shares was approved
by the Company’s shareholders at the Company’s Annual General Meeting held on 30 November
2016.
• On 30 December 2016, the Company issued 5,555,555 Shares at $0.018 per Share to Directors of the
Company (or nominees) to raise $100,000 as approved by the Company’s shareholders at the
Company’s General Meeting held on 14 December 2016. The following Shares were issue to each
Director:
o Mr Errol Smart (or nominee)
o Mr William Oliver (or nominee)
o Mr Alexander Haller (or nominee)
3,333,333
1,111,111
1,111,111
• On 17 March 2017, Silja Investment Limited, an entity associated with Company Director Mr Alexander
Haller, was issued with 9,615,384 Convertible Notes, each with a face value of $0.026, raising $250,000.
Refer to Note 12 for further detail in relation to the Convertible Notes.
60
Orion Minerals Annual Report 2017 88
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
21 AUDITOR REMUNERATION
Amounts received or due and receivable by RSM Australia Partners for:
An audit or review of the financial report of the Company and any other
entity in the Group
Tax compliance
Total amounts for RSM auditors
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
Tax compliance
Total amounts for BDO South Africa auditors
Total amounts for auditors
22 SEGMENT REPORTING
2017
$
2016
$
46,800
7,350
54,150
29,300
7,100
36,400
54,000
---
54,000
---
---
---
108,150
36,400
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 2017 financial
year, the Group has actively undertaken exploration in South Africa, with segment recording from 29
March 2017. No asset or liability, or income in relation to the South African project has been recognised
prior to acquisition in this reporting period.
Reportable segments are represented as follows:
30 June 2017
Australia
$
South Africa
$
Total
$
Segment net operating profit/(loss) after tax
(5,682,690)
(2,247,047)
(7,929,737)
Other revenue – unallocated
Depreciation
Exploration expenditure written off and expensed
---
(21,947)
(434,194)
---
(317)
(3,147,035)
---
(22,264)
(3,581,229)
Segment non-current assets
8,866,870
1,656,691
10,523,561
61
Orion Minerals Annual Report 2017 Orion Minerals NL
89
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
23 PARENT ENTITY DISCLOSURES
As at, and throughout, the financial year ending 30 June 2017 the parent company of the Group was
Orion Minerals NL.
Result of parent entity
Loss for the period
Other comprehensive income
Total comprehensive income for the period
Financial position of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total net assets
Total equity of the parent entity comprising of:
Issued capital
Accumulated losses
Other reserves
Total equity
Company
2017
$
2016
$
(5,682,690)
(1,905,122)
---
---
(5,682,690)
(1,905,122)
3,043,245
19,306,614
1,395,305
7,649,948
620,743
6,445,849
274,192
275,123
12,860,765
7,374,825
85,498,959
75,966,064
(75,547,385)
(69,977,133)
2,909,191
12,860,765
1,385,894
7,374,825
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.
Parent entity commitments in relation to minimum expenditure on tenements
Tenements
Minimum expenditure requirement:
Within one year
One year later and no later than five years
Later than five years
Total
Parent entity commitments in relation to rental property
Commitments
Rental property commitments
62
2017
$
2016
$
1,305,700
6,769,000
---
1,500,150
6,676,850
---
8,074,700
8,177,000
2017
$
2016
$
124,841
19,748
Orion Minerals Annual Report 2017 90
Orion Minerals NL
Orion Minerals NL
Annual Financial Report
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
23 PARENT ENTITY DISCLOSURES (continued)
23 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 18 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 18 for further
detail.
24 SHARE BASED PAYMENTS
24 SHARE BASED PAYMENTS
The Group has an Option and Performance Rights Plan (OPRP) for the granting of options or performance
rights to employees. There were 36,900,000 options granted to employees and consultants during the
financial year (2016: 1,000,000 options) under the Company’s OPRP.
The Group has an Option and Performance Rights Plan (OPRP) for the granting of options or performance
rights to employees. There were 36,900,000 options granted to employees and consultants during the
financial year (2016: 1,000,000 options) under the Company’s OPRP.
Outlined below is a summary of options issued during the year ended 30 June 2017 to employees under
the OPRP:
Outlined below is a summary of options issued during the year ended 30 June 2017 to employees under
the OPRP:
Grant date
Grant date
Expiry
date
Expiry
date
Exercis
e price
Exercis
e price
Balance
at start of
the year
Balance
at start of
the year
Granted
Granted
during the
during the
year (1)
year (1)
Exercise
d during
the year
Exercise
d during
the year
Expired
during
the year
Expired
during
the year
Forfeited
Forfeited
during
during
the year
the year
Balance at
Balance at
end of the
end of the
year
year
Consolidated as at 30 June 2017
Consolidated as at 30 June 2017
31-May-17
31-May-17
31-May-22
31-May-22
$0.030
$0.030
--- 12,300,000
--- 12,300,000
31-May-17
31-May-17
31-May-22
31-May-22
$0.045
$0.045
31-May-17
31-May-17
31-May-22
31-May-22
$0.060
$0.060
--- 12,300,000
--- 12,300,000
--- 12,300,000
--- 12,300,000
26-Nov-15
26-Nov-15
30-Nov-20
30-Nov-20
$0.02 18,333,333
$0.02 18,333,333
26-Nov-15
26-Nov-15
30-Nov-20
30-Nov-20
$0.035 18,333,333
$0.035 18,333,333
26-Nov-15
26-Nov-15
30-Nov-20
30-Nov-20
$0.05 18,333,334
$0.05 18,333,334
5-Jul-13
5-Jul-13
30-Apr-18
30-Apr-18
$0.15
$0.15
1,000,000
1,000,000
5-Jul-13
5-Jul-13
30-Apr-18
30-Apr-18
$0.25
$0.25
1,000,000
1,000,000
5-Jul-13
5-Jul-13
30-Apr-18
30-Apr-18
$0.350
$0.350
1,000,000
1,000,000
5-Jul-13
5-Jul-13
31-May-18
31-May-18
$0.15
$0.15
7,000,000
7,000,000
5-Jul-13
5-Jul-13
31-May-18
31-May-18
$0.25
$0.25
7,000,000
7,000,000
5-Jul-13
5-Jul-13
31-May-18
31-May-18
$0.35
$0.35
7,000,000
7,000,000
24-Sep-13
24-Sep-13
31-May-18
31-May-18
$0.15
$0.15
2,000,000
2,000,000
24-Sep-13
24-Sep-13
31-May-18
31-May-18
$0.25
$0.25
2,000,000
2,000,000
24-Sep-13
24-Sep-13
31-May-18
31-May-18
$0.35
$0.35
2,000,000
2,000,000
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
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
18,333,333
18,333,333
18,333,333
18,333,333
18,333,334
18,333,334
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
7,000,000
7,000,000
7,000,000
7,000,000
7,000,000
7,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
250,000
250,000
250,000
250,000
Total
Total
85,500,000 36,900,000
85,500,000 36,900,000
Weighted average exercise price
Weighted average exercise price
0.110
0.110
0.045
0.045
---
---
---
---
---
---
---
---
---
---
122,400,000
122,400,000
---
---
0.091
0.091
63
63
Orion Minerals Annual Report 2017
Orion Minerals NL
91
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
24 SHARE BASED PAYMENTS (continued)
Grant date
Expiry
date
Exercis
e price
Balance
at start of
the year
Granted
during the
year
Exercised
during the
year
Expired
during
the year
Forfeited
during
the year
Balance at
end of the
year
Consolidated as at 30 June 2016
26-Nov-15
30-Nov-20
$0.02
26-Nov-15
30-Nov-20
$0.035
26-Nov-15
30-Nov-20
$0.05
---
---
---
18,333,333
18,333,333
18,333,334
5-Jul-13
30-Apr-18
$0.15
1,000,000
5-Jul-13
30-Apr-18
$0.25
1,000,000
5-Jul-13
30-Apr-18
$0.350
1,000,000
5-Jul-13
31-May-18
$0.15
7,000,000
5-Jul-13
31-May-18
$0.25
7,000,000
5-Jul-13
31-May-18
$0.35
7,000,000
24-Sep-13
31-May-18
$0.15
2,000,000
24-Sep-13
31-May-18
$0.25
2,000,000
24-Sep-13
31-May-18
$0.35
2,000,000
12-Dec-14
30-Nov-19
$0.045
250,000
12-Dec-14
30-Nov-19
$0.06
250,000
---
---
---
---
---
---
---
---
---
---
---
Total
Weighted average exercise price
30,500,00
0
0.247
55,000,000
0.035
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
18,333,333
18,333,333
18,333,334
1,000,000
1,000,000
1,000,000
7,000,000
7,000,000
7,000,000
2,000,000
2,000,000
2,000,000
250,000
250,000
---
---
85,500,000
0.111
Set out below are the options exercisable at the end of the financial year:
Grant Date
31 May 2017
26 Nov 2015
5 Jul 2013
5 Jul 2013
24 Sep 2013
Total
Expiry Date
31 May 2022
30 Nov 2020
30 Apr 2018
31 May 2018
31 May 2018
2016
2017
12,300,000
---
18,333,333 18,333,333
2,000,000
14,000,000 14,000,000
4,000,000
2,000,000
4,000,000
50,633,333 38,333,333
The fair values of the options are estimated at the date of grant using the Black Scholes option pricing model.
Total expenses arising from share-based payment transactions recognised during the year as part of
employee benefit expense was $195,416 (2016: $419,659).
The weighted average contractual life for the share options outstanding as at 30 June 2017 is between 1 and
4 years (2016: 1 and 4 years).
64
Orion Minerals Annual Report 2017
92
Orion Minerals NL
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
24 SHARE BASED PAYMENTS (continued)
The options granted during the current financial year, the valuation model inputs used to determine the fair
value at the grant date are as follows:
Grant date
Expiry date
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Option exercise price ($0.00)
Share price at grant date ($0.00)
Expected life of option (years)
(A)
31 May 2017
31 May 2022
---
99%
2.00%
$0.030
$0.024
5
(B)
31 May 2017
31 May 2022
---
99%
2.00%
$0.045
$0.024
5
(C)
31 May 2017
31 May 2022
---
99%
2.00%
$0.060
$0.024
5
25 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:
AASMF Loan
On 2 November 2015, Repli (a subsidiary of the Company) and AASMF entered into a loan agreement for the
further exploration and development of the Prieska Project. Under the terms of the loan, AASMF shall
advance R14,25,000 to Repli. The key terms of the agreement are as follows:
•
•
•
•
Loan amount R14,250,000;
Interest rate will be the prime lending rate in South Africa;
The disbursement of the loan will be subject to AASMF notifying Repli that it is satisfied with the results of
the updated scoping study;
Repayment date will be the earlier of 3 years from the date of the advance or on the date which Repli
raises any additional finance for the further development of the Prieska Project; and
• On the advancement of the loan, 29.17% of the shares held in Repli by the Agama group (a wholly
owned subsidiary of Orion), will be pledged as security to AASMF for the performance of Repli's
obligations in terms of the loan.
On 1 August 2017, Repli drew down on the available AASMF loan in full (~$1,350,000 (R14,250,000)).
Bridge Loan Facility and Placement – Tembo
On 18 August 2017, the Company announced that it had issued 73,000,000 Shares at $0.024 per Share to raise
$1,752,000 by way of placement to Tembo (or nominee) and that a $6,000,000 bridge loan facility has been
agreed with Tembo (Bridge Loan Agreement).
Under the terms of Bridge Loan Agreement, Orion has agreed that it will use best endeavours to undertake a
capital raising by 15 December 2017, to raise additional equity to progress the Prieska Project BFS and to
continue its South African exploration programs. Orion has also agreed that Tembo will be offered the
opportunity to participate in the sub-underwriting of any rights issue on standard market terms and conditions.
65
Orion Minerals Annual Report 2017 Orion Minerals NL
93
Annual Financial Report
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2017
25 SUBSEQUENT EVENTS AFTER THE BALANCE DATE (continued)
The key terms of the Bridge Loan Agreement are:
•
•
•
•
•
•
•
Bridge Loan Amount - Up to $6,000,000, available in two $3,000,000 tranches;
Interest - capitalised at 12% per annum accrued daily on the amount drawn down;
Repayment – repayable on the earlier of 15 December 2017 and the completion of a capital
raising(s) whether by way of a pro rata issue and/ or security purchase plan of Shares and/or a
placement or placements of Shares undertaken by the Company to raise such amount as is required,
in Tembo’s reasonable opinion, to progress the Prieska Project BFS, continue exploration programs at
the Company’s South African projects and for working capital (Equity Capital Raising);
Equity Capital Raising - the Company will use its best endeavours to undertake an Equity Capital
Raising before 15 December 2017. Orion shall procure that Tembo (or its affiliate) is offered the right to
underwrite or sub-underwrite any pro rata issue and/or security purchase plan which form part of an
Equity Capital Raising, on standard market terms and conditions;
Set-off under Entitlement Offer – repayment of the Bridge Loan will be set off against the amount to
be paid by Tembo for the issue and allotment of Shares to Tembo under the Equity Capital Raising
and/or at Tembo’s election against the underwriting amount payable by Tembo in respect of any
shortfall under any ‘pro rata issue’ which form part of an Equity Capital Raising in its capacity as
underwriter or sub-underwriter. Any surplus amount owing by Tembo after the set-off will be paid by
Tembo in accordance with the terms of the relevant Equity Capital Raising and the underwriting
arrangements (as applicable);
Establishment fee - capitalised at 5% of the Bridge Loan facility amount; and
Security - the Bridge Loan is unsecured.
As at the date of this report, $3,000,000 had been drawn down against the Bridge Loan.
Johannesburg Stock Exchange
On 18 September 2017, the secondary listing of the Company’s Shares on the main board of the
Johannesburg Stock Exchange (JSE) commenced. Orion’s secondary listing of its Shares is in the “Gold
Mining” sector, under the abbreviated name “ORIONMIN”, JSE share code “ORN” and ISIN “AU000000ORN1”.
The stock code is ORN. The Company’s primary listing remains on the ASX and the Company continues to be
regulated by the Australian Securities and Investment Commission (ASIC).
66
Orion Minerals Annual Report 2017 94
Orion Minerals NL
Directors’ Declaration
Annual Financial Report
1
In the opinion of the directors of Orion Minerals NL (the Company):
(a)
the consolidated financial statements and notes that are set out on pages 56 to 93 and the
Remuneration report set out on pages 44 to 52, 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 2017 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
2
3
4
The directors draw attention to Note 2(a) 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 2017.
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:
Denis Waddell
Chairman
Melbourne, Victoria
28 September 2017
67
Orion Minerals Annual Report 2017
95
Orion Minerals Annual Report 2017INDEPENDENT AUDITOR’S REPORT To the Members of Orion Minerals NLOpinionWe have audited the financial report of Orion Minerals NL. (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30June 2017,the consolidated statement of 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 statements, 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 30June 2017and of its financialperformance for the year then ended; and(ii)complying with Australian Accounting Standards and the Corporations Regulations 2001.Basis for OpinionWe 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 Reportsection of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110Code of Ethics for Professional Accountants(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 tothe 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.Material Uncertainty Related to Going ConcernWe draw attention to Note 2(a) (iii) to the financial reportwhich indicates that the consolidated entity incurred a loss of $7,929,737for the financial year ended 30 June 2017 (2016: loss of $2,528,188). The consolidated entity reported operating net cash outflows for the financial year ended 30 June 2017 of $6,542,963(2016: $2,252,847)These conditions, along with other matters as set forth in Note 2(a) (iii), indicate the existence of a material uncertainty which may cast significant doubt about the consolidated entity’s ability to continue as a goingconcern.Our opinion is not modified in respect of this matter.Key Audit MattersKey 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 theMaterial Uncertainty Related to Going Concernsection, we have determined the matters described below to be the key auditmatters to be communicated in our report. 96
Orion Minerals Annual Report 2017The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30June 2017, but doesnot include the financial report and the auditor's report thereon. Our opinion on the financial report does not cover the other information and accordingly 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 thatthere 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 ReportThe 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 2001and 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 haveno realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial ReportOur 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: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf.This description forms part of our auditor's report. Key Audit MatterHow our audit addressed this matterImpairment of Exploration AssetsRefer to Note 12 in the Consolidated Financial StatementsThe Group has capitalised exploration and evaluation expenditure, with a carrying value of $12.4mas at 30 June 2017.Under AASB 6 Exploration for and Evaluation of Mineral Resources, the Group is required to test the exploration andevaluation asset for impairment when facts and circumstances suggest that the carrying amount may exceed the recoverable amount. We determined this to be a key audit matter due to the significant management judgment involved in assessing the carrying value of the asset.Our audit procedures in relation to the carrying value of exploration and evaluation expenditure included:•obtaining evidence that the Group has validrights to explore in the specific areas of interest;•enquiring with management and reviewing thebasis on which they have determined that theexploration and evaluation of mineral resourceshas not yet reached the stage where it can beconcluded that no commercially viable quantitiesof mineral resources exists;•enquiring with management and reviewingbudgets and plans to determine that the Groupwill incur substantive expenditure on furtherexploration for and evaluation of mineralresources in the specific areas of interest;•reviewing whether management has receivedsufficient data to conclude that the explorationand evaluation asset is unlikely to be recoveredin full from successful development or by sale;and•reviewing previous valuations performed byexperts to further support the carry value of theasset.Acquisition of Agama Refer to Note 12 in the Consolidated Financial StatementsThe Group has acquired 100% of the shares ofAgama Exploration & Mining (based in Kimberley,South Africa) for consideration of $3.3 million in cash, and $1 million of options and $2.2 million of shares in the Company. This acquisition was treated as an asset acquisition and not a business combination, as Agamadoes not meet the definition of a business under AASB 3 Business Combinations.A total of $9.2m has being recognised as an exploration asset in relation to the transaction.We identified this area as a Key Audit Matterdue to the size of the transaction and the judgements involved in valuing the consideration paid and fair value of the net assets acquired. Our audit procedures in relation to acquisitioninclude the following:•reviewing the accounting treatment of theacquisition to ensure that this has beenappropriately reflect in the accountsas anasset acquisition and that the accountingaccurately reflects the terms of the contractof sale; and•critically evaluating management’sdetermination that the acquired entity didnot meet the definition of a business•reviewing the fair value of considerationpaid and net assets acquired ensuring thatit is calculated appropriately and iscompliant with the accountant standards; 97
Orion Minerals Annual Report 2017The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30June 2017, but doesnot include the financial report and the auditor's report thereon. Our opinion on the financial report does not cover the other information and accordingly 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 thatthere 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 ReportThe 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 2001and 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 haveno realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial ReportOur 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: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf.This description forms part of our auditor's report. 98
Orion Minerals Annual Report 2017Report on the Remuneration ReportOpinion on the Remuneration ReportWe have audited the Remuneration Report included the directors' report for the year ended 30June 2017.In our opinion, the Remuneration Report of Orion Minerals NLfor the year ended 30June 2017, complies with section300A of the Corporations Act 2001.ResponsibilitiesThe directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section300A 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. RSM AUSTRALIA PARTNERSJ S CROALLPartnerMelbourne, VICDated: 28September 2017 99
ADDITIONAL ASX INFORMATION
SHAREHOLDER INFORMATION
for the year ended 30 June 2017
Shareholdings
At 30 September 2017, the issued share capital of the Company was held as follows:
Distribution of ordinary and partly paid contributing shareholders and option holders
Fully paid
ordinary shares
No. of
holders
926
242
72
370
344
1,954
No. of
shares
256,575
588,436
544,850
18,913,377
970,837,202
990,420,440
Partly paid
contributing
shares
No. of
holders
-
-
-
3
-
3
No. of
shares
-
-
-
(1)58,775
-
58,775
Options
No. of
holders
-
-
-
-
36
36
No. of
options
-
-
-
-
218,921,464
218,921,464
1 - 1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
(1) At the auction of forfeited partly paid shares held at 10.00am 7 August 2008, no shares were sold. Under the terms of the Company Constitution the shares
will be held by the directors in trust for the Company and then be disposed of in such manner and on such terms as the directors determine.
Holders of non-marketable parcels
Number of fully paid ordinary shareholders with holdings of less than a marketable parcel was 1,334.
Orion Minerals Annual Report 2017 100
ADDITIONAL ASX INFORMATION CONTINUED
The names of the twenty largest holders of ordinary fully paid shares are:
1
2
3
4
5
6
7
8
9
10
11
11
12
13
14
15
16
17
18
19
19
20
Ndouv Capital X BV
DP Waddell S/F A/C
Silja Investments Limited
Independence Group NL
Eastern Goldfields
Power Matla Mining (Pty) Ltd
Tarney Holdings Pty Ltd
Delta Resources Management Pty Ltd
Johannes Nicolaas Hamman
Berend van Deventer
Botsis Holdings Pty Ltd
Perth Select Seafoods Pty Ltd
Kinsella Holdings Ltd
Navigator Australia Ltd
Dr Leon Eugene Pretorius
Ponton Minerals Pty Ltd
Mr Stewart Maxwell Barker
Mr Alexander Haller
BNP Paribas Nominees Pty Ltd
Mr Stefan Haller
Mr Robin Haller
Patina Resources Pty Ltd
Total issued ordinary share capital
Shares held in escrow – included in total share capital
Substantial shareholders
Ordinary
shares
198,000,000
66,982,220
56,706,576
54,166,666
42,433,333
40,322,426
25,559,104
23,567,936
22,788,066
21,590,183
20,000,000
20,000,000
19,366,666
14,533,333
14,000,000
12,603,344
11,850,000
11,120,371
10,868,975
10,009,260
10,009,260
9,999,998
716,477,717
990,420,440
70,741,098
%
19.99%
6.76%
5.72%
5.47%
4.28%
4.07%
2.58%
2.38%
2.30%
2.18%
2.02%
2.02%
1.96%
1.47%
1.41%
1.27%
1.20%
1.12%
1.10%
1.01%
1.01%
1.01%
72.34%
The following shareholders are recorded in the Company’s register of substantial shareholders
Holders giving notice
Ndouv Capital X BV
Silja Investment Ltd(1)
Alexander Haller(2)
Josephine Haller(1)
Denis Waddell
Independence Group NL
Date of notice
17-08-2017
12-02-2014
28-12-2012
12-02-2014
06-01-2017
17-08-2017
Ordinary shares
as at date of notice
% holding
as at date of notice
198,000,000
41,328,114
52,630,362
41,328,114
92,541,324
54,166,666
19.99
20.60
26.20
20.60
14.37
5.47
This information is based on substantial holder notifications provided to the Company.
(1) These substantial holdings relate to the same shares.
(2) A total of 41,328,114 ordinary shares relate to the same shares as Silja Investment Ltd and Josephine Haller.
Voting rights
Ordinary shares
Carry a voting right of one vote per share.
Franking credits
The Company has nil franking credits.
Orion Minerals Annual Report 2017 101
Tenement schedule
Project
Right/Tenement
Status Grant Date Expiry Date
Holder(1) Comments
South Africa
Prieska
Marydale
Prieska
Prieska
Prieska
Prieska
Western Australia
NC30/5/1/1/2/10445PR
NC30/5/1/2/2/10244PR
Granted 08/09/2010 02/11/2019
Granted 10/02/2010 29/02/2020
ORN ORN 73.33%
ORN ORN 73.33%
NC30/5/1/1/2/11840PR Application
NC30/5/1/1/2/11841PR Application
NC30/5/1/1/2/11878PR Application
NC30/5/1/1/2/11850PR Application
Application
Application
Application
Application
Application
Application
Application
Application
-
-
-
-
-
-
-
-
E28/2367
E28/2378
E28/2462
E28/2596
E39/1653
E39/1654
E69/2379
E69/2380
E69/2707
E28/2644
E39/1658
E39/1818
E69/2706
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Queensland
Aurora Flats
EPM19825
Aurora Flats South EPM25283
Mt Mackenzie Sth EPM25122
EPM25763
Aurora Flats
EPM25764
Aurora Flats
EPM25813
Aurora Flats
EPM25703
Aurora Flats
EPM25708
Aurora Flats
EPM25712
Aurora Flats
EPM25714
Aurora Flats
EPM26003
Aurora Flats
EPM26081
Aurora Flats
EPM26082
Aurora Flats
EPM26083
Aurora Flats
Granted 07/05/2015 06/05/2020
Granted 22/07/2015 21/07/2020
Granted 27/07/2015 26/07/2020
Granted 06/09/2016 05/09/2021
Granted 20/04/2012 19/04/2018
Granted 23/04/2012 22/04/2018
Granted 21/05/2013 20/05/2018
Granted 22/05/2013 21/05/2018
Granted 19/06/2015 18/06/2020
IGO
IGO
IGO
IGO
GRPL/IGO
NBX/IGO
PON/IGO
PON/IGO
PON/IGO
KMX 30%
KMX 30%
KMX 30%
KMX 30%
KMX 35%
ORN 10%
ORN 10%
ORN 10%
ORN 10%
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
-
-
-
-
-
-
-
-
2/12/2013
23/9/2014
2/12/2013
14/5/2015
14/5/2015
14/5/2015
1/12/2018
Granted
22/9/2019
Granted
1/12/2018
Granted
13/5/2020
Granted
13/5/2020
Granted
Granted
13/5/2020
Granted 30/10/2015 29/10/2020
Granted 30/10/2015 29/10/2020
Granted 30/10/2015 29/10/2020
Granted 30/10/2015 29/10/2020
Granted 30/08/2016 29/08/2021
Granted 30/06/2016 29/06/2021
Granted 30/06/2016 29/06/2021
Granted 30/06/2016 29/06/2021
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
Orion Minerals Annual Report 2017
102
ADDITIONAL ASX INFORMATION CONTINUED
Project
Right/Tenement
Status Grant Date Expiry Date
Holder(1) Comments
Victoria
Walhalla
Walhalla
Walhalla
Walhalla
Walhalla
MIN5487(2)
EL5340(3)
EL5348
ELA5042
ELA6069
Granted 20/08/2008 19/08/2018
5/06/2016
Granted
5/06/2018
Granted
6/06/2013
6/06/2013
ORN ORN 100%
ORN ORN 100%
ORN ORN 100%
Application
Application
Application
Application
Application
Application
-
-
(1) Holder abbreviations – ORN (Orion Minerals NL); GDR (Goldstar Resources (WA) Pty Ltd); GRPL (Geological Resources Pty Ltd); IGO (Independence
Group NL); KMX (Kamax Resources Limited); NBX (NBX Pty Ltd); PON (Ponton Minerals Pty Ltd).
(2) On 11 August 2015 the Company announced to the ASX that it had entered into a sale agreement with Centennial Mining Ltd (formerly A1 Gold) for
Centennial Mining Ltd to acquire MIN 5487.
(3) Renewal of licence application is with relevant government department.
Orion Minerals Annual Report 2017
Orion Minerals NL
Orion Minerals Annual Report 2017
Annual Financial Report
103
Corporate Directory
DIRECTORS
SHARE REGISTRY
Mr Denis Waddell (Non-Executive Chairman)
Mr Errol Smart (Managing Director/CEO)
Mr William Oliver (Non-Executive Director)
Mr Alexander Haller (Non-Executive Director)
Link Market Services Limited
QV1, Level 2, 250 St Georges Terrace
Perth, Western Australia 6000
Telephone: +61 1300 306 089
COMPANY SECRETARY
Mr Martin Bouwmeester
REGISTERED OFFICE AND PRINCIPAL
PLACE OF BUSINESS
Suite 617
530 Little Collins Street
Melbourne, Victoria, 3000
CONTACT DETAILS
Telephone: +61 (0)3 8080 7170
Website: www.orionminerals.com.au
AUDITOR
RSM Australia Partners
55 Collins Street
Melbourne, Victoria 3000
STOCK EXCHANGE
Primary listing:
Australian Securities Exchange (ASX)
ASX Code: ORN
Secondary listing:
JSE Limited (JSE)
ORN
JSE Code:
SOLICITORS TO THE COMPANY
JSE SPONSOR
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth Western Australia 6000
Merchantec Capital
2nd Floor, North Block
Corner 6th Road & Jan Smuts Avenue
Hyde Park
Johannesburg 2196
1
Orion Minerals NL
Suite 617
530 Little Collins Street
Melbourne, Victoria, 3000
T: +61 (0)3 8080 7170
www.orionminerals.com.au