Developing a 21st century South African base metals business
ANNUAL REPORT
2019
29
Cu
Copper
30
Zn
Zinc
28
Ni
Nickel
27
Co
Cobalt
ASX: ORN | JSE: ORN
A BO UT THIS REPORT
This Annual Report is a summary
of the operations, activities and
performance of Orion Minerals
Limited ABN 76 098 939 274 and
its financial position for the period
ended 30 June 2019.
In this report, unless otherwise stated,
references to Orion Minerals or Orion
and ‘the Company’, ‘we’, ‘us’ and ‘our’
refer to Orion Minerals Limited.
Monetary amounts in this document are
reported in Australian dollars (AUD, $),
unless otherwise stated.
Forward-looking statements
This report may include forward-looking statements.
Such forward-looking statements may include, among
other things, statements regarding targets, estimates
and assumptions in respect of metal production
and prices, operating costs and results, capital
expenditures, mineral reserves and mineral resources
and anticipated grades and recovery rates, and are or
may be based on assumptions and estimates related to
future technical, economic, market, political, social and
other conditions. These forward-looking statements
are based on management’s expectations and beliefs
concerning future events. Forward-looking statements
inherently involve subjective judgement and analysis
and are necessarily subject to risks, uncertainties and
other factors, many of which are outside the control
of Orion. Actual results and developments may vary
materially from those expressed in this report.
Given these uncertainties, readers are cautioned
not to place undue reliance on such forward-looking
statements.
Orion makes no undertaking to subsequently update
or revise the forward-looking statements made in this
release to reflect events or circumstances after the
date of this report.
information
All
in respect of exploration results
and other technical information should be read in
conjunction with Competent Person Statements in this
report (where applicable).
To the maximum extent permitted by law, Orion and
any of its related bodies corporate and affiliates and
their officers, employees, agents, associates and
advisers, disclaim any obligations or undertaking to
release any updates or revisions to the information to
reflect any change in expectations or assumptions, do
not make any representation or warranty, express or
implied, as to the accuracy, reliability or completeness
of the information in this report, or likelihood of
fulfilment of any forward-looking statement or any
event or results expressed or implied in any forward-
looking statement and disclaim all responsibility and
liability for these forward-looking statements (including,
without limitation, liability for negligence).
CORPOR ATE
DIRECTO RY
COMPANY SECRETARY
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
SHARE REGISTRY
Link Market Services Limited
QV1, Level 2, 250 St Georges Terrace
Perth, Western Australia 6000
Telephone: +61 1300 306 089
AUDITOR
BDO East Coast Partnership
Level 18, Tower 4
727 Collins Street
Docklands, Victoria 3008
STOCK EXCHANGE
Primary listing:
Australian Securities Exchange (ASX)
ASX Code: ORN
Secondary listing:
JSE Limited (JSE)
JSE Code: ORN
JSE SPONSOR
Merchantec Capital
2nd Floor, North Block
Corner 6th Road & Jan Smuts Avenue
Hyde Park
Johannesburg 2196
FINDING, PLANNING
AND BUILDING THE
MINES OF
THE FUTURE
Orion Minerals is a minerals
exploration and development
company focusing on copper, zinc,
nickel, cobalt, gold and silver as
well as platinum group metals in
South Africa and Australia
Listed on the Australian
Securities Exchange (ASX: ORN) with
a secondary listing on the Main Board
of the Johannesburg Stock Exchange
(JSE: ORN)
Scan the QR code to download the PDF.
ANNUAL REPORT
2019
www.orionminerals.com.au
CONTEN TS
Section 1: CORPORATE PROFILE
Orion at a glance
Orion projects in South Africa and Australia
Strategy
Prieska Project: an introduction
Section 2: LEADERSHIP
Chairman’s statement
Chief Executive’s review
Board of directors
Senior management
Section 3: BUSINESS REVIEW
Safety, health and environment
Corporate social responsibility
Review of operations
South Africa
Prieska Project
Near mine exploration
Regional exploration
Australia
Ore reserve and mineral resource statements
Corporate
Section 4: FINANCIAL STATEMENTS
Directors’ report
Auditor’s independence declaration
Consolidated statement of profit or loss and other
comprehensive income
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to financial statements
Directors’ declaration
Independent auditor’s report
Additional ASX information
3
5
6
8
12
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16
17
20
22
25
27
45
50
54
55
61
64
81
82
83
84
85
86
124
125
129
1
ANNUAL REPORT 2019
SECTION
1
CORPORATE
PROFILE
Orion Minerals focuses on world-class Volcanogenic
Massive Sulphide multi-commodity mineral deposits to
meet increasing industrial demand fueled by ongoing
technological innovation
2
Corporate profile
OR IO N AT A GLANCE
Diversified exploration and development company
with projects in South Africa and Australia
VALUES
Primary listing on Australian Securities Exchange
(ASX: ORN), secondary listing on the Johannesburg
Stock Exchange (JSE: ORN)
Prioritising employee
health and safety
Flagship Prieska Copper-Zinc Project in the
Areachap Terrane, Northern Cape, South Africa
Landmark black economic empowerment
agreement completed
Committed to community
engagement and
corporate social
responsibility
Exceptional exploration and growth pipeline
ON TRACK
Orion Minerals is a globally diversified metal
explorer and developer which is on track
to become a new generation base metals
producer through the development of its
flagship Prieska Copper-Zinc Project (Prieska
Project) in South Africa’s Areachap geological
terrane, in the Northern Cape province.
The highly prospective Areachap Terrane
provides Orion with a world-class exploration
pipeline with its characteristic Volcanogenic
Massive Sulphide (VMS) that contains copper-
zinc and intrusive nickel-copper-cobalt-PGE
(platinum group elements) mineralisation. There
has been virtually no exploration in the region
for more than three decades. In Australia,
Orion has an exploration joint venture with
Independence Group (ASX: IGO) in the world-
class Fraser Range Province.
Orion’s biggest shareholder is London-based
Tembo Capital.
Promoting technology
advancement
Driving education and
skills development
Adopting a
pioneering spirit
3
ANNUAL REPORT 2019 Corporate profile
OR IO N AT A GLANCE continued
ORION’s investment case for the Prieska Project
THE OREBODY
• Globally significant VMS Resource: 30.49Mt @ 1.2% Cu, 3.7% Zn
• Mineral Reserve: 13.62Mt @ 1.06% Cu, 3.18% Zn
FOUNDATION PHASE BANKABLE FEASIBILITY STUDY OUTCOMES
• Initial 10-year, 2.4Mtpa operation targeting 22ktpa Cu and 70ktpa Zn
• Strong operating margins and financials
KEY achievements in 2019
• Foundation Phase bankable feasibility study (BFS) completed June 2019 on 2.4Mtpa
underground and open pit mining operation at Prieska Project
• Post BFS trials, optimisation and operational readiness activities underway
• Final investment decision targeted for H2 FY2019
• Project approvals nearing completion, with Repli Environmental Authorisation granted post
year end in July 2019 and Repli Mining Right granted in August 2019
• Strengthened growth pipeline through Ayoba discovery
• Landmark black economic empowerment agreement completed
• Drilling commenced on Fraser Range Targets
• Anglo American sefa Mining Fund becomes a shareholder
• Employee and community trusts established for Prieska Project
• Post year end on 2 September 2019, Masiqhame received Ministerial consent for the transfer of
controlling interest to Orion
4
Corporate profile
OR IO N P R OJECTS IN SOUTH AFRICA AN D A USTRAL IA
JOHANNESBURG
PRETORIA
UPINGTON
SISHEN
KIMBERLEY
GAMSBERG
BLACK MOUNTAIN
PRIESKA
PRIESKA
PROJECT
SALDANHA
CAPE TOWN
PORT ELIZABETH
DURBAN
Towns
Railways
Project area
FRASER RANGE PROJECT:
Western Australia
SOUTH AFRICAN OFFICES:
Johannesburg, Gauteng
Kimberley, Northern Cape
AUSTRALIA HEAD OFFICE:
Melbourne, Victoria
AUSTRALIA
SOUTH AFRICA
Prieska Project, Northern Cape
Total Mineral Resource of
30.49Mt @ 1.2% Cu and 3.7% Zn
ANNUAL REPORT 2019
5
5
ANNUAL REPORT 2019 Corporate profile
STRATEGY
VALUE GROWTH
PROJECT
VISION
PROGRESS
STRATEGY
Prieska
Project
(South Africa)
To fast-track
to operational
readiness
and mine
construction
• More than 80,000 metres of drilling resulted in JORC Mineral Resource of 30.49Mt @ 1.2% Cu,
3.7% Zn
• Completed BFS in June 2019, based on a 10-year Foundation Phase 2.4Mtpa underground and
open pit mining operation, delivering total payable metal production of 189kt of copper and 580kt
of zinc in differentiated concentrates
• Post BFS trials, optimisation and operational readiness activities underway
• Post year end, on 3 July 2019, the Repli Environmental Authorisation was granted by the DMRE.
This was followed by the awarding of the Repli Mining Right on 23 August 2019. Approval for the
Vardocube Environmental Application and Mining Right is expected in FY2020
Development
projects
(South Africa)
To maximise
the opportunity
provided by
the world class
Areachap
minerals belt
• Focused ongoing explorational program
• Secured mid-tier miner, Independence Group (ASX: IGO), as strategic partner
• IGO have preferential rights should Orion decide to joint venture or sell any of its nickel projects
• IGO increased its shareholding in ORN to 8% through a $5 million share placement
• Airborne electromagnetic survey (AEM) identified several high priority targets for follow-up work
• Ayoba VMS discovery, a zinc-copper bearing massive sulphide body discovered towards the end
of 2018. Discovery drill hole intersected 9.5 metres of massive sulphides grading 0.63% Cu and
0.93% Zn, including 1.50 metres at 0.89% Cu and 4.98% Zn. Ayoba represents the first new VMS
discovery in the Areachap Belt in over 36 years. Drilling continued in 2019
• Ongoing drilling designed to further increase and
upgrade the Prieska Project Mineral Resource
Orion is endeavouring to
fast track the development
of the mine. The latest
technology and modern
mining methods will be
used to identify additional
mineral resources
• Continue to pursue regional exploration
opportunities surrounding Prieska
• Masiqhame and Namaqua-Disawell provide
significant potential to operate as satellite deposits
to Prieska in the future
• Progress highly prospective regional nickel-copper-
cobalt and zinc-copper projects
• Secured a mid-tier miner, Independence Group (ASX: IGO) as a joint venture partner in 2017
• Targeting ultramafic nickel/copper discoveries
• Free carried to completion of pre-feasibility study
• IGO responsible for all exploration on the tenements, providing regular updates to Orion of its
activities and results
• Drilling program begun to test two high-priority targets: North West Passage for intrusive hosted
nickel-copper and Pike Prospect for nickel-copper intrusive mineralisation and VMS copper-
zinc mineralisation
Fraser Range
(Australia)
To leverage
existing joint
venture
partner
6
THROUGH FOCUSED EXPERTISE
AND DEVELOPMENT
PROJECT
VISION
PROGRESS
STRATEGY
Prieska
Project
(South Africa)
To fast-track
to operational
readiness
and mine
construction
3.7% Zn
• More than 80,000 metres of drilling resulted in JORC Mineral Resource of 30.49Mt @ 1.2% Cu,
• Completed BFS in June 2019, based on a 10-year Foundation Phase 2.4Mtpa underground and
open pit mining operation, delivering total payable metal production of 189kt of copper and 580kt
of zinc in differentiated concentrates
• Post BFS trials, optimisation and operational readiness activities underway
• Post year end, on 3 July 2019, the Repli Environmental Authorisation was granted by the DMRE.
This was followed by the awarding of the Repli Mining Right on 23 August 2019. Approval for the
Vardocube Environmental Application and Mining Right is expected in FY2020
Development
To maximise
• Focused ongoing explorational program
projects
(South Africa)
the opportunity
provided by
the world class
Areachap
minerals belt
• Secured mid-tier miner, Independence Group (ASX: IGO), as strategic partner
• IGO have preferential rights should Orion decide to joint venture or sell any of its nickel projects
• IGO increased its shareholding in ORN to 8% through a $5 million share placement
• Airborne electromagnetic survey (AEM) identified several high priority targets for follow-up work
• Ongoing drilling designed to further increase and
upgrade the Prieska Project Mineral Resource
Orion is endeavouring to
fast track the development
of the mine. The latest
technology and modern
mining methods will be
used to identify additional
mineral resources
• Continue to pursue regional exploration
opportunities surrounding Prieska
• Masiqhame and Namaqua-Disawell provide
significant potential to operate as satellite deposits
to Prieska in the future
• Progress highly prospective regional nickel-copper-
• Ayoba VMS discovery, a zinc-copper bearing massive sulphide body discovered towards the end
cobalt and zinc-copper projects
of 2018. Discovery drill hole intersected 9.5 metres of massive sulphides grading 0.63% Cu and
0.93% Zn, including 1.50 metres at 0.89% Cu and 4.98% Zn. Ayoba represents the first new VMS
discovery in the Areachap Belt in over 36 years. Drilling continued in 2019
• Secured a mid-tier miner, Independence Group (ASX: IGO) as a joint venture partner in 2017
• Targeting ultramafic nickel/copper discoveries
Fraser Range
To leverage
(Australia)
existing joint
venture
partner
• Free carried to completion of pre-feasibility study
• IGO responsible for all exploration on the tenements, providing regular updates to Orion of its
activities and results
zinc mineralisation
• Drilling program begun to test two high-priority targets: North West Passage for intrusive hosted
nickel-copper and Pike Prospect for nickel-copper intrusive mineralisation and VMS copper-
Orion’s strategy is to focus on world-class VMS multi-commodity
mineral deposits to meet increasing industrial demand fueled by ongoing
technological innovation.
The Company has targeted geological terranes known for VMS potential
and shortlisted world class mineral provinces, where modern exploration
techniques would then be applied to prove its mining potential. This
search has resulted in Orion securing large consolidated land packages,
as Mining Rights, Prospecting Rights or under statutorily-acknowledged
applications (3,000km2), in the proven Areachap Minerals Belt in South
Africa. This includes the Prieska Project, as well as highly prospective
zones with VMS copper-zinc, intrusive nickel-copper sulphides and
precious metals potential.
The Prieska Project brings additional upside for Orion shareholders –
due diligence of historical data shows unmined mineral resources exist
around the current infrastructure footprint that includes a primary shaft
(1,024m deep) in addition to links to power, transport and water. Fast-
tracking development of these projects will deliver on Orion’s growth
strategy as mine development and time to market are significantly
reduced. This offers the potential for more rapid returns for shareholders,
which are generally not typical of early-stage exploration companies.
Hutchings Shaft at Prieska Project
7
ANNUAL REPORT 2019 Corporate profile
P RI ES KA PROJECT: AN INTRODUCTION
THE PRIESKA
PROJECT
The P rieska Proj ect in t h e No rt her n
Cape i n Sou th Afri ca is Ori on ’s
flagship pr oject an d i s pavin g t he
wa y for fur th er expl o ratio n of t h e
valua ble, geo log i call y-ri ch Area chap
Belt , which has been u n der-exp lo r ed
ove r the pas t 35 years .
The Prieska Project is a globally-significant VMS Resource
of 30.49Mt at 1.2% Cu, 3.7% Zn. The Project’s BFS was
completed in the second quarter of CY2019, based on an initial
10-year, 2.4Mtpa mining operation targeting 20-24ktpa Cu,
70-80ktpa Zn. Project approvals are nearing completion, with
both the Environmental Authorisation and the Mining Right for
the Repli portion of the deposit granted. The project investment
decision is expected by late 2019/early 2020.
8
Prieska’s existing infrastructure
• Sealed access roads to project site
• 50km tar road to existing rail siding
• Four high-voltage regional lines linked to the national
electricity grid
• 175MW operational solar power plants in the area – with
an additional 675MW approved and a further 300MW
pending authorisation
• 800km rail link to major bulk commodity and deep-
water ports at Coega and Saldanha Bay
• Bulk water pipeline supplies site from Orange River with
all-year pumping capacity
• Good contractor accommodation available in the private
village of Copperton, ~3km from project site
The area’s infrastructure is sound with intact power and water
supplies, and roads. Based on the world-class orebody at
Prieska, the exploration results being generated and the
benefits of the existing infrastructure, Orion is endeavouring to
fast track the development of the mine. The latest technology
and modern mining methods will be used to identify additional
mineral resources.
After the Prieska mine closed in 1991, the communities and
industry in the area, the closest of which is 65km from the
project site, were left isolated. Orion is fully committed to a wide-
ranging community engagement program in preparation for a
revitalisation of the region, with a focus on skills and enterprise
development. For more information, see Corporate social
responsibility on page 22.
BEE partnership
a
its
and
deal
BEE
black
Orion
2019,
equity
further
pivotal
capital
August
strengthened
In
economic
empowerment (BEE) partnership by introducing Safika Resources,
a prominent BEE mining and exploration company, as a key BEE
partner at Prieska. The agreement followed Orion’s announcement
of
in
participation
April 2019 and sees Safika Resources included as a shareholder
alongside
Orion’s
BEE holding company. Prieska Resources will hold a 20% stake
in the project. Safika Resources joins founding BEE partners Black
Star Minerals and Kolobe Nala Investment Company as holders in
Prieska Resources. All of Orion’s BEE partners will be aligned as
risk
shareholders
listed
and
See
reward
Corporate
with
section on page 61 for more information.
equity
shareholders.
ASX-JSE
terms
the
equal
Resources,
members
founding
at
on
Prieska
sharing
raising
Orion
other
level,
the
the
of
9
ANNUAL REPORT 2019
Corporate profile
P RI ES KA PROJECT: AN INTRODUCTION cont inued
Environmental footprint
The Prieska Project encompasses the historic Prieska Copper Mine whose footprint was rehabilitated and a mine closure certificate
issued in 1995. The project area is thus regarded as having low environmental sensitivity given this previous mining activity.
The Northern Cape province, being a water-scarce region, relies heavily on the Orange and Vaal Rivers for its water supply. The Project
area is well served by a pipeline from the Orange River and the dryness of the region means a dry mine, with low groundwater inflows
into mine excavations. In line with Orion’s commitment to sustainable operations, water treatment trials have been commissioned to
investigate ways to maximise the use of accumulated groundwater and so best apply available water resources.
Cuprum Substation at the Prieska Project Site, offering access to the national power grid
Renewable energy supply for Prieska
A collaboration agreement is in place that provides the
framework for advancing the plan to have over 50% of Prieska’s
power needs supplied from renewable energy sources.
The collaboration agreement was signed with the leading
global renewable energy company juwi Renewable Energies
(Pty) Ltd in March 2019 with a preliminary scope to assess the
feasibility of establishing a dedicated solar and wind hybrid
power plant for the Project. The results of this work will inform
the Project’s long-term power supply strategy and are in line
with local government Integrated Development Plans (IDPs).
The agreement fits in with the Company’s strategy to make
best use of its geographic advantage in the semi-arid
Northern Cape province of South Africa. This region has the
highest irradiance levels in the country with its hot, dry climate
and is also very well-suited for wind farms. It is already a well-
established renewable energy generating region with 190MW
of solar power plants in operation and 240MW of wind power
currently under construction immediately adjacent to the
Prieska Project.
Implementing this renewable energy plan will improve Orion’s
long-term power supply security, lessening the burden on the
national electricity grid and reducing the Company’s carbon
and water footprint.
“Our decisi on to pu rsue
renew able power suppl y
opti ons is another ill ustrati on
of our commitmen t to b ui ld a
modern 21st centur y mine at
Pri eska that employs in novative
technol ogies and embraces
sustai nabi lity. Investing i n a
long-term renewable energy
solution also makes perfect
sense for a long-l ife production
asset such as Pri eska.”
Errol Smart, Managing Director and CEO
Developing the renewable energy potential of the region is
also a strategic goal of local government, as communicated
in its IDPs. Orion and juwi intend to continue to work closely
with local government, under the auspice of the collaboration
agreement entered into with the Siyathemba Municipality in
October 2017, to maximise the employment and enterprise
development in local communities.
10
SECTION
2
LEADERSHIP
This year has been a significant one for Orion
Minerals – the culmination of three years of
exploration and engineering studies, stakeholder
engagements and sheer determination to get the
Prieska Project back on the map
ANNUAL REPORT 2019
1111
ANNUAL REPORT 2019 Leadership
CH AI R MAN’S STATEMENT
Or io n’s co mm itme n t to t he d ev elo pm ent of
the Pri esk a P roj ect goe s we l l b e y on d t he
te ch nic al asp ects of c om plet in g t he B F S.
Ou r tea m h as a lso en ga ged in in te n s iv e
co mm uni ty rel ati ons hip s d ur ing th e p a s t
thre e y ear s w hich ar e d es i gned to p r o v id e
tr ai nin g, edu cat ion an d re ad ine s s f o r di r ect
and i nd ire ct emp lo ym en t op por tu nit ie s .
Denis Waddell
Chairman
I a m pl eased t o report o n wh at has
been another except ion al ly bu s y and
posi ti ve year fo r Ori on , du rin g which
we hav e ach ieved major mi les to nes
towa rds becom in g a di vers ifi ed
meta l miner an d explorer.
Given our achievements, we are now on track to become a
new generation base metals producer through the development
of our flagship Prieska Copper-Zinc Project in South Africa’s
Areachap geological terrane, in the Northern Cape.
The constant and demanding workload successfully undertaken
Orion’s commitment to the development of the Prieska Project goes
well beyond the technical aspects of completing the BFS. Our team
has also engaged in intensive community relationships during the
past three years which are designed to provide training, education
and readiness for direct and indirect employment opportunities.
These initiatives are ongoing.
In addition, Errol has committed considerable time as a member
of the Minerals Council of South Africa which has successfully
negotiated the positive outcomes reflected in the new Mining
Charter. Errol’s role has been significant and has resulted in a
robust yet constructive relationship with the Department of
Mineral Resources and Energy.
by our Managing Director, Errol Smart; Chief Operating Officer,
We have also negotiated a very positive restructuring of our BEE
Walter Shamu; and our leadership team, culminated in the
obligations with a very strong BEE partnership now in place
completion of a very positive BFS in June 2019 followed by the
which meets Mining Charter 3 obligations. Importantly, this
grant of the Prieska Mining Right in August 2019. Both these
restructuring includes the establishment of the Employee and
achievements position the Company for major transformation.
Community Trusts for the Prieska Project.
POSITIVE
Orion on the cusp of becoming a
base metals producer
12
We are now focusing our attention on post BFS trials,
optimisation studies and operational readiness. With Project
financing negotiations underway, we are working towards a final
investment decision by the end of 2019.
In addition to the flagship Prieska Project, the Company has
a large ground package in the Areachap Belt of the Northern
Cape, which is highly prospective for VMS copper-zinc and
intrusive nickel-copper-cobalt-PGE sulphide discoveries.
Many advanced targets generated from Orion’s major regional
airborne geophysical surveys have been and will continue to
be drill tested. We are very encouraged by the results to date
and by the potential to make further significant base metal
discoveries in this under-explored region.
The highly prospective Areachap Terrane provides Orion with
a world-class exploration pipeline. In addition, Orion has an
exploration joint venture with Independence Group (ASX:
IGO) in the world-class Fraser Range Province in Australia.
Numerous targets on the Orion/IGO joint venture ground,
which is also prospective for VMS copper-zinc and intrusive
nickel-copper mineralisation, are currently being drill tested by
IGO. Orion is free carried to pre-feasibility on the Orion/IGO
joint venture ground.
On behalf of the Board of Directors, I would like to thank Errol
and his dedicated team for their significant achievements
during the past year.
I also welcome Tom Borman and Godfrey Gomwe as new
Board members and thank my fellow directors for their
contribution and support and you, our shareholders, for your
ongoing support of the Company.
Denis Waddell
Chairman
13
ANNUAL REPORT 2019 Leadership
Leadership
CH IEF EX ECUTIVE’S REVIEW
W ith full de velop ment targeted in ear ly
2 020, sub ject to secur ing of fin ancing and
a final inv estment decis ion, the Pr ies k a
Pr oject is the platfor m for us to p r og r es s
t he de velop ment of what will be a new -
g ener ation m ining p roject for S outh Af r ica.
Errol Smart
Chief Executive Officer
It ’s be e n a n exh il arati n g year –
pe rha ps t he mo s t si g n if ican t i n
Orion Miner als ’ h is tor y, wi th h u g e
stride s taken to deli ver ou r fl ag s hip
Prie ska Copp er-Zin c P roject as a
de velo pmen t read y ass et.
But as many of you know, this is not just the story of 12 months
but rather the culmination of three years of exploration and
engineering studies, stakeholder engagements and sheer
determination to get this project back on the map.
Each of the months preceding the awarding of the Mining Right
were used to progress the project along its pathway. Among
the many milestones achieved this year were the granting of
the Environmental Authorisation and the release of a positive
BFS. We also restructured and grew our support base of top-
class BEE investors and engaged in very intense community
engagement programs.
Completed in June, the BFS confirmed what we have long
believed – that Prieska represents a highly valuable strategic
asset with the potential to become a significant source of
high-quality copper and zinc concentrates under conditions of
rapidly-growing demand in global markets.
The marked progress made during the year was rewarded post
year end when Orion subsidiary Repli, holder of the Prieska
Project, was granted a Mining Right by the South African
Department of Mineral Resources and Energy. This much
anticipated permitting milestone is key to the development of
the project and is a testament to the Company’s growth over the
past few years.
As detailed further in this report, the BFS demonstrates that Prieska
will be a high-margin, long-life asset, delivering an estimated
AUD1.1 billion of pre-tax free cash flow during the first 10-year
Foundation Phase. With a payback period of just under three years
from first production, the project yields a pre-tax Net Present Value
of AUD574 million (at an 8% discount rate) and an all-in-sustaining
operating margin of 44% during the 10-year Foundation Phase.
PROGRESS
Each of the months preceding the awarding of the Mining Right were used
to progress the project along its pathway.
14
Its low unit operating costs also mean the project would remain
profitable in a depressed metal price environment. We are in a
perfect state, the copper production is subsidised and almost
paid for by zinc production, making this an exceptionally low-
cost copper production asset.
Importantly, there is also ample scope to significantly extend the
mine life by embarking on drilling programs to test beyond the
current limits of the resource, which remains open at depth and
along strike and has also been shown to host satellite deposits
in the near-mine hinterland.
With full development targeted in early 2020, subject to securing
of financing and a final investment decision, the Prieska Project
is the platform for us to progress the development of what will be
a new-generation mining project for South Africa.
Backed by a strong group of BEE investors with host communities
and employees invested in the Company through trusts that will
directly benefit them and their families, we like to think the project
has become the poster child for junior mining in South Africa,
demonstrating the potential for revival of and modernisation of
the South African mining sector.
There is no denying that South Africa still has some of the best
untested geological potential in the world. Furthermore, Prieska
is one of the few permitted, mid-tier base metal development
assets globally and is well positioned to become a hub for base
metals production supplying into the world’s growing demand
for green metals.
We are delighted with Prieska’s progress and look forward to the
next chapter in this journey.
I would like to thank the Orion team and our service providers for
their ongoing tireless efforts. Special recognition and thanks go
to our Chairman, Denis, for his ongoing guidance and support
and our stellar leadership team for their significant contribution to
what has been a watershed year.
Errol Smart
Chief Executive Officer
15
ANNUAL REPORT 2019 Alexander Haller
Non-Executive Director
Alexander is a partner of Zachary Capital Management, providing
advisory services to several private investment companies,
including Silja Investment Ltd, focusing on principal investment
activities. From 2001 to 2007 Alexander worked in the corporate
finance division at JP Morgan Chase & Co. in the USA, as an
advisor on mergers and acquisitions, and financing, in both
equity and debt capital markets.
Godfrey Gomwe
Non-Executive Director
Godfrey is the former chief executive officer of Anglo American’s
Thermal Coal business, where his responsibilities included
oversight of the company’s manganese interests in the joint
venture with BHP. Until August 2012, Godfrey was an executive
director of Anglo American South Africa, where he held the
positions of head of group business development Africa, finance
director and chief operating officer. He was also chairman and
chief executive of Anglo American Zimbabwe Limited and served
on a number of Anglo American operating boards and executive
committees including Kumba Iron Ore, Anglo American Platinum,
Highveld Steel & Vanadium and Mondi South Africa.
Mark Palmer
Non-Executive Director
Mark has 13 years of experience working with entities in
Australia, including eight years with Dominion Mining. He
previously worked with NM Rothschild & Sons Limited for
the London mining project as part of the finance team where
he was responsible for assessing mining projects globally. He
later moved to the investment banking team at UBS, where
his focus was global mergers and acquisitions, and equity and
debt financing. He also ran the EMEA mining team at UBS, later
joining Tembo Capital in 2015 as investment director.
Leadership
BOA RD OF DIRECTORS
BOARD OF DIRECTORS
Denis Waddell
Chairman
Errol Smart
Managing Director and
Chief Executive Officer
Tom Borman
Non-Executive Director
Alexander Haller
Non-Executive Director
Godfrey Gomwe
Non-Executive Director
Mark Palmer
Non-Executive Director
Denis Waddell
Chairman
Denis is a chartered accountant with more than three decades of
experience in corporate finance and management of exploration
and mining companies. He founded Tanami Gold NL in 1994
where he was first managing director, then chairman and non-
executive director until 2012. Prior to this, Denis was finance
director of the Metana Minerals NL group.
Errol Smart
Managing Director and Chief Executive Officer
Errol is a geologist, registered for JORC purposes. He has some
25 years of industry experience across all aspects of exploration,
mine development and operation, with a key focus on gold
and base metals throughout Africa and in Australia. Errol has
held positions in African Stellar, LionGold Corporation, Clarity
Minerals, Metallon Gold, Cluff Mining and AngloGold.
Tom Borman
Non-Executive Director
Tom is a highly-experienced global mining executive who
served more than 11 years working for the BHP Billiton
Group in various senior managerial roles, including that of
chief financial officer. He also held senior roles in strategy and
business development, and served as the project manager for
the merger integration transaction between BHP Limited and
Billiton. After leaving BHP Billiton in 2006, Tom joined Warrior
Coal Investments, where he was part of the executive team
which established the portfolio of assets which became the
Optimum Group of companies.
16
Leadership
S ENI O R MANAGEMENT
SENIOR MANAGEMENT
Errol Smart
Managing Director and
Chief Executive Officer
Walter Shamu
Chief Operating Officer
Martin Bouwmeester
Chief Financial Officer
and Company Secretary
Michelle Jenkins
Executive: Finance and
Administration
Louw van Schalkwyk
Executive: Exploration
Nelson Mosiapoa
Group Corporate Social
Responsibility Advisor
Marcus Birch
Commercial and
Business Support
Manager
Pottie Potgieter
Geology Manager
Pieter Roux
Group Financial
Controller
Errol Smart
Managing Director and Chief Executive Officer
Errol is a geologist, registered for JORC purposes. He has some
25 years of industry experience across all aspects of exploration,
mine development and operation, with a key focus on gold and
base metals throughout Africa and in Australia. Errol has held
positions in African Stellar, LionGold Corporation, Clarity Minerals,
Metallon Gold, Cluff Mining and AngloGold.
Walter Shamu
Chief Operating Officer
Walter is a mining engineer with a BEng (Mining Engineering) and
a Masters in Engineering (Rock Mechanics) from Curtin University
as well as an LLB (Law) from Macquarie University in Australia.
He spent 12 years in the Australasian mining industry with Henry
Walker Eltin, Western Mining and Gold Fields before moving to
South Africa, where he has held technical and corporate roles with
Gold Fields, ERG and Taurus Gold on exploration projects, mine
development and mining operations throughout Africa.
Martin Bouwmeester
Chief Financial Officer and Company Secretary
Martin is an FCPA with over 20 years’ industry experience in
exploration, mine development and operation. He was previously
the chief financial officer, business development manager and
company secretary of Perseverance Corporation Limited. Martin
was a key member of the team that successfully completed
feasibility studies, funding and development of the Fosterville Gold
Mine in Australia.
Michelle Jenkins
Executive Finance and Administration
Michelle is both a geologist and a chartered accountant with over 20
years’ experience in exploration and mining. She holds an Honours
Degree in Geology from the University of the Witwatersrand and
BSc Hons in Accounting Science from the University of South Africa.
Michelle has substantial experience working as a geologist prior to
joining KPMG’s mining group as a chartered accountant. She was
also the chief financial officer at Taurus Gold and held the role of
chief financial officer with several exploration and mining companies
throughout Africa. She was previously a director within the Clarity
Capital Group and an executive director of Pangea Exploration.
Michelle offers a wealth of knowledge in resource risk management
and mitigation as well as strategic leadership and has been involved
in operating resources ventures.
Louw van Schalkwyk
Executive: Exploration
Louw holds a BSc Geology Honours degree from the University
of Stellenbosch. He started his career as a geologist with Gold
Fields of South Africa, then worked as an exploration consultant
for Anglo American. He served as technical director on the boards
of two junior exploration companies before joining Vedanta Zinc
International. Louw specialises in structural and exploration
17
ANNUAL REPORT 2019 Leadership
S ENI O R MANAGEMENT continued
geology and was part of the team that discovered the 60 Mt
Gamsberg East Zinc Deposit in 2005, which is one of the
highlights of his career. Other notable achievements include the
discovery and drill out of the 250,000oz Byumba Gold deposit in
Rwanda in 2008.
Nelson Mosiapoa
Group Corporate Social Responsibility Adviser
Nelson studied chemical engineering at the Cape Peninsula
University of Technology. As an advanced policy scholar of science
and technology, he served on the policy unit of the governing
party in South Africa prior to the first democratic elections. His
professional career started at Sasol Petroleum as a gasification
process controller and then a learner official at Anglo American/De
Beers. He is also the founder and trustee of the Mosiapoa Family
Trust, a private and investment equity company in the resources
sector with assets featured on the JSE.
Marcus Birch
Commercial and Business Support Manager
Marcus holds a BSc Honours Geology degree from the University
of Exeter and a BCom from the University of South Africa. He has
over 25 years’ experience in the mining and minerals exploration
industry, initially as a geologist in the South African gold mining
sector. Marcus subsequently moved into the field of procurement
and supply chain with Anglo Gold Ashanti, where he led a team of
commodity specialists. During the last decade, Marcus has held
senior general management positions in the junior exploration
sector, with Clarity Minerals and High Power Exploration,
responsible for the establishment and growth of minerals service
companies and the management of the logistical aspect of
exploration projects across Africa, Australia and South America.
Pottie Potgieter
Geology Manager
Pottie obtained an MSc Exploration Geology at Rhodes University
and is registered with the South African Council of Natural Scientific
Professionals, a Recognised Overseas Professional Organisation
for JORC purposes. He has 17 years of exploration experience
with Gold Fields of South Africa and was the chief geologist and
mineral resources manager for Black Mountain Mining from 1995
until retiring in 2016. During his time at Black Mountain, Pottie was
part of the feasibility teams responsible for the development of the
Broken Hill Deeps Mine and the Gamsberg Zinc Mine.
Pieter Roux
Group Financial Controller
Pieter holds a BCom (Management Accounting) and DipICIMA.
He has 15 years’ experience in finance team leadership and
management in mining and exploration in Zimbabwe, Zambia,
Namibia and South Africa. Pieter has implemented and operated
real-time web-based financial control systems for companies
across the African continent. He has also developed various funding
models, applied for fund raising, budgeting and operational control
purposes. Most recently, Pieter has worked with Taurus Gold as
group financial controller, providing leadership within the finance
team and management reporting for the Taurus Gold Group.
Prior to that he was the finance unit manager for Evraz Highveld &
Vanadium’s Mapochs Mine and group management accountant for
Clarity Capital Group.
18
SECTION
3
BUSINESS
REVIEW
Orion Minerals believes that the development of the
Prieska Copper-Zinc Project will be a catalyst to the
economic and socio-economic revival underway in
South Africa’s Northern Cape province
ANNUAL REPORT 2019
19
19
ANNUAL REPORT 2019 BUSINESS REVIEW
S AF ETY, HEALTH AND ENVIRONME NT
The hi gh stan dard o f workplace
safet y and h ealth man agemen t
perfor mance on all Compan y
projec ts con tin u ed in 2019, w it h no
lost- ti me inju ries repo rted du rin g
the ye ar. A z ero l o st- time i n ju r y
freque ncy r ate w as ach i eved. H ealth
and safety man agemen t f ocu se d on
maint aining th e relevan t Co mpany
he alth and safet y s ys tems as
activi ti es at th e vari o u s w ork s i t es
and workf orce profi les tran s iti o ned
rapidl y thro ug h th e di ffer en t ph as es
of e xpl or atio n an d mi n in g s tu dies .
An aggregate of approximately 205,000 hours was worked on
project sites throughout the year.
Category of work
FY 2019 (hours)
Exploration
Mine re-entry
Total
195,962
9,439
205,401
Prieska Project
In line with Orion’s commitment to industry-wide safety and Zero
Harm, a number of safety initiatives were undertaken throughout
the year including the observance of the inaugural National Day
of Safety and Health in Mining Day in August 2018 as promoted
by the Minerals Council South Africa. The event, attended by
200 staff and contractors, aimed to re-emphasise that safety
in the workplace was every individual’s responsibility and to re-
affirm employees’ legal rights to leave a dangerous workplace
without being prejudiced.
Though still largely an exploration site, scheduled inspections
and record keeping by statutory appointees for the Prieska
Project continued, to a standard normally reserved for fully-
operational, producing mine sites.
Proactive and cooperative engagement with statutory authorities
was maintained, with representatives of the Department of
Mineral Resources and Energy (DMRE) invited for familiarisation
tours of the Prieska Project site. Advice on improving hydrocarbon
management received from the DMRE has been incorporated
into general site work practices, as have guidelines on regulatory
mine health and safety practices.
As the Prieska Project falls inside a legislated zone around the
Square Kilometre Array (SKA) radio telescope project, the South
African Astronomy Management Authority (AMA), the governing
body managing the SKA, places operating restrictions on the
electromagnetic emissions from any equipment to be used at
the Project site. Constructive engagement with AMA resulted
in the authorities approving, in April 2019, the Electromagnetic
Capability (EMC) Plan for the Prieska Project. The EMC Plan
details how electromagnetic emissions from equipment planned
for use in the mining operations would be managed so that it
does not interfere with the operation of the SKA radio telescope.
This EMC Plan approval is an important milestone to obtaining
full AMA approval for mining operations to proceed.
Committing to health and safety at the Minerals Council Safety Day at the Prieska Project
20
Orion works with the community to help preserve the historic and
culturally-significant Kopje site near Prieska
Community Arbour Day initiative in Prieska town
Dust monitoring station with the Hutchings Shaft in the background
21
ANNUAL REPORT 2019 Key predicted social impacts of the
Prieska Project
Employment creation
• Estimated that 900 people will be employed
by the mine
• Empirical multiplier effect potentially creates
2,500 associated jobs
• This could absorb 15% of total unemployed and
underemployed in Siyathemba
Increase in Gross Domestic Product
• District GDP increase of at least 20% expected
under optimal mining conditions
• Combined multipliers may improve local
economy by 30%
• Local sourcing of select services
Create the potential for beneficial multipliers
• Mine support services will develop locally
• Increase in residents promoting
infrastructure upgrades
• Stimulation of related synergic industries
Local and BEE enterprise development
• Creation of opportunities for local entrepreneurs
BUSINESS REVIEW
CO RP O RATE SOCIAL RESPONSIBILITY
Orion is a catalyst for socio-economic development
South Africa’s Northern Cape province has the potential for a
mining boom, particularly in new technology and green energy
minerals like copper and zinc. A rebirth of this historic mining
region would translate into increased social upliftment, and Orion
believes that the development of the Prieska Project will be a
catalyst for both the economic and socio-economic revival of
the region.
The Company’s
relationships with
leadership considers
local communities as equally important as the technical and
commercial needs of the organisation and to this end, has
worked hard at establishing and maintaining stakeholder
engagement ahead of the Project’s development. As the
Project progresses through construction and into production,
the Company will work with the community to ensure that
they share in the value created by the Project’s presence in
the region. Through responsible corporate citizenship, the
Company seeks sustainable socio-economic approaches
to the challenges facing those who are impacted by the
Company’s operations.
A catalyst for socio-economic development, Orion
Minerals’ community development initiatives are
centred on:
Sustainability
Entrepreneurship
Impact
Focus
22
Independent renewable energy solar projects close to the Prieska Project
Community and stakeholder engagement
the Company continued
During
the 2019 financial year,
local government and
constructive engagements with
communities
for mine development and
revitalisation of the Siyathemba Municipal area within the
Northern Cape province.
in preparation
Community participation is vital to the success of the business
and the Company has proactively hosted open public meetings
to inform the community of the Company’s progress and intended
work plans. Orion has received an enthusiastic local response
to its planned operations and will continue to seek community
involvement as these projects progress.
In the 2019 financial year, Orion formalised its commitment
to community participation by setting up a Stakeholder
Engagement Forum (SEF). The process was initiated by a public
participation workshop, which was held in February. Facilitated
by human resources and community development consultancy
Beulah Africa, the workshop attracted more than 250 members
of the community from Prieska, Marydale and Niekerkshoop.
the workshop,
Through
the community nominated SEF
representatives and eight key representative roles were identified
based on community needs, these being: education, social
development, unemployed, skilled elders, sports and recreation,
safety and security, religious groups and business. All five
administrative wards making up the Siyathemba Municipality are
represented in the SEF.
Nominated community representatives have been allocated
almost half of the seats on the SEF, with the balance of the 20
seats being filled by representatives of local government, Orion’s
BEE shareholders, employees and Company management.
The SEF will serve as a platform for representative community
interest groups to keep appraised of developments at the Prieska
Project. The inaugural meeting of the newly-established SEF was
held in July 2019 at which representatives identified areas where
they and the Company can work together more closely.
Engagement with local authorities
Collaboration between the Company and the Siyathemba
Municipality continued throughout the 2019 financial year and
good progress has been made towards the delivery of several
initiatives identified in terms of a Memorandum of Understanding
(MoU) signed in October 2017.
This MoU is used as a formal framework for the parties to
establish mutually-beneficial ventures. This year’s collaboration
with the municipality focused on water infrastructure upgrades
and residential development to accommodate the Prieska
Project plans.
During the year the parties progressed with the formulation of the
terms of collaborating on water supply infrastructure upgrades and
use, with the aim of concluding an agreement before year end.
This water supply agreement will set out water tariffs and specific
scopes of work for water infrastructure upgrades.
To secure a long-term water supply for the Prieska Project, the
Company agreed to upgrade the municipal waterworks to meet
the project’s requirements. This arrangement is expected to benefit
the community at large.
Discussions regarding a mining residential development continued
into the year after initial consultation with the Siyathemba
Municipality, landowners and various technical service providers
were initiated late in 2018.
A Spatial Planning and Land Use Management Act application
process was initiated during the year with the aim of securing town
planning permissions for the development of this residential area
within the Prieska town surrounds.
Siyathemba Municipality MoU
Strategic focus
Infrastructure
Residential
development
Education
Enterprise
development
Initiatives
Water
Works
Renewable
energy
Residential
planning
Skills
development
Community
Liaison Centre
Improve
local water
supply
Renewable power
generation
Initiatives
Accelerate
available
housing
Upskilling internal
and external
participants
Develop local
businesses
23
ANNUAL REPORT 2019 BUSINESS REVIEW
CO RP O RATE SOCIAL RESPONSIBILITY cont inued
Preparing the community for the Prieska Project
The Company successfully held introductory mining familiarisation
short courses during the year, with participation and successful
completion by 290 high school graduates from the Siyathemba
Municipal area. The program was aimed at raising public awareness
of the mining industry and the employment opportunities the
industry creates.
The five-day short courses were offered free of charge in Prieska,
Marydale and Niekerkshoop, to residents who have completed
their grade 12 and have an interest in mining.
Course attendees were provided with:
• an overview of minerals mined in South Africa;
• an insight into how mining operations are conducted;
• an understanding of the career options available within the
mining industry; and
• a visit to the Prieska Project, where they got
to witness first-hand the early phases of a mine
development project.
The training was facilitated by an accredited service provider,
Mathome Training and Development (Pty) Ltd, and participants
earned credits
industry-recognised mining-related
qualifications. This initiative is in line with Orion’s firm commitment
to ensure that local communities benefit from its operations.
towards
The initiative was exceptionally well received, and the Company
was encouraged by the number of residents that applied to
attend. The training was the first step in the process to equip
residents with skills that will enable them to participate in future
mining-related job opportunities at the Project. Assessments
will be carried out to identify candidates for further training. The
Company will also consider running a second round of training
in the future.
Orion’s new generation base metals mine at Prieska will require
a highly-skilled workforce. The operation aims to prioritise local
employment wherever possible and the Company is confident
that its presence will encourage entrepreneurship and the
establishment of mining-related businesses in the region.
While the Company has not started recruitment, it has introduced
a career portal to its website. The portal will be used for posting
vacancies and encouraging potential employees to submit
their CVs. Vacancies are also advertised through social media
platforms.
To support the stimulation of economic growth through enterprise
development, the Company continued to encourage potential
local suppliers of goods and services to register online via the
Supply Chain Network (SCNet) portal. Like the Career Portal, this
portal redirects potential suppliers to an internet-based supplier
registration and enterprise development platform. SCNet then
collects the details of potential suppliers, whose capabilities can
later be assessed to fulfil the future requirements of the mine.
By the end of the 2019 financial year, over 115 businesses were
registered, of which 65 were in the Siyathemba area.
(NGOs)
At the end of 2018, the Company arranged an educational
seminar for small, medium and micro-sized enterprises (SMMEs)
and non-governmental organisations
in Prieska.
Seminar presenters included the Department of Economic
Development and Tourism, South African Revenue Services
and the Industrial Development Corporation. The event was
well attended with more than 70 representatives from the
Prieska business and NGO communities. Orion intends to
continually invest in skills development and the facilitation of local
enterprise development.
Prieska Project Social and Labour Plans (SLPs)
Endorsed by the Siyathemba Municipal Council in March 2018,
and further refined through engagement with the municipality
and DMRE during the year, Orion’s SLPs have been updated to
include inputs from these stakeholders. The SLP encompasses
the Company’s commitments to local economic development
and the skilling of its workforce when mining operations
commence. The SLP is an integral and mandatory component
of all mining right applications.
An intensive Prieska Project drilling campaign was completed in 2018
24
BUSINESS REVIEW
REV IE W OF OPERATIONS
South Africa
Areachap Belt Projects – a summary
Figure 1: Location of Prieska Project
Orion’s operational efforts for the year have focused
primarily on advancing its flagship project, the
Prieska Project in the Northern Cape, South Africa.
Work to consolidate the Areachap Belt tenements
and
relative
prospectivity of these areas was also undertaken
throughout the year.
improve understanding of
the
The Prieska Project is situated approximately
290km south-west of the city of Kimberley. The
Project encompasses the historic Prieska Copper
Mine which was operated between 1971 and
1991 as a profitable underground mine. Mining
operations exploited parts of the Prieska deposit
tonnes of copper and
to produce 430,000
in concentrates1
1.01 million tonnes of zinc
with
remaining
known deposit
unmined at mine closure
(refer ASX release
15 November 2017).
extensions
Johannesburg
Pretoria
Upington
Sishen
Kimberley
Gamsberg
Black Mountain
Prieska
PRIESKA
PROJECT
Saldanha
Cape Town
Port Elizabeth
Durban
Towns
Railways
Project area
Work also continues at the Marydale gold-copper project,
where historical geological data is being re-interpreted and the
economic potential of the targets re-assessed.
The Prieska deposit is a VMS style deposit of which the full
extent of copper and zinc mineralisation is yet to be determined.
In October 2018, Orion completed a verification and infill drilling
campaign that aimed to confirm and quantify those portions of
the Prieska deposit that had been identified though not extracted
during previous mining operations. The drilling campaign resulted
in the delineation of both near-surface and deeper underground
copper and zinc Mineral Resources, all estimated, classified and
reported in accordance with JORC 2012 guidelines.
By June 2019, the Company had completed a BFS based
on the delineated Mineral Resource to establish a new mining
operation in the footprint of the previous Prieska Copper Mine,
premised on using the extensive mine servicing infrastructure still
in place. Work is in progress to advance the BFS towards mine
construction.
In addition to mine development studies, further exploration work
targeting VMS style copper-zinc deposits has been ongoing to:
• follow the mineralised extensions of the Prieska deposit;
• assess the brownfields, near-mine potential in the vicinity of
the Prieska Project; and
• assess the greenfields, regional potential further afield to
the north of the Prieska deposit, within the prospective
Areachap Belt.
Orion is also exploring for mafic hosted nickel-copper deposits
on the Masiqhame and Namaqua-Disawell tenements, where
field mapping, soil geochemical analyses, diamond drilling and
geophysical surveying have been and continue to be undertaken
on high potential nickel targets.
1 Not a JORC compliant figure. Source: Prieska Copper Mines Limited Annual Report 1970
A member of Orion’s geological team examines core at the Prieska Project
25
ANNUAL REPORT 2019 BUSINESS REVIEW
REV IE W OF OPERATIONS continued
South Africa conti nued
Figure 2: Orion projects in the Areachap Belt with the Prieska Project location highlighted
26
BUSINESS REVIEW
REV IE W OF OPERATIONS continued
South Africa (Prieska Project)
PRIESKA PROJECT
Bankable Feasibility Study outcomes
The Prieska Project remains the primary focus of Orion’s activities.
A BFS was completed on the Project and published on 26 June
2019 (refer ASX release 26 June 2019). The BFS investigates
both underground and open pit mining methods, along with
associated ore processing, establishment of supplementary
mine infrastructure, environmental, community and social impact
studies and product sales arrangements.
Key outcomes from the BFS are listed below:
• Undiscounted free cash flows of AUD1.1 billion pre-tax
(AUD819 million post-tax)
• NPV of AUD574 million pre-tax (AUD408 million post-tax) at
an 8% discount rate
• IRR of 38% pre-tax (33% post-tax)
• Peak funding requirement of AUD378 million
• Payback period from first production of 2.9 years
• All-in-sustaining margin of 44%
• All-in-sustaining unit costs of AUD5,470/t (USD3,773/t) of
copper-equivalent metal sold
• A maiden Probable Ore Reserve of 13.62Mt at 1.1% Cu
and 3.2% Zn for 143kt of contained copper and 433kt of
contained zinc
• Total planned milled production of 20.8Mt at 1.1% Cu and
3.4% Zn (comprising 65% Probable Ore Reserves and 35%
Inferred Mineral Resources)
The BFS investigated the commercial viability of an initial
10 years of mining operation (Foundation Phase). The Foundation
Phase would result in the establishment of mine infrastructure and
operational capacity that is intended to become the platform for
further mining of deposit extensions, as well as the exploration and
mine development of neighbouring prospects.
The Foundation Phase targets a design ore processing rate of
2.4Mtpa. The Production Target is composed of 65% Probable
Ore Reserves and 35% Inferred Mineral Resources, with Ore
Reserves predominating during the early stages of the mining
plan. The Ore Reserves and Mineral Resources underpinning
the Production Target have been prepared by Competent
Persons in accordance with the requirements in the JORC
Code (2012) (refer ASX release 26 June 2019).
The core handling and storage facility based at the Prieska Project
27
ANNUAL REPORT 2019 BUSINESS REVIEW
REV IE W OF OPERATIONS continued
South Africa (Prieska Project) continued
Table 1: Summary of main production results, financial results and assumptions used in the BFS
Production and financial summary
Model: OR + IMRE
Executive dashboard
Price and FX assumptions
Unit
Value Financial performance
Unit
Value
Metal price – Cu
Metal price – Zn
Exchange rate
Exchange rate
Exchange rate
Production metrics
Life of Mine
Treatment plant capacity
ROM plant feed – tonnage
ROM plant feed – grade – Cu
ROM plant feed – grade – Zn
Overall plant recovery – Cu
Overall plant recovery – Zn
Concentrate tonnage – Cu
Concentrate tonnage – Zn
USD/t
6,834 NPV pre-tax (post-tax) @ 8% discount rate
AUD million
574 (408)
USD/t
2,756 IRR pre-tax (post-tax)
%
38 (33)
ZAR:USD
14.5:1 Payback from first production
years
2.9
ZAR:AUD
10:1 Undiscounted free cash flow pre-tax (post-tax) AUD million 1,127 (819)
AUD:USD
1.45:1 Peak funding
AUD million
378
Unit
Value Project cost metrics
Unit
Value
Years
Mtpa
9.7 Average cash operating unit cost (C1)
2.4 All-in-sustaining cost per unit ROM t
AUD/t
AUD/t
kt
%
%
%
%
kt
kt
20,827 All-in-sustaining cost per unit Cu_Eq t sold
AUD/t Cu
1.10 All-in-sustaining cost per unit Zn_Eq t sold
AUD/t Zn
3.35 Price received (net of NSR) – Cu
82.7 Price received (net of NSR) – Zn
83.0 All-in-sustaining margin
790 Operating breakeven grade (Cu_Eq)
1,180 Level of accuracy of financial model: ± 15%
AUD/t Cu
AUD/t Zn
%
%
Concentrate grade – Cu U/G (O-Pit)
% 23.8 (25.6)
LoM = Life of Mine
RoM = Run of Mine
Concentrate grade – Zn U/G (O-Pit)
% 49.9 (35.5)
NSR = Net Smelter Return
NPV = Net Present Value
NSR as % of metal price – Cu U/G (O-Pit)
% 98.7 (91.2)
IRR = Internal Rate of Return
NSR as % of metal price – Zn U/G (O-Pit)
% 71.3 (53.7) Project cash flows
Metal sold (in concentrates) – Cu
tonnes
189,000 LoM net revenue
Unit
AUD million
Metal sold (in concentrates) – Zn
tonnes
580,000 LoM operating costs (+ royalty and tax)
AUD million
Total sales as Cu equivalent
tonnes
357,000 Project start-up capital expenditure
Total sales as Zn equivalent
tonnes 1,233,000 Sustaining capital expenditure
AUD million
AUD million
There is a low level of geological confidence associated with Inferred Mineral Resources included in the Production Target and there is no certainty
that further exploration work will result in the determination of Indicated Mineral Resources or that the Production Target or financial forecast
information will be realised.
Ownership and mineral tenements
Through subsidiary companies, Repli Trading No 27 (Pty) Ltd
(Repli) and Vardocube (Pty) Ltd (Vardocube), Orion will hold a 70%
interest in both the Repli Prospecting Right and the Vardocube
Prospecting Right, after reducing its shareholdings in line with
South African policy relating to BEE (refer ASX releases 16 April
2019 and 3 June 2019). Together these tenements encompass
the Prieska Project.
The remaining ownership of the Project is to be held by BEE
companies (20%), a community trust (5%) and an employee trust
(5%), as guided by legislative and Mining Charter 3 prescriptions
for promoting transformation.
Applications for the Environmental Authorisation, Mining Right,
Integrated Waste and Water Management Plan licence and
Integrated Water Use Licence for the Repli project area were
submitted to the relevant authorities in April 2018 (refer ASX
release 9 April 2018). Applications for the Vardocube project area
were submitted in September 2018. This suite of permits, the
first two of which were granted post FY2019, clears the way
for mine construction to commence subject to funding and
investment approval.
28
80
94
5,470
1,582
9,785
2,830
44
1.2
Value
3,284
1,673
402
83
Figure 3: Mineral tenement map for the Project area
Figure 4: Geological cross-section through the Prieska Deposit (modified
after Theart et al, 1989 and Wagner and Van Schalkwyk, 1986)
Existing infrastructure
Despite the Project site being located in a remote part of South
Africa, with no nearby large human settlements, it is well-serviced
by infrastructure that was established for the previous mining
operation. Existing infrastructure includes a water pipeline from
the Orange River, tarred roads, national grid power supply and a
1.7km-long air strip. The village of Copperton, which is located
4km by road from the main rock hoisting shaft, used to be the
principal residence for the Prieska Copper Mine community. The
town is still in use, though only 40 of the original 300 houses
remain. The farming service town of Prieska, with a population of
16,000, lies 60km north-east of the Project site. The operating
rail siding of Groveput, located 50km from the Project site, en
route to the town of Prieska, provides rail access to the main
Kimberley-De Aar railway line.
The main hoisting shaft, which is 1,024m deep, 8.8m in diameter
and concrete-lined, along with associated concrete headgear,
remain intact. New infrastructure, such as rock-and-materials
winders, underground rock-handling facilities, an ore processing
plant and related surface infrastructure, is designed to be
purpose-built for the new mine. The mine is currently flooded to
a depth of 330m below surface and 14 months of pumping is
planned to dewater the mine.
Geology and Mineral Resources
The Prieska Deposit is a VMS-style deposit, with mineralisation
defined along 2.4km of a northwest-southeast trending strike
extent and down to a depth of 1.25km. Mineralisation of copper
(Cu), zinc (Zn), silver (Ag) and gold (Au) is in massive sulphides
distributed as a persistent lens within gneiss rock assemblages.
29
ANNUAL REPORT 2019 BUSINESS REVIEW
REV IE W OF OPERATIONS continued
South Africa (Prieska Project) continued
By the time the mine closed, the deposit had been exploited to a depth of 900m below surface. However, strike and dip
extensions had been identified, Mineral Resource Estimates prepared, and access development partially established into some
of the deposit extensions.
Orion used the extensive catalogue of historical data to guide its verification and infill drilling campaigns on both the near-surface +105
Level supergene deposit (+105 Level Deposit) and the Deep Sulphide hypogene deposit (Deep Sulphide Deposit). These programs
culminated in the declaration of Mineral Resources estimated in accordance with the 2012 addition of the Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) for both the Deep Sulphide Mineral Resource and the +105
Level Mineral Resource. The Mineral Resources estimate was updated and Ore Reserves were estimated and reported during FY2019,
as tabled individually below (refer ASX releases 18 December 2018 and 15 January 2019).
Table 2: Mineral Resource Estimate – Deep Sulphide Resource
Deep Sulphide Mineral Resource for Repli + Vardocube Tenements (Effective Date: 15 December 2018) 1
Classification
Tonnes
Cu (metal tonnes)
Cu (%)
Zn (metal tonnes)
Zn (%)
Tenement
Repli
Vardocube
Indicated
15,052,000
Inferred
6,998,000
Total
22,050,000
Indicated
Inferred
Total
3,455,000
3,221,000
6,676,000
Deep Sulphide Total
Indicated
18,507,000
Inferred
10,219,000
Total
28,726,000
170,000
80,000
249,000
44,000
41,000
85,000
217,000
117,000
334,000
1.15
1.09
1.13
1.27
1.27
1.27
1.17
1.14
1.16
510,000
270,000
779,000
158,000
147,000
305,000
667,000
417,000
1,084,000
3.38
3.86
3.53
4.57
4.56
4.57
3.60
4.08
3.77
Deep Sulphide Resource bottom cut-off = 4% Equivalent Zn. Mineral Resources stated at zero % cut-off. Tonnes are rounded to
thousands, which may result in rounding errors.
Table 3: Mineral Resource Estimate – +105 Level Mineral Resource
+105 Updated Mineral Resource for the Repli Tenement (Effective Date: 11 January 2019) 2
Classification
Mineralised Zone
Tonnes
Cu (metal tonnes)
Cu (%)
Zn (metal tonnes)
Indicated
Supergene
Inferred
Total
Oxide
Supergene
624,000
624,000
511,000
627,000
Total
1,138,000
10.000
10,000
3,000
14,000
17,000
Total
+105
Mineral Resource
1,762,000
27,000
1.54
1.54
0.6
2.2
1.5
1.5
19,000
19,000
4,000
11,000
16,000
35,000
Zn (%)
3.05
3.05
0.9
1.8
1.4
2.0
+105m Level Mineral Resource bottom cut-off = 0.3% Cu. Mineral Resources stated at zero % cut-off. Tonnes are rounded to
thousands, which may result in rounding errors.
1 Mineral Resource reported in ASX release of 18 December 2018: “Landmark Resource Upgrade Sets Strong Foundation” available to the public
on www.orionminerals.com.au/investors/market-news. Competent Person Orion’s exploration: Mr. Errol Smart. Competent Person: Orion’s Mineral
Resource: Mr. Sean Duggan. Orion confirms it is not aware of any new information or data that materially affects the information included above. For
the Mineral Resources, the Company confirms that all material assumptions and technical parameters underpinning the estimates in the ASX release
of 18 December 2018 continue to apply and have not materially changed. Orion confirms that the form and context in which the Competent Person’s
findings are presented here have not materially changed.
2 Mineral Resource reported in ASX release of 15 January 2019: “Prieska Total Resource Exceeds 30Mt @ 3.7% Zn and 1.2% Cu Following Updated
Open Pit Resource” available to the public on www.orionminerals.com.au/investors/market-news. Competent Person Orion’s exploration: Mr. Errol
Smart. Competent Person: Orion’s Mineral Resource: Mr. Sean Duggan. Orion confirms it is not aware of any new information or data that materially
affects the information included above. For the Mineral Resources, the Company confirms that all material assumptions and technical parameters
underpinning the estimates in the ASX release of 15 January 2019 continue to apply and have not materially changed. Orion confirms that the form
and context in which the Competent Person’s findings are presented here have not materially changed.
30
Table 4: Mineral Resource Estimate – Combined
Combined Prieska Project Mineral Resource for Repli + Vardocube Tenements (Effective Date: 11 January 2019)
Mineral Resource
Classification
Tonnes
Cu (metal tonnes)
Cu (%)
Zn (metal tonnes)
Zn (%)
Deep
Resource
+105m
Resource
Total
Grand total
Sulphide
Indicated
18,507,000
Inferred
10,219,000
Level
Indicated
624,000
Inferred
1,138,000
Indicated
19,131,000
Inferred
11,357,000
30,488,000
217,000
117,000
10,000
17,000
227,000
134,000
361,000
1.17
1.1
1.54
1.4
1.18
1.2
1.2
667,000
417,000
19,000
16,000
686,000
433,000
1,119,000
3.60
4.1
3.05
1.4
3.59
3.8
3.7
Deep Sulphide Resource bottom cut-off = 4% Equivalent Zn; +105m Level Mineral Resource bottom cut-off = 0.3% Cu. Mineral
Resources stated at zero % cut-off. Tonnes are rounded to thousands, which may result in rounding errors.
The Mineral Resources are inclusive of Ore Reserves.
Satellite deposit potential has been demonstrated with recent intersections of sulphide mineralisation at Ayoba, 5km from the proposed
Prieska ore processing plant. Further afield, available historical data and recent exploration work by Orion has confirmed the existence
of numerous follow-up massive sulphide copper-zinc rich targets within the nearby mineral tenements also held by Orion (refer ASX
releases 16 January 2019 and 25 February 2019).
Ore reserves and mine plan
Both open pit and underground mining are planned for the duration of the Foundation Phase (see Figure 5). Underground mining is
planned to commence on completion of mine dewatering, shaft refurbishment and underground infrastructure establishment, some
24 months from site mobilisation. Underground mining is then scheduled to build up over 14 months to a steady-state run-of-mine
production rate of 200ktpm (kilo tonnes per month) or 2.4Mtpa (million tonnes per annum).
Figure 5: Project mine production profile
r
a
e
y
r
e
p
s
e
n
n
o
t
d
e
e
f
t
n
a
P
l
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Underground
Open pit
31
ANNUAL REPORT 2019
BUSINESS REVIEW
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South Africa (Prieska Project) continued
Mining of Ore Reserves has been prioritised in the production schedule, with Inferred Mineral Resources contributing no more than 21%
in the first eight years of production. Thereafter, the remainder of the Inferred and Indicated Mineral Resources evaluated in Mine Stope
Optimiser and Whittle Pit Optimisation is incorporated into the plan (see Figure 6).
Figure 6: Production profile illustrating the comparative contributions from Ore Reserves, Indicated Mineral Resources and Inferred Mineral Resources
r
a
e
y
r
e
p
i
d
e
n
m
s
e
n
n
o
T
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Ore reserves
Inferred in design
Inferred in MSO+Pitshell
Tunnel development remaining from the previous mining operations allows for early access to underground production mining areas.
A combination of Longhole Open Stoping with Fill (LHOSF) and Drift-and-Fill (D&F) mining methods will be used, supported with paste
back-filling. Some low-profile, D&F mining is planned in the latter years, along with open pit mining of the near-surface +105 Level
Supergene Deposit in the last two years of the Foundation Phase.
Figure 7: Planned underground mining zones
32
Figure 8: Longitudinal section showing location of proposed open pit and voids
Some 20.8Mt of material at an average grade of 1.1% Cu and 3.4% Zn is planned to be mined and processed to produce 189kt of
Cu and 580kt of Zn contained in differentiated concentrates during the Foundation Phase.
Probable Ore Reserves, make up 65% of the Production Target. Inferred and Indicated Mineral Resources incorporated in the detailed
mine plans make up 21% of the Production Target. Inferred and Indicated Mineral Resources make up the remaining 14%. The
Probable Ore Reserves are tabulated below.
The estimated Deep Sulphide Probable Ore Reserve amounts to 13.14Mt grading 1.0% Cu and 3.2% Zn, including 136kt copper
metal tonnes and 417kt zinc metal tonnes (copper equivalent of 257kt metal tonnes at 2.0%). The Ore Reserves are reported and
classified in accordance with the guidelines of the JORC Code, 2012 (refer ASX release 26 June 2019).
Table 5: Ore Reserve Estimate for the Deep Sulphide Mineral Resource
Prieska Project Deep Sulphide Ore Reserves (Effective Date: 16 June 2019)
Cu
Zn
Cu equivalent 1
Deposit
Deep Sulphide
Total
Ore Reserve
classification
Tonnage
(Mt)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Probable
Probable
13.14
13.14
136
136
1.0
1.0
417
417
3.2
3.2
257
257
Grade
(%)
2.0
2.0
Deep Sulphide Ore Reserves calculated using financial assumptions and modifying factors stated in the Study. Tonnes are rounded
to thousands, which may result in rounding errors.
The estimated +105 Level Probable Ore Reserves amount to 484kt grading 1.5% Cu and 3.3% Zn, including 7kt copper metal tonnes
and 16kt zinc metal, (Cu-Eq of 11kt metal at 2.2%). The Ore Reserves are reported and classified in terms of the JORC Code, 2012
(refer ASX release 26 June 2019).
1 Method used to determine Cu equivalent Zn grades:
1% Zn = (Zn price x Zn payability) x (Zn plant recovery) = (2,756 x 71.3%) x (84.4%) = 0.29% Cu grade
(Cu price x Cu payability) (Cu plant recovery) (6,834 x 98.7%) (83.9%)
Cu Equivalent Grade = Cu Grade + 0.29 x Zn Grade
Plant recovery assumptions are based on metallurgical test work completed to date at Mintek Laboratories (South Africa) under the supervision of DRA.
33
ANNUAL REPORT 2019 BUSINESS REVIEW
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South Africa (Prieska Project) continued
Table 6: Ore Reserve Estimate for the +105 Level Mineral Resource
Prieska Project +105 Level Ore Reserves (Effective Date: 15 June 2019)
Cu
Zn
Cu equivalent 1
Deposit
+105 Level
Total
Ore Reserve
classification
Tonnage
(Mt)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Probable
Probable
484
484
7
7
1.5
1.5
16
16
3.3
3.3
11
11
Grade
(%)
2.2
2.2
+105m Level Ore Reserves calculated using financial assumptions and modifying factors stated in the Study. Tonnes are rounded to
thousands, which may result in rounding errors.
1 1% Zn = (Zn price x Zn payability) x (Zn plant recovery) = (2,756 x 53.7%) x (59.4%) = 0.2% Cu
(Cu price x Cu payability) (Cu plant recovery) (6,834 x 91.2%) (66.7%)
Cu-Equivalent grade = Cu grade + 0.2 x Zn grade
Plant recovery assumptions are based on metallurgical test work completed to date at Mintek Laboratories (South Africa) under the supervision of DRA.
The combined Project Probable Ore Reserves amount to 13.62 grading 1.1% Cu and 3.2% Zn, including 143kt copper metal and
433kt zinc metal, (Cu-Eq of 268kt metal tonnes at 2.0%), (refer ASX release 26 June 2019).
Table 7: Combined Ore Reserve Estimate for the Prieska Project
Prieska Project Ore Reserves estimate (Effective Date: 16 June 2019)
Cu
Zn
Cu equivalent
Deposit
+105 Level
Deep Sulphide
Total
Ore Reserve
classification
Tonnage
(Mt)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Probable
Probable
Probable
0.48
13.14
13.62
7
136
143
1.5
1.0
1.1
16
417
433
3.3
3.2
3.2
11
257
268
Grade
(%)
2.2
2.0
2.0
Project Ore Reserves calculated using financial assumptions and modifying factors stated in the Study. Tonnes are rounded to
thousands, which may result in rounding errors.
Figure 9: Views showing the remnant pillars and the accumulated water level
NW
Hutchings Shaft
SE
Upper Pillar
Project
Lower Pillar
Project
Current flooded
water level
Pillars for extraction
Pillars
intact
to
remain
34
Shaft refurbishment and mine dewatering
The Hutchings Shaft and underground workings are currently
flooded to a depth of 330m below surface and contain a
volume of 8.7 million m3 of accumulated water. Dewatering
of the workings via a pumping system to be installed in the
Hutchings Shaft is planned. Water will be pumped into a
one million m3 volume dewatering dam on surface, from where
mechanical evaporators will be used to accelerate evaporation.
Examinations and testing of the shaft steelwork from surface
down to 30m below the water level, along with the use of video
camera inspection down to 200m below the water surface, as
well as shaft probing and water quality testing to within 100m
of the shaft bottom helped determine that the majority of the
shaft is in good order (refer ASX release 2 February 2018).
Sections of the shaft will be refurbished. A pre-owned Koepe
rock winder and a double-drum men and material winder with
new ropes and equipment have been identified for purchase
and installation. The steelwork refurbishment will be carried out
concurrently with the underground dewatering campaign to
reduce the Project construction time and make optimal use of
the available construction crews.
Ore processing
Ore processing is planned to involve conventional differential
froth flotation to produce separate copper and zinc concentrates
at average grades of 24% Cu and 50% Zn from underground
mined material. Minor modifications to the processing plant will
allow the open pit material to be treated at the end of the mine
life, on a campaign basis, to produce separate copper and zinc
concentrates at average grades of 26% copper and 36% zinc.
The flowsheet for processing underground material is similar to
the flowsheet used during previous mining operations. Life-of-
mine metal recoveries into concentrates are anticipated to be
84.4% for Cu and 83.9% for Zn from treating underground mined
material and 66.7% and 59.4% for Cu and Zn, respectively, for
open pit mined material (refer ASX releases 15 November 2017,
1 March 2018 and 25 October 2018).
The concentrates will be trucked to Groveput, 50km from site,
and then railed to the Port of Ngqura (at Coega) for export to
smelters in Asia and Europe. Net smelter returns for the copper
and zinc concentrates (accounting for metal payabilities,
treatment and refining charges, and penalty provisions) are
expected to be 98.7% and 71.3% of market metal prices for Cu
and Zn, respectively, for underground sourced metal; and 91.2%
and 53.7% for Cu and Zn, respectively, for open pit sourced
material.
Recent changes in benchmark treatment costs for zinc concentrate
and treatment and refining costs for copper concentrates have
been applied, with the discounts on benchmark charges being
offered by potential off-takers for the clean Project products. A
3-D view of the plant area is shown below.
Figure 10: Project site general layout
Concentrate thickeners
Paste plant
RoM stockpile
Koepe Winder
Crusher
Flotation cells
Change
house
Cu & Zn concentrate
drying & load-out
Cu tailings
thickener
Reagent
storage
Process
water
Mine service
water
Milling section
Man Winder
Bulk explosives
Crushed ore bins
40 MVA
Sub-station
Stores area
35
ANNUAL REPORT 2019 BUSINESS REVIEW
REV IE W OF OPERATIONS continued
South Africa (Prieska Project) continued
Support infrastructure and workforce
Capital expenditure and construction schedule
While the total capital cost to construct the mine is estimated
to be AUD402 million which includes a 10% contingency, peak
funding required is marginally less at AUD398 million. Capital
costs were derived from vendor quotations, detailed bills of
quantities and labour rates from construction contractors.
Table 9: Capital expenditure
Capex area
Power supply
Water supply
Tailing storage facility
Shaft refurbishment
Mine dewatering and construction power
Surface infrastructure
Underground infrastructure
Open pit establishment and equipping
Processing plant
Project management (EPCM and owner)
Subtotal
Contingency 10%
Total capex
AUD (million)
45.0
2.4
31.4
45.7
37.1
36.7
34.0
2.5
89.6
41.0
365.3
36.5
401.8
Table 10: Capital expenditure spend schedule
Parameter
Unit
Total
Year
1
Year
2
Year
3
Year
4
Year
10
Project
capital
AUD
million
401.8 25.3 150.4 220.5
3.5
2.1
Water for the mining operations is planned to be supplied from
the Orange River, at a rate of 4.1ML per day, via the existing
water pipeline. Power requirements of 38MW are expected to be
sourced from the national power utility company, Eskom, via the
onsite Cuprum Substation. Plans are at an advanced stage to
commission the establishment of a renewable energy alternative
source to national grid power supply, capable of potentially
providing 52% of the mine’s energy needs in the near term (refer
ASX release 5 March 2019).
A tailings storage facility (TSF) that will initially serve as
a dewatering reservoir will be constructed to service the
Foundation Phase. Accommodation for some of the 893-strong
workforce, (including allowance for training and personnel on
leave), will initially be at Copperton, with plans to establish the
permanent mine village in Prieska once planning approvals allow
for such migration to occur. No new roads will be required to
access the site, though some internal roads are planned in order
to access site infrastructure.
Compliance
All environmental studies and applications for authorisations
have been completed and the Repli Environmental Authorisation
already granted. Environmental management is planned in
compliance with the National Environment Management Act
(NEMA) as well as the Equator Principles and International
Finance Corporation (IFC) standards. Community engagement
has commenced with the establishment of an active Stakeholder
Engagement Forum to guide the mine development process.
Operating costs
The estimated operating costs for the underground phase were
built up from first principles. Open pit mining operating costs
were a combination of contractor quotations and first principles.
The average unit operating costs over the Foundation Phase for
underground mining are shown below:
Table 8: All-in-sustaining unit costs for underground mining
Operating cost element
AUD/t ROM
Mining
Processing
Surface and in-directs
Concentrate transport
Corporate costs
Off-mine costs
Royalty (Government)
Sustaining Capex
Total
48.10
16.10
6.70
9.40
1.40
2.30
5.70
4.00
93.70
The all-in sustaining cost (AISC) per pound of copper equivalent
metal sold is estimated at AUD 5,470/t (USD3,773/t) or AUD
1,582/t (USD1,091)/t) in terms of equivalent zinc metal sold.
Exploration drilling at the Prieska Project
36
Table 11: Project execution schedule
Prieska Cu and Zn project schedule 1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Evaporation dam and TSF
Construct evaporation dam 1
Install evaporators dam 1
Construct evaporation dam 2
Install evaporators dam 2
Construct TSF
Shaft dewatering and
construction
Shaft sinkers mobilisation
Shaft preparation work
Shaft dewatering
UG construction
Mining
Mobilise mining contractor
Mining UG
Shaft hoisting
Processing and paste plant
Process plant construction
Process plant commissioning
Paste plant
Surface infrastructure
Bulk water supply works
Eskom temporary power
Cuprum feeder bay
40 MVA mine sub-station
Surface ventilation fans (1 and 2)
Build construction camp
Mining offices
Change house and lamp room
Financial evaluation
The Foundation Phase is expected to generate AUD819 million of post-tax, free cash flow, with the capex program, production profile
and expected cash flows as shown in the tables and figures overleaf (refer ASX release 26 June 2019).
Preliminary site preparation work on the Prieska Project
37
ANNUAL REPORT 2019 141,695
142,212
137,593
138,802
145,078
139,019
121,783
Year 3
2.33
85,864
70,848
20,607
404
(23)
381
(115)
(37)
(15)
(8)
(2)
(176)
205
(10)
194
194
Year 4
2.40
88,910
71,106
21,338
412
(23)
389
(113)
(37)
(15)
(8)
(8)
(182)
207
(10)
196
(45)
152
Year 5
2.43
87,832
68,796
21,080
402
(22)
380
(108)
(38)
(15)
(8)
(20)
(188)
192
(10)
1821
(51)
131
Year 6
2.40
90,407
69,401
21,698
410
(23)
387
(108)
(37)
(15)
(7)
(20)
(188)
199
(10)
189
(53)
136
Year 7
2.40
91,035
72,539
21,848
421
(23)
397
(111)
(37)
(15)
(7)
(21)
(191)
206
(10)
195
(55)
141
Year 8
2.40
90,917
69,510
21,820
412
(23)
389
(110)
(190)
(37)
(15)
(7)
(21)
199
(2)
(10)
186
(52)
134
Year 9
1.95
72,439
55,689
17,485
318
(19)
298
(80)
(35)
(12)
(6)
(17)
(149)
149
(8)
142
(40)
102
Year 10
0.57
11,436
35,235
4,249
9,264
93
(5)
88
(13)
(15)
(3)
(5)
(6)
(42)
46
(2)
45
(13)
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BUSINESS REVIEW
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South Africa (Prieska Project) continued
Table 12: Project production and cash flow profiles for the Foundation Phase
Parameter
ROM tonnage (processed)
Unit
Mt
Phase 1
Capex Yr1
Capex Yr2
20.83
Concentrates sold – Zn
tonnes
1,175,713
Concentrates sold – Cu
tonnes
788,811
Metal contained – Zn
Metal contained – Cu
tonnes
579,677
tonnes
189,002
Revenue (post-NSR)
AUD million
Selling and realisation charges
AUD million
Net revenue
AUD million
3,479
(195)
3,284
Mining, development, services cost
AUD million
(1,002)
Processing cost
General and administration
Off-mine costs
Royalties (Government)
AUD million
AUD million
AUD million
AUD million
(336)
(138)
(77)
(119)
Cash operating costs
AUD million
(1,673)
Cash operating profit
Project capital
Sustaining capital
Net cash flow pre-tax
Income tax
Net cash flow after tax
AUD million
AUD million
AUD million
AUD million
AUD million
AUD million
1,612
(402)
(83)
1,127
(308)
819
Figure 11: Project net cash flow post-tax profile
)
n
o
i
l
l
i
m
D
U
A
(
w
o
l
f
h
s
a
c
l
a
e
r
t
e
N
900
700
500
300
100
-100
-300
-500
Year 1
1.49
Year 2
2.44
71,618
126,476
55,973
34,301
12,213
216
(13)
204
90,200
63,238
21,648
392
(21)
371
(116)
(123)
(24)
(15)
(10)
(1)
(166)
38
(220)
(2)
(185)
(38)
(15)
(8)
(2)
(186)
185
(3)
(10)
171
(6)
(2)
(2)
(11)
(11)
(150)
(1)
(161)
(2)
(2)
(2)
(25)
(27)
(27)
(161)
(185)
171
900
700
500
300
100
-100
-300
-500
)
n
o
i
l
l
i
m
D
U
A
(
w
o
l
f
h
s
a
c
l
e
v
i
t
a
u
m
u
C
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10 Year 11 Year 12
Net cash flow after tax
Cumulative cash flow
38
Table 12: Project production and cash flow profiles for the Foundation Phase
Parameter
Phase 1
Capex Yr1
Capex Yr2
ROM tonnage (processed)
20.83
Unit
Mt
Year 3
2.33
Year 4
2.40
Year 5
2.43
Year 6
2.40
Year 7
2.40
Year 8
2.40
Year 9
1.95
Concentrates sold – Zn
tonnes
1,175,713
71,618
126,476
141,695
142,212
137,593
138,802
145,078
139,019
121,783
85,864
70,848
20,607
88,910
71,106
21,338
87,832
68,796
21,080
90,407
69,401
21,698
91,035
72,539
21,848
90,917
69,510
21,820
72,439
55,689
17,485
404
(23)
381
(115)
(37)
(15)
(8)
(2)
(176)
205
(10)
194
194
412
(23)
389
(113)
(37)
(15)
(8)
(8)
(182)
207
(10)
196
(45)
152
402
(22)
380
(108)
(38)
(15)
(8)
(20)
(188)
192
(10)
1821
(51)
131
410
(23)
387
(108)
(37)
(15)
(7)
(20)
(188)
199
(10)
189
(53)
136
421
(23)
397
(111)
(37)
(15)
(7)
(21)
(191)
206
(10)
195
(55)
141
412
(23)
389
(110)
(37)
(15)
(7)
(21)
(190)
199
(2)
(10)
186
(52)
134
318
(19)
298
(80)
(35)
(12)
(6)
(17)
(149)
149
(8)
142
(40)
102
Mining, development, services cost
AUD million
(1,002)
(116)
(123)
Concentrates sold – Cu
tonnes
788,811
Metal contained – Zn
Metal contained – Cu
tonnes
579,677
tonnes
189,002
Revenue (post-NSR)
AUD million
Selling and realisation charges
AUD million
Net revenue
AUD million
Cash operating costs
AUD million
(1,673)
Processing cost
General and administration
Off-mine costs
Royalties (Government)
Cash operating profit
Project capital
Sustaining capital
Net cash flow pre-tax
Income tax
Net cash flow after tax
AUD million
AUD million
AUD million
AUD million
AUD million
AUD million
AUD million
AUD million
AUD million
AUD million
3,479
(195)
3,284
(336)
(138)
(77)
(119)
1,612
(402)
(83)
1,127
(308)
819
Year 1
1.49
55,973
34,301
12,213
216
(13)
204
(24)
(15)
(10)
(1)
(166)
38
(220)
(2)
(185)
Year 2
2.44
90,200
63,238
21,648
392
(21)
371
(38)
(15)
(8)
(2)
185
(3)
(10)
171
(186)
(6)
(2)
(2)
(11)
(11)
(150)
(1)
(161)
(2)
(2)
(2)
(25)
(27)
(27)
(161)
(185)
171
Year 10
0.57
11,436
35,235
4,249
9,264
93
(5)
88
(13)
(15)
(3)
(5)
(6)
(42)
46
(2)
45
(13)
32
Higher cash flows in the early years of production are due to low tax and royalty rates resulting from carry-over of capital costs. The
Foundation Phase NPV estimate is most sensitive to the ZAR-USD exchange rate, followed by the zinc price and the copper price as
shown below.
Figure 12: Chart of the sensitivity of pre-tax NPV to variances in key input elements
Forex
Zinc price
Copper price
Zn grade
Cu grade
Opex
Capex
-250
-200
-150
-100
-50
0
50
100
150
200
39
ANNUAL REPORT 2019 BUSINESS REVIEW
REV IE W OF OPERATIONS continued
South Africa (Prieska Project) continued
Copper contributes 54% of the net revenue (after allowing for concentrate logistics, treatment costs and refining charges). The main
production and financial metrics for the Project are shown in Table 12.
Risk assessment
Headline risks were identified during a facilitated inter-disciplinary risk assessment workshops for the Project. These are summarised
in Table 13.
Table 13: Headline risks
Risk
Mitigation
1. Mine equipment and activities exceeding the Square
Kilometre Array (SKA) electromagnetic interference
(EMI) protection levels, resulting in the authorities
placing operating restrictions on the mine
• Electromagnetic Capability (EMC) Plan was formulated.
• Written approval of the EMC plan was received from SKA authorities.
• Designing taking into account key EMI emitters is planned.
2. Influx of people from outside of the Prieska
municipal area looking for employment negatively
affecting the local community
3. Number of employment and business opportunities
created by the Project for Siyathemba Municipality
residents and businesses not meeting public
expectations and causing disharmony
• Submission of the AMA permit application will be done within the prescribed
timeframe.
• Appointment of specialist consultants to assist in the permit application
process has been done.
• A community liaison office has been established. As has a Stakeholder
Engagement Forum with broad community representation. A collaboration
agreement has been entered into with local government (Siyathemba
Municipality). These platforms will assist with identifying and dealing with
migrant population challenges.
• Preferential hiring of local residents will be encouraged.
• Informing, training and upskilling of the local community has commenced.
• An on-line procurement management portal, Supply Chain Network™, is
being used to allow potential local suppliers to the Project to register with
the Project.
• Procurement procedures to prioritise local businesses.
4. Delays to the shaft dewatering and shaft and mine
• 40% contingency allowance made to water volumes expected to have
refurbishment
accumulated in the mine workings.
• Shaft examined by experts; continuous tests and examinations as dewatering
progresses. Pilot trials commenced to test various activities relating to
dewatering. Delayed start-up insurance included in the capital budget.
5. Mine production rates assumed in financial
• A practical and achievable production plan is in place.
modelling are not achieved in practice
• A monthly mining plan has been prepared.
6. Potential
for mud and water rushes while
dewatering and cleaning out the lower mining
levels
7. Unplanned power interruptions and escalation of
power tariffs. Delays in availability of power for the
Project
• Contract mining to be used to establish the mine, whereby skilled and
experienced operators will operate the underground mine to ensure a high
productivity start-up.
• Pumping plan for safe dewatering has been prepared.
• Level inspection procedures will be developed.
• Temporary power from the Cuprum Substation (15 MVA) is planned.
Emergency (diesel) power installed – currently set at 5MW. Investigating
renewable energy sources as an alternative source to grid power. Operating
shutdown procedure in place.
40
Risk
Mitigation
8. Ability to attract and retain skills at a remote site.
• Attractive salary levels set.
9. Availability of service providers and goods suppliers
to meet Mining Charter 3 Procurement policies
• Provision of suitable accommodation and recreational facilities.
• Staff Turnover Plan. Attractive roster system and allowance for fly-in fly-out
employees.
• Proactive engagement with service providers meeting Mining Charter 3
criteria as BEE entities. Use of online procurement portal to keep register of
businesses. Enterprise resource planning tools to record procurement spend
on compliant suppliers.
10. Production grades are lower than planned
• Peer reviews of the Mineral Resource Estimates done.
• Comprehensive grade control program planned.
• Blasting design to minimise overbreak.
11. Availability of specialised crane for installation of
• Identify the specialised crane required as early as possible
head gear and the Koepe winder
• An early contract is required for a 500-tonne crane.
Post-Feasibility Study activities
On completion of the BFS, efforts focused on
works relating to refining the study further in
line with specific funding requirements, pilot-
scale field trials of key activities, business
plan optimisation work, securing of long-lead
time items, formalising key service and supply
contracts and developing the Prieska Project
execution capacity.
Water treatment field trials
Pilot-scale trials were commissioned to further
test water qualities, refine the proposed
pumping system, investigate means of cost-
effective water treatment and to confirm the
size and arrangement of evaporator units to
be used.
Water treatment trials aim to provide engineering
data to allow detailed design and costings for
treating the accumulated water to a range of
water purification specifications.
Water treatment would allow offsite discharge
and other secondary uses of water to be
considered and so reduce the volume of
water that needs to be evaporated. A 5m3
per hour, pilot water treatment plant, bespoke
for the Prieska Project’s water and schedule
requirements, has been constructed and
commissioned. The dewatering pumping
system, supplying the water for the treatment
trials, forms part of the field trials.
Figure 13: Water treatment plant flowsheet
Client feed
Feed and aeration tank
Clarifier with cold lime softening
High efficiency self-cleaning strainer
High-efficiency ultra-filtration system
Break tank
Ultra filtration/reverse
osmosis clean-in-place
system
Reverse osmosis system with anti-scalant
Permeate water
Waste water
41
ANNUAL REPORT 2019 BUSINESS REVIEW
REV IE W OF OPERATIONS continued
South Africa (Prieska Project) continued
(Left) Water treatment pilot plant mobilisation. (Right) Commissioning the chemical treatment, filtration and reverse osmosis components of the pilot water
treatment plant, setup to operate at 5m3/hr of feed water.
On completing the water treatment trials, pilot-scale trials of the proposed mechanically-assisted evaporation assembly are planned
using 75kW and 90kW evaporator units. Results from the trials are expected to refine the number of and improve the operating
efficiency expected from the evaporation units to be installed.
Feasibility study field trial of effectiveness of a 15kW evaporator at the Prieska Project. The planned pilot trials aim to test 75kW and 90kW units as the next
phase of the program.
BFS optimisation studies
Several opportunities are being followed up that are expected
to significantly improve the overall project economics and
project risk profile. The optimisation process is expected to be
completed by the end of CY2019, resulting in a refined mining
plan. These opportunities include:
The enterprise mapping and optimisation process.
This process involves using software to map the entire mine
to market value chain to identify optimal combinations. It is
expected to significantly improve project economics whilst also
mapping out key business processes to aid operational control
and a better understanding of the real value drivers unique for
the Prieska Project business plan.
Review of the processing plant flowsheet and layout.
This is being done with the aim of refining and reducing the
plant’s footprint and simplifying the layout to make the facility
more easily operable.
Mine design and scheduling refinements.
Mine design layout, sequencing and scheduling refinements
continue to be made as part of the enterprise optimisation
process.
Key supply contracts and long lead time order placement
The negotiations for key supply contracts and to secure long
lead time plant and equipment are taking place.
42
Contracts under consideration include:
In-house project execution capacity
• obtaining grid power from the national power utility, Eskom.
While Eskom has given approval for the Company to
undertake the power connection works as a self-build
program, administrative connection charges and power tariffs
are yet to be finalised
• commissioning the next phase of renewable energy supply
studies. A collaboration agreement is already in place that
provides the framework for advancing the plan to have over
50% of project power needs supplied from renewable energy
sources
• securing water supply infrastructure and tariffs
• placement of orders or down-payments for long lead time
items, including rock hoisting and materials transportation
winders and ball mills
• engagement of project management personnel, contractors
and key workstreams service providers
• marketing of copper and zinc concentrates
Post financial year end, on 3 September 2019, Orion concluded
a Memorandum of Agreement with Byrnecut Offshore, an
internationally recognised underground mining contractor, on
the mining of the Prieska deposit.
Key terms of the agreement are that the parties will seek
to enter an alliance related to underground mining at the
Prieska Project, where Byrnecut would provide underground
mine development and mine production services; commit to
promoting local employment and skills transfer in support of
transformation of the industry; and collaborate with local BEE
enterprises, in line with Orion’s commitment to the progressive
transformation and modernisation of the South African mining
industry (refer ASX release 3 September 2019).
Various entities are being considered to assist with managing the
project execution and supplementing the Orion team responsible
for executing the BFS. A detailed project execution strategy is to
be formulated.
Permits and licensing
Post year end, on 3 July 2019, the Repli Environmental
Authorisation was granted by the DMRE in accordance with
Environmental Impact Assessment Regulations, 2014 (refer
ASX release 8 July 2019). The Repli Mining Right was awarded
on 23 August 2019 (refer ASX release 3 September 2019).
Granted under the MPRDA, the Mining Right is valid for an initial
period of 24 years and can be renewed on application for further
periods, each of which may not exceed 30 years.
Grant of the Environmental Authorisation and Mining Right to
the south eastern strike extension of the Prieska orebody on the
Vardocube prospecting right area, which was submitted after the
Repli application, is expected in FY2020.
Prieska Deposit extensional exploration
Deep Sulphide Target Resource drilling program
Orion completed the intensive Deep Sulphide Target drill
program during the second quarter of FY2019. At the height
of activity, 18 surface diamond drill rigs were in operation. The
drill program aimed to provide statistical validation of historical
drill data available, as well as to obtain a drill spacing to allow
classification of the Mineral Resource in accordance with the
JORC Code (2012) (refer ASX release 15 October 2018).
Drilling tested limited new targets that extended the known
mineralisation outside of the historical drill grid. A total of
85,424 metres was drilled. The drilling program was successful
in providing the data required for the Mineral Resource Estimate
and in addition indicated that potential exists to increase the
Resource with additional drilling (Figure 14).
Figure 14: Longitudinal section of the Deep Sulphide Mineral Resource showing potential extensions
43
ANNUAL REPORT 2019 BUSINESS REVIEW
REV IE W OF OPERATIONS continued
South Africa (Prieska Project) continued
Drill targets in the south-eastern section promise thicker and
higher-grade mineralisation and are a priority once underground
exploration begins. Drilling can be conducted from underground
drill platforms from existing exploration drives and will commence
upon completion of dewatering and equipping of these levels.
+105 Level Target (open pit) Resource drilling program
The +105 Level drilling program, targeting mineralisation
expected to be amenable to open pit mining, was completed in
October 2017 (refer ASX release 15 October 2018).
The geological wireframe and resource estimate have been
updated during the third quarter of FY2019 to include refinements
to modelling of metallurgical zonation. The Mineral Resource
Estimate is discussed previously in this report.
Only 50% of the current supergene resource in the +105 Level
Mineral Resource Estimate falls within the Indicated Mineral
Resource category. Orion plans to upgrade this Inferred Mineral
Resource to an Indicated level by infill drilling from the existing
+105 level underground mine development.
Oxidised lead and zinc mineralisation from the Prieska Project
44
BUSINESS REVIEW
R EVIE W OF OPERATIONS continued
Near mine exploration (South Africa) cont inu e d
NEAR MINE EXPLORATION
Geophysical surveys have i den t ified
numerous compelling targets for both
VMS style copper-zinc mineralisation
and nickel-copper sulphide
mineralisation within a 15km radius of
Prieska. Despite Prieska being one of
the single largest VMS exhalite bodies
known in the world, the area ar ound
the de posit has h ad vir tu all y n o
expl or atio n in o ver 35 years.
deposits worldwide tend to occur in clusters, and apart from the
giant Prieska Deposit, five smaller deposits occur on the near-
mine project areas. These are Annex, Ayoba and the three Kielder
deposits referred to as the PK1, PK3 and PK6 Deposits.
During FY2019, Orion completed five fixed loop time-domain
electromagnetic (FLTDEM) surveys, drilled two diamond drill
holes to test a FLTDEM conductor and completed a SkyTEMTM
survey that covers the near mine prospecting rights. The
highlight of this work was the discovery of massive sulphide
mineralisation at Ayoba (refer ASX releases 16 January 2019
and 25 February 2019).
Orion believes that, with the application of advanced,
modern geophysics and the latest geological thinking, there
are outstanding opportunities for new VMS discoveries. The
near-mine projects are those within prospecting tenements Repli,
Repli (Doonies Pan), Vardocube and Bartotrax (Figure 15). VMS
Exploration is currently being conducted over 14 SkyTEMTM
anomalies prioritised for follow-up. In addition, the newly-
acquired magnetic data together with field mapping and
historic data compilations are being used to identify areas of
high prospectivity.
PROJECT S:
ANNEX COPPER DEPOSI T
AYOBA TARGET
SkyTEM TM ANOMALIES
Deep drilling rig at the Ayoba Target
45
ANNUAL REPORT 2019 BUSINESS REVIEW
REV IE W OF OPERATIONS continued
Near mine exploration (South Africa) con ti nue d
Figure 15: Surface plan showing the prospecting rights over and adjacent to the Prieska Project, and the location of the Annex and Kielder
(PK1, PK3 and PK6) deposits
Annex Copper Deposit
Ayoba Target
The Bartotrax Prospecting Right (Bartotrax), which includes the
A new zinc-copper bearing massive sulphide body, was
Annex VMS Copper Deposit (Annex), was granted by the DMRE
discovered at the Ayoba Prospect at the end of 2018. The
in November 2018. Annex, located approximately 6km south
massive sulphide
intersection was made 5.3km south-
of the Prieska Project, was discovered by Anglovaal in 1969.
southwest of Orion’s Hutchings Shaft on the Prieska Project and
Mineralisation was identified over a strike length of 1,000 metres
1.6km west and along strike of the known copper mineralisation
and drilled down to 550 metres below surface. The deposit
at Annex. The discovery drill hole intersected 9.5m of massive
remains open in depth down-plunge.
sulphides from 654.00m grading 0.63% Cu and 0.93% Zn,
Orion completed four FLTDEM surveys to explore for possible
strike and depth extensions of the Annex Deposit in the first
including 1.50m from 654.50m at 0.89% Cu and 4.98% Zn
(Figures 16 and 17) (refer ASX release 16 January 2019).
quarter of FY2019. Drill testing of an electromagnetic conductor
Ayoba represents the first new VMS discovery in the Areachap
detected approximately 1,600m west along strike of the Annex
Belt in over 36 years. Further exploration at Ayoba will target the
Deposit led to the discovery of Cu-Zn mineralisation at Ayoba.
high-grade Zn zone in the upper part of the mineralisation.
46
Figure 16: Section through holes OAXD002 and OAXD002_D1 showing
the mineralisation intersected
Figure 17: Geological map interpreted from the newly-acquired aeromagnetic and drill data showing Annex, the Ayoba FLEM conductor and the
fold closure target to the west-northwest
Drill core sampled as part of the exploratory drill campaign on the Rok
Optel Prospect.
47
ANNUAL REPORT 2019 BUSINESS REVIEW
REV IE W OF OPERATIONS continued
Near mine exploration (South Africa) con ti nue d
SkyTEMTM survey and follow-up
Final results of the SkyTEMTM (AEM) survey, conducted in December 2018 over the Repli, Repli (Doonies Pan), Vardocube and
Bartotrax Prospecting Rights (refer ASX release 16 January 2019), were received from the Company’s Perth-based geophysical
consultants, Southern Geoscience Consultants (SGC), during the last quarter of FY2019. Fourteen AEM conductors were prioritised
for follow-up work (Figure 18).
Based on the known mineral occurrences and aero-magnetic interpretation, the AEM anomalies are classified as VMS and magmatic
Ni-Cu targets. The VMS targets are located on key stratigraphic horizons that mark a paleo-seafloor setting. Some of these conductors
were detected over known VMS deposits, confirming the SkyTEMTM system to be effective in detecting the styles of mineralisation for
which Orion is prospecting.
Figure 18: Airborne EM anomalies and known base-metal deposits and occurrences shown on the AEM Channel 25 map. Anomalies considered
by SGC as follow-up targets are labelled (COP and VOG) whereas those without labels are considered low potential targets. The large, linear
features south and east of the Prieska Project (PCM) are caused by power lines and other infrastructure.
48
The Company is currently exploring these targets. Soil sampling and geological mapping are being carried out in order to prioritise
targets for ground EM and drill follow-up.
The geological map of the Near Mine Area has been updated by integrating the new SkyTEMTM airborne magnetic data and field
mapping (Figure 19). The current interpretation suggests the prospective horizon to be developed over some 20km on the north-
western and south-eastern strike extent of the Prieska Deposit, the western and eastern strike extent of the Annex Deposit, the Ayoba
Discovery and in the Magazine Antiform shown below.
Figure 19: Updated geological plan showing near-mine prospective horizons based on surface geology and aeromagnetic data
49
ANNUAL REPORT 2019 BUSINESS REVIEW
R EVI EW OF OPERATIONS continued
Regional exploration (South Africa) contin ued
REGIONAL EXPLORATION
MAS IQH AME PROJECT AREA
N AMA QU A-DISAWELL PROJECT
ARE A (J acomy nspan Nickel-
Copper- Cobalt -PGE Project,
Rok O ptel Prospect)
MARY DA LE GOL D- COPPER
PRO J EC T AREA (Wi tkop)
Ori on maint ains a substa ntial and
prosp ect ive land hol ding in the Areachap
Be lt. The Areachap Belt is analo g o us to
othe r Prot eroz oi c mobile belts ho s ting major
VMS and magmatic Ni -Cu-C o-PG E d ep os it s.
(See Figure 2 for map of Areachap Belt showing prospecting rights held
by, or currently under option to, Orion, and noted mineral occurrences.)
VMS deposits almost always occur in clusters or ‘districts’
associated with volcanic spreading centres, with four such
centres having been identified in the Areachap Belt. In addition
to the near-mine projects, Orion is also prospecting for VMS
deposits on the Masiqhame Prospecting Right. Contiguous to
the north of the Namaqua-Disawell Project (Ni-Cu), this project
is defined in terms of the Masiqhame tenement holding and
includes the Kantienpan and Boksputs Zn-Cu VMS deposits.
With its known VMS deposits, numerous Cu-Zn mineral
occurrences and regional geological setting, the area offers
potential for economic VMS Cu-Zn and magmatic Ni-sulphide
discoveries. It is common for VMS districts to have small Cu-Zn
deposits clustering close to a large deposit; on the Masiqhame
Prospecting Right, the larger deposit is still to be discovered.
Similarly, world-class nickel deposits tend to also occur in
clusters both on prospect and regional scale. Within these
intrusive centres, a small number of the intrusions tend to host
the best mineralisation depending upon the intrusion magma-
flow dynamics and timing of magmatic sulphide immiscibility
and transport. Several mafic intrusive bodies with nickel and
associated metals are known on the Namaqua-Disawell
prospecting rights. The setting of mineralisation has been
confirmed to be analogous to other orogenic-hosted, deep-
50
seated magma conduit complexes in Africa, Australia and
South America. Conduit style mineralisation is currently the
top priority global target for magmatic Ni-Cu-PGE sulphide
exploration. Electromagnetic geophysical methods are the
primary tool for discovery of massive magmatic Ni-Cu-Co-PGE
deposits. Due to the complexity of these intrusions, an innovative
approach to exploration is required to resolve the locations of
economic mineralisation. This entails usage of airborne, ground,
and down-hole surveying systems.
Regional exploration on the Masiqhame and Namaqua-Disawell
prospecting rights continued in FY2019, along with field mapping
and interpretation of drill information and geochemical data.
Masiqhame Project Area
In March 2018, Orion entered into an earn-in 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. Orion currently holds a 49% stake and has
received Ministerial consent to transfer a controlling interest
in the company to Orion in terms of Section 11 of the Mineral
and Petroleum Resources Development Act, No. 28 of 2002
(MPRDA).
As a result of the receipt of Section 11 consent from South Africa’s
DMRE, Masiqhame will issue an additional 1% of its shares to
Orion, resulting in Orion holding 50% of the total Masiqhame
shares (refer ASX release 2 September 2019). Under the earn-in
agreement between the parties, Orion has the opportunity to earn
in an additional 23% of the shares to bring its holding to a total of
73% by completing a feasibility study on any mineral project on
the property. Orion’s exploration spend up to 31 July 2019 on the
tenements amounted to ZAR16 million (~$1.6 million).
The Masiqhame Prospecting Right is located 90km north of the
Prieska Project in easily accessible flat-lying countryside and is well
situated with regional grid power and rail lines within 10km of the
site (Figure 20).
Orion is currently focusing on VMS-style mineralisation on
Masiqhame, following up on selected anomalies detected by
a regional SkyTEMTM survey completed in early 2018 over the
prospecting right. During FY2019, five FLTDEM surveys, geological
mapping and soil sample surveys were conducted to prioritise drill
targets. Integration of the data defined two compelling drill targets
with strong conductors on the B1 and B4 prospects located in the
Boksputs area, an area known to host VMS mineralisation (Figure
20) (refer ASX release 24 September 2018). While B1 was never drill
tested, drilling at B4 was reported to intersect Cu mineralisation but
did not test the FLTDEM conductor.
Figure 20: FLTDEM conductors and loops on Masiqhame
identified within
Orion believes that the integration of geochemical and
geophysical methods may quickly enable new targets
to be
the Masiqhame Prospecting
Right, which overlies a highly prospective VMS horizon
extending over more than 140km of strike (Figure 21).
This horizon, interpreted from published geological data,
known mineralisation and detailed airborne magnetic data
contains numerous published occurrences of copper-zinc
mineralisation.
Figure 21: Interpreted geological map with the prospective horizon (paleo-seafloor), Cu-Zn occurrences and EM anomalies
51
ANNUAL REPORT 2019 BUSINESS REVIEW
REV IE W OF OPERATIONS continued
Regional exploration (South Africa) contin ued
Namaqua-Disawell Project Area
Figure 22: The Namaqua-Disawell Prospecting Rights showing known Ni-Cu prospects.
Jacomynspan
Prospect
Area 4
Prospect
Rok Optel
Prospect
Jacomynspan Nickel-Copper-Cobalt-PGE Project
The Namaqua-Disawell Project area, within which the Jacomynspan
intrusion is located, is 65km northwest of the Prieska Project, within
the central part of the Areachap Terrane (Figure 22). The Project
area is highly prospective for magmatic nickel-copper-cobalt-
PGE sulphide mineralisation within syn- to late-tectonic ultramafic
intrusions, of which several have been identified.
The JORC compliant Mineral Resource for the Jacomynspan
Deposit announced in March 2018 is 6.8Mt containing 39,480
tonnes nickel, 22,800 tonnes copper, 1,800 tonnes cobalt at a
0.4% Ni cut-off with grades of 0.57% Ni, 0.33% Cu and 0,03%
Co (refer ASX release 08 March 2018). No changes to the
Mineral Resource were reported in FY2019. The Company has
reviewed the Jacomynspan Mineral Resources and no material
changes have occurred during the reporting period that affect
the Mineral Resource Estimate.
PGE potential superimposed. The suite of intrusions on the
Namaqua-Disawell Rights is located within the Meso to Neo-
Proterozoic Namaqua-Natal Orogenic Belt. This is a complex,
long-lived, multi-phase, orogenic assembly zone, related to
the amalgamation of the Rodinia Supercontinent. This tectonic
setting is favourable for production and ascent of metal-enriched
mantle-derived magma that utilises deep-seated structural
zones as pathways to intrude the upper crust.
Rok Optel Prospect and Area 4
Two other Ni-Cu deposits, Area 4 and Rok Optel, were
investigated during the 1970s by Anglo American Prospecting
Services (AAPS), Newmont, Phelps Dodge and Hoch Metals.
These prospects were covered by the SkyTEMTM survey
completed FY2018.
In 2018, Orion completed FLTDEM surveys, diamond drilling and
DHTDEM surveys.
In 2018, Orion completed FLTDEMs, four diamond drillholes and
two down-hole time domain electromagnetic (DHTDEM) surveys.
Orion believes a substantial exploration opportunity exists within
the project area with VMS copper-zinc and Intrusive Ni-Cu-Co-
Four diamond holes were drilled to test the more conductive
FLTDEM anomalies and subsequent DHTDEM conductors
on Rok Optel. The best intersections were made in drill-holes
OROD001 and OROD003.
52
Intersections in OROD001 include:
• 8.99m from the 201.05m down-hole depth at 0.24% Ni,
0.16% Cu, 0.02% Co and 0.22g/t 2PGE & Au; and
• 7.29m from the 292.09m down-hole depth at 0.28% Ni,
0.11% Cu, 0.01% Co and 0.66g/t 2PGE & Au (refer ASX
release 24 October 2018).
The best intersections in OCOD003 include:
• 10.51m from the 397m down-hole depth at 0.29% Ni, 0.23%
Cu, 0.04% Co and 0.15g/t 2PGE & Au; and
• 3.24m from 404.54m down-hole at 0.36% Ni, 0.25% Cu,
0.05% Co and 0.18g/t 2PGE & Au.
transgressive vein and stringer-style mineralisation
The
intersected in the drill holes is genetically very significant (Figure
23). Most massive sulphide ore deposits are characterised by
magma chamber dynamics that cause repeated mineralising
events within a constrained locality. The identification of
magmatic sulphide veins injected into the country rock is also
particularly encouraging as it highlights the potential to discover
bulk massive sulphide mineralisation.
Marydale Gold-Copper Project (Witkop)
Orion holds prospecting rights over the Marydale Gold-Copper
Project, a deposit of possible high sulphidation epithermal origin
located 60km from the Prieska Project. Historical drilling was
carried out at various orientations and, despite wide zones of
mineralisation being intersected, the majority of these are now
seen to be sub-optimal.
Drilling by Orion in 2016 confirmed historic drill results. Initial
interpretations, based on data from oriented core, revealed
that the host lithology is in a structurally complex, folded and
sheared package. Orion is currently reinterpreting the drill data
and assessing the economic potential of the deposit.
No field work was carried out on the Marydale Gold-Copper
Project during FY2019.
Figure 23: Vein style mineralisation intersected in ultramafic rocks at the Rok Optel Prospect
Massive sulphide veins
intruding lithified puroxenite
along grain boundaries and
stoping/entraining silicate
autoliths
Massive sulphide intruding and
brecciating pyroxenite
The SkyTEMTM geophysics survey at the Namaqua-Disawell Project
53
ANNUAL REPORT 2019 BUSINESS REVIEW
REV IE W OF OPERATIONS continued
Australia
Fraser Range – Nickel-Copper Projects
(Western Australia)
Orion maintains a sizeable tenement package in the Fraser Range
Province of Western Australia which Independence Group NL
(ASX: IGO) is currently earning into via a joint venture agreement
(JVA). Under the JVA, IGO is responsible for all exploration on the
tenements and provides regular updates to Orion on activities
and results.
mineralisation within this district is hosted within dykes from
the Woods Point Dyke Swarm (WPDS), a series of ultramafic to
felsic dykes occurring over a 75km long north-south belt. Key
Cu-Ni-PGE occurrences are known within the WPDS and three
of these lie within Orion’s tenement package.
Drilling conducted by Orion at the key Coopers Creek
Polymetallic Prospect during 2014 confirmed the presence of
PGE mineralisation.
On 11 August 2015 Orion announced to the ASX that it had
entered into a sale agreement with Centennial Mining Ltd for
Centennial to acquire Orion’s Walhalla Project mining licence
5487. The original sale agreement contained a number of
conditions that were required to be satisfied before the transfer
of MIN 5487 could be effected. For various reasons, these
conditions are unlikely to be satisfied and Centennial, acting
through its administrators, are not contending that Centennial
has any right, title or interest in MIN 5487 or that the original sale
agreement remains. Consequently as at June 2019, MIN 5487
remained under Orion’s ownership and control.
Figure 24: IGO-ORN Fraser Range JV Tenements
The combination of magmatic Ni-Cu-Co and VMS Cu-
Zn mineralisation in the Fraser Range is analogous to the
Areachap Belt in South Africa where the Company holds
Prospecting Rights over both magmatic Ni-Cu and VMS style
Cu-Zn deposits.
Orion has been informed by IGO that a drilling program has
begun to test two high-priority targets selected based on ground
geophysics and geochemistry carried out by IGO (refer ASX
release 10 March 2017). The projects being prioritised for drill
testing are North West Passage for intrusive hosted Ni-Cu and
Pike Prospect where potential exists for both Ni-Cu Intrusive
mineralisation and VMS Cu-Zn mineralisation (Figure 24)
The North West Passage
The target was initially identified by Orion in a 2014 versatile time
domain electromagnetic (VTEM) survey and was interpreted
further by IGO using additional geophysical data, including
aeromagnetics and ground gravity. IGO commissioned a five-line
moving loop electromagnetic (MLEM) survey across the prospect
in 2017 (refer ASX release 30 July 2019). IGO plan to drill two
diamond drill holes totalling 700m to test the conductor.
Pike Prospect – E28/2367
Four conductors were identified from the Pike MLEM survey.
Based on electromagnetic, geochemistry and magnetic structural
data, six diamond drill holes for 2,380 metres have been planned
across three prospects. Drilling is anticipated to be conducted in
the second quarter of FY20. The Pike conductors offer both Cu-
Zn VMS targets and magmatic hosted Ni-Cu targets.
Government funded Exploration Incentive Scheme (EIS) funding
up to $150,000 has been secured.
Walhalla Gold and Polymetals Project (Victoria)
While the Walhalla-Woods Point District is best known for gold
mining, high-grade copper-nickel and PGE mineralisation also
occurs within the belt. Both the gold and copper-nickel-PGE
54
BUSINESS REVIEW
OR E RES ER VE AND MINERAL RESOURCE STATE ME N TS
Orio n has a dual li sti n g wit h th e
Austra li an Secu rit ies Exch an ge
(ASX) and th e Joh an n es bu rg
St ock Exchan ge (J SE) an d r epo r ts
Expl or atio n Resu l ts , M in eral
Resource an d Ore Res er ve E st i mates
in ac c ordan ce wi th t h e ASX lis t ing
rules a nd th e requ i remen ts an d
guidelines of t he A u st ralas ian
Code for Report in g Explorat io n
Results, Min eral Reso u rces an d Or e
Rese r v es, 20 12 ( th e JO RC C ode) .
The JSE requires reporting in terms of the South African Code
for the Reporting of Exploration Results, Mineral Resources
and Mineral Reserves, 2016 (SAMREC Code), however the
JORC Code requirements are considered similar enough to be
accepted by the JSE. The Orion financial year end is 30 June
and most of its subsidiaries have been aligned to this annual
reporting date.
The 2019 Annual Report covers Orion’s five exploration projects
in the Northern Cape province of South Africa as well as its
interest in a number of Australian projects. By the end of FY2018,
Indicated and Inferred Mineral Resources were classified and
reported from both Orion’s flagship Prieska VMS Project (refer
ASX releases 8 February 2018 and 9 April 2018) as well as
the Jacomynspan Nickel-copper Project (refer ASX release
8 March 2018). By the end of FY2019, the Prieska Project’s
Mineral Resources had been upgraded to Probable Mineral
Reserves, Indicated Mineral Resources and Inferred Mineral
Resources for both the surface +105 Level Mineral Resources
(refer ASX releases 15 January 2019 and 26 June 2019) and the
underground Deep Sulphide Mineral Resource (refer ASX releases
18 December 2018 and 26 June 2019). A comparison of the
FY2018 and FY2019 estimates are summarised below on a
project by project basis.
Listings of the respective estimates as they stand at the end of
FY2019 are tabulated below for Orion’s total interests and for the
operational and project divisions. The tables are accompanied by
the relevant JORC Code Competent Person statements. Refer
to the Corporate section for Orion’s interest in each project.
Orion’s procedures for public reporting ensures transparency,
materiality and competence in its governance of Mineral
Resource and Mineral Reserve Estimates and release of results
requires several assurance measures.
Firstly, the Competent Persons responsible for public reporting:
• Must be current members of a professional organisation that
is recognised in the JORC Code framework;
• Must have at least five years relevant experience in the style of
mineralisation and reporting activity for which they are acting
as Competent Person;
• Must have given a written consent to inclusion of the results
and estimates that are reported, stating that the report agrees
with supporting documentation regarding the results or
estimates prepared by each Competent Person; and
• Must has prepared supporting documentation for results
and/or estimates to a level consistent with standard industry
practices. This includes JORC Table 1 Checklists for any
results and/or estimates reported.
Orion also ensures that any publicly reported results and/
or estimates are prepared using JORC and ASX guidelines,
accepted industry methods and using specialised guidance
for aspects where required, such as metal prices and foreign
exchange rates. Estimates and results are also peer reviewed
internally by Orion’s senior technical staff before being presented
to Orion’s Board for approval and subsequent ASX reporting.
Market sensitive or production critical estimates may also be
audited by suitably qualified external consultants to ensure the
precision and correctness of the reported information. Once
operational, Orion plans to ensure that the estimation precision
of actual mine and process production is compared to the
Mineral Resource and Ore Reserve forecasts.
55
ANNUAL REPORT 2019 BUSINESS REVIEW
OR E RES ER VE AND MINERAL RESOURCE STATE ME N TS cont inued
Prieska Project Mineral Resources and Reserves
The BFS reported on herein contains production targets and forecast financial information supported by a combination of Probable
Ore Reserves, Indicated Mineral Resources and Inferred Mineral Resources, all as defined, compiled and disclosed in compliance with
ASX Listing Rules and The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 (JORC
(2012) or JORC Code) reporting standards. The Ore Reserves and Mineral Resources underpinning the production target in this report
have been prepared by competent persons in accordance with the requirements in Appendix 5A (JORC (2012)).
Mineral Resources
The Mineral Resource Estimates classified and reported in terms of the JORC Code, 2012 guidelines, for both the Deep Sulphide
Mineral Resource 1 and the +105 Level Mineral Resource 2 are as tabled individually below and then combined in the final table 2.
Deep Sulphide Mineral Resource for Repli + Vardocube Tenements (Effective Date: 15 December 2018) 1
Classification
Tonnes
Cu (metal tonnes)
Cu (%)
Zn (metal tonnes)
Zn (%)
Tenement
Repli
Vardocube
Indicated
15,052,000
Inferred
6,998,000
Total
22,050,000
Indicated
Inferred
Total
3,455,000
3,221,000
6,676,000
Deep Sulphide Total
Indicated
18,507,000
Inferred
10,219,000
Total
28,726,000
170,000
80,000
249,000
44,000
41,000
85,000
217,000
117,000
334,000
1.15
1.09
1.13
1.27
1.27
1.27
1.17
1.14
1.16
510,000
270,000
779,000
158,000
147,000
305,000
667,000
417,000
1,084,000
3.38
3.86
3.53
4.57
4.56
4.57
3.60
4.08
3.77
Deep Sulphide Resource bottom cut-off = 4% Equivalent Zn. Mineral Resources stated at zero % cut-off. Tonnes are rounded to
thousands, which may result in rounding errors.
Classification
Mineralised zone
Tonnes
Cu (metal tonnes)
Cu (%)
Zn (metal tonnes)
+105 Updated Mineral Resource for the Repli Tenement (Effective Date: 11 January 2019) 2
Indicated
Supergene
Inferred
Total
Oxide
Supergene
624,000
624,000
511,000
627,000
Total
1,138,000
10.000
10,000
3,000
14,000
17,000
Total
+105
Mineral Resource
1,762,000
27,000
1.54
1.54
0.6
2.2
1.5
1.5
19,000
19,000
4,000
11,000
16,000
35,000
Zn (%)
3.05
3.05
0,9
1.8
1.4
2.0
+105m Level Mineral Resource bottom cut-off = 0.3% Cu. Mineral Resources stated at zero % cut-off. Tonnes are rounded to
thousands, which may result in rounding errors.
1 Mineral Resource reported in ASX release of 18 December 2018: “Landmark Resource Upgrade Sets Strong Foundation” available to the public
on www.orionminerals.com.au/investors/market-news. Competent Person Orion’s exploration: Mr. Errol Smart. Competent Person: Orion’s Mineral
Resource: Mr. Sean Duggan. Orion confirms it is not aware of any new information or data that materially affects the information included above. For
the Mineral Resources, the Company confirms that all material assumptions and technical parameters underpinning the estimates in the ASX release
of 18 December 2018 continue to apply and have not materially changed. Orion confirms that the form and context in which the Competent Person’s
findings are presented here have not materially changed.
2 Mineral Resource reported in ASX release of 15 January 2019: “Prieska Total Mineral Resource Exceeds 30Mt @ 3.7% Zn and 1.2% Cu Following
Updated Open Pit Resource” available to the public on www.orionminerals.com.au/investors/market-news. Competent Person Orion’s exploration:
Mr. Errol Smart. Competent Person: Orion’s Mineral Resource: Mr. Sean Duggan. Orion confirms it is not aware of any new information or data that
materially affects the information included above. For the Mineral Resources, the Company confirms that all material assumptions and technical
parameters underpinning the estimates in the ASX release of 15 January 2019 continue to apply and have not materially changed. Orion confirms that
the form and context in which the Competent Person’s findings are presented here have not materially changed.
56
Combined Prieska Project Mineral Resource for Repli + Vardocube Tenements (Effective Date: 11 January 2019) 2
Mineral Resource
Classification
Tonnes
Cu (metal tonnes)
Cu (%)
Zn (metal tonnes)
Zn (%)
Deep
Resource
+105m
Resource
Total
Grand total
Sulphide
Indicated
18,507,000
Inferred
10,219,000
Level
Indicated
624,000
Inferred
1,138,000
Indicated
19,131,000
Inferred
11,357,000
30,488,000
217,000
117,000
10,000
17,000
227,000
134,000
361,000
1.17
1.1
1.54
1.4
1.18
1.2
1.2
667,000
417,000
19,000
16,000
686,000
433,000
1,119,000
3.60
4.1
3.05
1.4
3.59
3.8
3.7
Deep Sulphide Resource bottom cut-off = 4% Equivalent Zn; +105m Level Mineral Resource bottom cut-off = 0.3% Cu. Mineral
Resources stated at zero % cut-off. Tonnes are rounded to thousands, which may result in rounding errors.
The Mineral Resources are inclusive of Ore Reserves.
Ore Reserves
The Ore Reserves that follow are classified and reported in accordance with JORC Code, 2012.
The Deep Sulphide Probable Ore Reserve1 estimate amounts to 13.14Mt grading 1.0% Cu and 3.2% Zn, including 136kt copper
metal tonnes and 417kt zinc metal tonnes (Cu-Eq of 257kt metal tonnes at 2.0%) as tabulated below.
Prieska Project Deep Sulphide Ore Reserves (Effective Date: 16 June 2019) 1
Cu
Zn
Cu equivalent 2
Deposit
Deep Sulphide
Total
Ore Reserve
classification
Tonnage
(Mt)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Probable
Probable
13.14
13.14
136
136
1.0
1.0
417
417
3.2
3.2
257
257
Grade
(%)
2.0
2.0
Deep Sulphide Ore Reserves calculated using financial assumptions and modifying factors stated in the Study. Tonnes are rounded
to thousands, which may result in rounding errors.
The +105 Level Probable Ore Reserve 1 is estimated at 480kt grading 1.5% Cu and 3.3% Zn, including 7kt copper metal tonnes and
16kt zinc metal tonnes, (Cu-Eq of 11kt metal tonnes at 2.2%).
Prieska Project +105 Level Ore Reserves (Effective Date: 15 June 2019) 1
Cu
Zn
Cu equivalent 2
Deposit
+105 Level
Total
Ore Reserve
classification
Tonnage
(Mt)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Grade
(%)
Metal tonnes
(Kt)
Probable
Probable
484
484
7
7
1.5
1.5
16
16
3.3
3.3
11
11
Grade
(%)
2.2
2.2
+105m Level Ore Reserves calculated using financial assumptions and modifying factors stated in the Study. Tonnes are rounded to
thousands, which may result in rounding errors.
1 Ore Reserve reported in ASX release of 26 June 2019: “Prieska BFS – Long life, high margin project” available to the public on www.orionminerals.
com.au/investors/market-news. Competent Person: Orion’s Ore Reserve: Mr. William Gillespie. Orion confirms it is not aware of any new information
or data that materially affects the information included above. For the Ore Reserves, the Company confirms that all material assumptions and technical
parameters underpinning the estimates in the ASX release of 26 June 2019 continue to apply and have not materially changed. Orion confirms that the
form and context in which the Competent Person’s findings are presented here have not materially changed.
2 Method used to determine Cu_Equivalent Zn grades: Cu_Equivalent
1% Zn = (Zn price x Zn payability) x (Zn plant recovery) = (2,756 x 71.3%) x (84.4%) = 0.29% Cu
(Cu price x Cu payability) (Cu plant recovery) (6,834 x 98.7%) (83.9%)
57
ANNUAL REPORT 2019 BUSINESS REVIEW
OR E RES ER VE AND MINERAL RESOURCE STATE ME N TS cont inued
The combined estimated Probable Ore Reserves for the Prieska Project amount to 13.62Mt grading 1.1% Cu and 3.2% Zn, including
143kt copper metal tonnes and 433kt zinc metal tonnes, (Cu-Eq of 268kt metal tonnes at 2.0%).
Prieska Project Ore Reserves Estimate (Effective Date: 16 June 2019)
Grade
(%)
Deposit
2.2
+105 Level
2.0
Deep Sulphide
Total
2.0
Project Ore Reserves calculated using financial assumptions and modifying factors stated in the Study. Tonnes are rounded to thousands,
which may result in rounding errors.
Ore Reserve
classification
Probable
Probable
Probable
Metal tonnes
(Kt)
16
417
433
Metal tonnes
(Kt)
11
257
268
Tonnage
(Mt)
0.48
13.14
13.62
Grade
(%)
3.3
3.2
3.2
Grade
(%)
1.5
1.0
1.1
Cu
Metal tonnes
(Kt)
7
136
143
Zn
Cu equivalent
Prieska Project Mineral Resource and Ore Reserve Annual Comparison
Prieska Project
Financial year
July 2017 – June 2018
July 2018 – June 2019
Mineral
Resource
Deep
Sulphide
+105m
Level
Tenement
Repli and
Vardocube
Classification
Tonnage
(Mt)
Probable Ore Reserve
Indicated Mineral Resource
-
-
Inferred Mineral Resource
27.8
Probable Ore Reserve
Indicated Mineral Resource
Inferred Mineral Resource
Probable Ore Reserve
-
1.2
0.3
-
1.2
Inferred Mineral Resource
28.2
Cu
(Kt)
-
-
1.2
-
2.4
0.6
-
2.4
1.3
Zn
(%)
Tonnage
(Mt)
-
-
13.14
18.5
3.8
-
2.6
0.9
-
10.2
0.48
0.6
1.1
13.6
2.6
19.1
3.8
11.3
Cu
(Kt)
1.0
1.2
1.1
1.5
1.5
1.4
1.1
1.2
1.2
Totals
Indicated Mineral Resource
Zn
(%)
3.2
3.6
4.1
3.3
3.1
1.4
3.2
3.6
3.8
Refer
ASX release
26 Jun 2019
18 Dec 2018
9 Apr 2018
18 Dec 2018
26 Jun 2019
8 Feb 2018
15 Jan 2019
8 Feb 2018
15 Jan 2019
26 June 2019
9 Apr 2018
15 Jan 2019
8 Feb 2018
15 Jan 2019
Competent Persons’ Statements – Prieska Project
The information in this report that relates to Exploration Results is not in contravention of the 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) and has been compiled and assessed under the
supervision of Mr Errol Smart, Orion’s Managing Director. Mr Smart (PrSciNat) is registered with the South African Council for Natural
Scientific Professionals, a Recognised Overseas Professional Organisation (ROPO) for JORC purposes and has sufficient experience that is
relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent
Person as defined in the 2012 Edition of the JORC Code. Mr Smart consents to the inclusion in this report of the matters based on his
information in the form and context in which it appears.
The information in this report that relates to Mineral Resources is not in contravention of the JORC Code and has been compiled and assessed
under the supervision of Mr Sean Duggan, a Director and Principal Analyst at Z Star Mineral Resource Consultants (Pty) Ltd. Mr Duggan (Pr.
Sci.Nat) is registered with the South African Council for Natural Scientific Professionals (Registration No. 400035/01), an ROPO for JORC
purposes and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the JORC Code. Mr Duggan consents to the inclusion in
this report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to the Ore Reserves is based on mining-related information incorporated under the supervision of
Mr William Gillespie, a Competent Person who is a fellow of the Institute of Materials, Minerals and Mining (IMMM), a Recognised Overseas
Professional Organisation, (ROPO). Mr Gillespie takes overall responsibility for the Ore Reserve aspects of the release as Competent Person.
Mr Gillespie is an employee of A & B Global Mining Consultants (Pty) Ltd which contracts to Orion. Mr Gillespie has sufficient experience that is
relevant to the type of mining and type of deposit under consideration and to the activities being undertaken to qualify as a Competent Person
as defined in the 2012 Edition of the JORC Code. Mr Gillespie consents to the inclusion in this report of the matters based on his information
in the form and context in which it appears.
The information in this report that relates to the Metallurgy is based on mining information independently reviewed by Mr Val Coetzee (an
employee of DRA Projects (Pty) Ltd), a registered Professional Engineer with the Engineering Council of South Africa, a Recognised Overseas
Professional Organisation, (ROPO), as Competent Person. Mr Coetzee consents to the inclusion in this release of the Metallurgical and
Processing matters based on his information in the form and context in which it appears.
58
Figure 25: Plan showing mafic intrusion sub-outcrop and drilling at the Jacomynspan resource area
Intrusion sub-outcrop
Historic Drill Hole Collar
African Nickel Drill Hole Collar
Jacomynspan Project Mineral Resources
The Mineral Resource Estimate for the Namaqua-Disawell Jacomynspan Project is as reported in the 2018 annual report. There are
no material changes to the estimate.
A maiden Mineral Resource Estimate, based on drilling data from 1971 to 2012 (Figure 24), reported at a 0.4% Ni cut-off grade
gives 6.8 Mt containing 39,000 tonnes Ni at 0.5% Ni, 22,000 tonnes Cu at 0.3% Cu and 1,800 tonnes Co at 0.03% Co (refer ASX
release 8 March 2018). The Mineral Resources for the Jacomynspan Project were previously reported (refer ASX release 14 July
2016) in accordance with the SAMREC Code (2007) as a “qualifying foreign resource estimate” as defined in the ASX Listing Rules.
The Mineral Resources have subsequently been reassessed by the MSA Group (Pty) Ltd on behalf of the Company and reported
in compliance with the JORC Code, 2012.
Indicated and Inferred Mineral Resource Statement for the Jacomynspan Project on the Namaqua Mining Right using a 0.4% Ni cut-off
Mineral Resource Grade-Tonnage Table for the Jacomynspan Project at a 0.40% Ni cut-off grade
Ni
Cu
Co
Pt
Pd
Au
Classification
Indicated
Inferred
Cut off
% Ni
0.40
Volume
(m3)
Grade
Metal
Grade
Metal
Grade
Metal
Grade
Metal
Grade
Metal
Grade
Metal
Tonnes
(%)
tonnes
(%)
tonnes
(%)
tonnes
(g/t)
ounces
(g/t)
ounces
(g/t)
ounces
584,000 1,780,000
0.55 10,000
0.29
5,000
0.03
1,000
0.17 10,000
0.11
6,000
0.07
4,000
0.40 1,647,000 5,056,000
0.58 29,000
0.35 18,000
0.03
1,000
0.19 31,000
0.13 21,000
0.07 11,000
Indicated and Inferred Mineral Resource for the Jacomynspan Project at various cut-offs
Indicated Mineral Resource for the Jacomynspan Project at various Ni cut-off grades
Cut off
% Ni
Volume
(m3)
Tonnes
Grade
(%)
Metal
tonnes
Grade
(%)
Metal
tonnes
Grade
(%)
Metal
tonnes
Grade
(g/t)
Metal
ounces
Grade
(g/t)
Metal
ounces
Grade
(g/t)
Metal
ounces
Ni
Cu
Co
Pt
Pd
Au
0.20 11,252,000 33,000,000
0.26
86,000
0.18
58,000
0.25
4,205,000 12,393,000
0.32
40,000
0.20
25,000
0.30
1,501,000
4,461,000
0.42
19,000
0.24
11,000
0.40
0.50
584,000
1,780,000
0.55
10,000
284,000
872,000
0.66
6,000
0.29
0.37
5,000
3,000
0.02
0.02
0.02
0.03
0.04
Note: Mineral Resource stated at 0.4% cut-off.
6,000
3,000
1,000
1,000
0.10 101,000
0.05
53,000
0.04
44,000
0.11
45,000
0.06
25,000
0.05
19,000
0.14
20,000
0.08
12,000
0.17
10,000
300
0.16
5,000
0.11
0.11
6,000
3,000
0.05
0.07
0.07
8,000
4,000
2,000
59
ANNUAL REPORT 2019 BUSINESS REVIEW
OR E RES ER VE AND MINERAL RESOURCE STATE ME N TS cont inued
Inferred Mineral Resource for the Jacomynspan Project at various Ni cut-off grades
Ni
Cu
Co
Pt
Pd
Au
Cut off
% Ni
Volume
(m3)
Tonnes
Grade
(%)
Metal
tonnes
Grade
(%)
Metal
tonnes
Grade
(%)
Metal
tonnes
Grade
(g/t)
Metal
ounces
Grade
(g/t)
Metal
ounces
Grade
(g/t)
Metal
ounces
0.20 11,022,000 32,304,000
0.29
94,000
0.20
63,000
0.25
3,974,000 11,863,000
0.42
49,000
0.26
31,000
0.30
2,303,000
7,008,000
0.52
36,000
0.31
22,000
0.40
1,647,000
5,056,000
0.58
29,000
0.35
18,000
0.50
982,000
3,041,000
0.67
20,000
0.41
13,000
0.02
0.02
0.02
0.03
0.03
6,000
2,000
2,000
1,000
1,000
0.10 108,000
0.06
60,000
0.04
44,000
0.15
55,000
0.09
34,000
0.05
20,000
0.19
42,000
0.12
27,000
0.06
14,000
0.19
31,000
0.13
21,000
0.07
11,000
0.17
16,000
0.12
11,000
0.07
7,000
Note: Mineral Resource stated at 0.4% cut-off.
Namaqua-Disawell Project Mineral Resource and Ore Reserve Annual Comparison
Namaqua-Disawell Project
Financial Year
July 2017 – June 2018
July 2018 – June 2019
Tenement
Mineral Resource
Classification
Namaqua-
Disawell
Indicated Mineral Resource
Jacomynspan
Inferred Mineral Resource
Indicated Mineral Resource
Inferred Mineral Resource
Note: Mineral Resource stated at 0.4% cut-off.
Tonnage
Mt
1.78
5.06
1.78
5.06
Ni
(%)
0.6
0.6
0.6
0.6
Cu
(%)
Co
(%)
Pt
(g/t)
Pd
(g/t)
Tonnage
Mt
Ni
(%)
Cu
(%)
Refer ASX
release
0.3 0.03
0.4 0.03
0.3 0.03
0.4 0.03
0.2
0.2
0.2
0.2
0.1
0.1
2.6
3.8
No material change 8 Mar 2018
No material change 8 Mar 2018
No material change 8 Mar 2018
No material change 8 Mar 2018
Competent Person’s Statement – Jacomynspan Project
The information in this report that relates to the Mineral Resource at the Jacomynspan Project is based on information compiled
by Mr Jeremy Charles Witley (BSc Hons, MSC (Eng.)), a Competent Person who is registered with the South African Council
for Natural Scientific Professionals (Registration No. 400181/05), a ‘Recognised Professional Organisation’ (RPO) included in
a list posted on the ASX website from time to time. Mr Witley is a Principal Resource Consultant at the MSA Group Pty Ltd
and a consultant to Orion. Mr Witley has sufficient experience that is relevant to the style of mineralisation and type of deposit
under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of
the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Witley consents to the
inclusion in the report of the matters based on his information in the form and context in which it appears.
60
BUSINESS REVIEW
CO RP O RATE
The Company recorded a loss of $10.75 million after tax for the
full year ended 30 June 2019. The Company continues to focus
strongly on the development of the Prieska Project as well as
exploration, evaluation and development within its Areachap
exploration projects in South Africa. A total of $15 million in
exploration expenditure was incurred during the year. Cash
received from financing activities totalled $19 million.
Cash on hand at the end of the year was $1.8 million.
Capital raisings
During the financial year, the Company raised $19.05 million
before costs to fund its operations primarily in South Africa and
for working capital. In summary, key capital raisings comprised:
• In June 2018, the Company announced an $11 million
capital raising at an issue price of 3.7 cents per fully paid
ordinary share (Share). The capital raising occurred in two
stages, being:
• Tranche 1 – 91.6 million Shares to raise $3.39 million
were issued on 29 June 2018, using the Company’s 15%
placement capacity under ASX Listing Rule 7.1. The issue
of Shares was subsequently ratified by shareholders at the
Company’s general meeting held on 3 August 2018; and
• Tranche 2 – 212.5 million Shares to raise $7.86 million were
issued on 15 August 2018 as approved by shareholders at
the Company’s general meeting held on 3 August 2018.
In addition to the placements, the Company also obtained
shareholder approval at the general meeting held on 3 August
2018, to enable the Company’s Chairman, Denis Waddell,
to subscribe for 6.8 million Shares at 3.7 cents per Share to
raise $0.25 million and for Tembo Capital Mining Fund II LP
and its affiliated entities (Tembo Capital), Orion’s cornerstone
shareholder to subscribe for 172.9 million Shares at 3.7 cents
per Share. The Shares issued to Tembo Capital were issued
in consideration for reducing the amount repayable to Tembo
Capital under the loan facility between the Company and Tembo
Capital, pursuant to which Tembo Capital advanced $6 million
in funds to Orion (excluding capitalised interest and fees) (refer
below for further detail).
• In April 2019, the Company announced a pivotal $8 million
capital raising underpinned by a group of high-profile South
African investors as part of a proposed restructure of the
Company’s BEE equity participation at project level, achieving
accelerated compliance with the ownership aspects of
South African Mining Charter 3 (refer BEE restructure section
below). The capital raising, conducted by way of placement,
comprised the issue of 200.9 million Shares at an issue price
of 4.0 cents per Share, together with one free attaching
unlisted option for every two Shares issued (exercise price of
$0.05 and an expiry date of 31 October 2019). The placement
included approximately $4 million placed to experienced BEE
entrepreneurs, of which $2 million was placed to incoming
BEE equity investors who will also invest at the Prieska Project
level. Tembo Capital also confirmed its continued support of
Orion through subscribing for $2 million in Tranche 1 of the
placement. The placement occurred in two stages, being:
• Tranche 1 – In April 2019, the Company issued 117.23 million
Shares and 58.61 million options, to raise $4.69 million,
resulting from a receipt of funds from investors for Tranche 1
commitments; and
• Tranche 2 – Following year end and completed in September
2019, a total of 83.71 million Shares and 41.85 million options
were issued, to raise $3.34 million.
Following the positive outcomes of the 10-year Foundation Phase
BFS in June 2019, along with the focus to prepare the technical
and administrative aspects of the Prieska Project for execution,
the Company continues to advance project financing discussions
with the intention of having the project in construction phase during
calendar year 2020.
Additional information as to the Company’s capital raising
activities forms part of the Annual Financial Report.
Loan facilities
1. Bridge loan and convertible loan facilities
The Company announced on 18 August 2017 that it had entered
into a loan facility agreement with Tembo Capital, pursuant to
which Tembo Capital advanced $6 million in funds to Orion
(excluding capitalised interest and fees) (Bridge Loan).
In June 2018, the Company announced in addition to the
$11 million placement (refer above), that Tembo Capital had
confirmed its continued support of Orion through subscribing for
$6.4 million in Shares, at an issue price of 3.7 cents per Share,
being the issue price for Shares issued under the placement.
Orion agreed with Tembo Capital, that Tembo Capital’s Share
subscription be issued in consideration for reducing the amount
re-payable to Tembo Capital under the Bridge Loan at a deemed
issued price of 3.7 cents per Share, being the same issue price
as the shares being offered under the placements. The balance
of the Bridge Loan (including accrued interest) following this
repayment was $0.58 million.
At the end of the reporting period, the Bridge Loan had been
extinguished in full as the Company announced in January
2019, that Tembo Capital had continued its strong support of
the Company, through providing a new unsecured $3.6 million
loan facility (Loan Facility). Under the terms of the Loan Facility,
Tembo Capital may at its election, have the balance of the Loan
Facility (including capitalised interest and fees) (Outstanding
Amount) repaid by the issue of Shares to Tembo Capital at a
deemed issue price of 2.6 cents per Share (subject to receipt
of shareholder approval), being the same conversion price as
the 2017 Convertible Notes (refer to Annual Financial Report
for further detail). Should Tembo elect not to have repayment
of the Outstanding Amount satisfied by the issue of Shares,
the Outstanding Amount must be repaid by the Company on
25 January 2020.
61
ANNUAL REPORT 2019 BUSINESS REVIEW
C OR P OR ATE continued
Additional information as to the Bridge Loan and Convertible
Loan Facility forms part of the Annual Financial Report.
2. Redeemable preference shares
A subscription agreement was entered into between Repli and
Anglo American sefa Mining Fund (AASMF) on 2 November
2015. Under the terms of the agreement, AASMF subscribed for
15.75 million Repli redeemable preference shares at a
subscription price of ZAR1 per redeemable preference share.
On 5 November 2015, AASMF paid the subscription price of
ZAR15.75 million (~$1.6 million) to Repli and the preference
shares were issued to AASMF by Repli. In March 2019, the
Company announced that it had reached agreement with
AASMF for Repli to redeem the preference shares held by
AASMF for Shares. Shareholder approval was obtained at a
general meeting held on 7 June 2019 and following reporting
period end, on 5 July 2019, Repli voluntarily redeemed the
preference shares, in consideration for which the Company
issued 77.57 million Shares to AASMF (redemption amount
payable ZAR25.05 million (~2.05 million).
Additional information as to the redeemable preference shares
forms part of the Annual Financial Report.
BEE restructure
In April 2019, Orion entered into an MoU with each of the
existing BEE participants (being the Mosiapoa Family Trust
(Mosiapoa), Power Matla (Pty) Ltd (Power Matla) and African
Exploration and Mining Finance Corporation (SOC) Ltd (AEMFC)
in its South African subsidiaries (being Repli, Vardocube,
Bartotrax (Pty) Limited (Bartotrax) and Rich Rewards Trading
437 (Pty) Limited (Rich Rewards). In terms of those Memoranda
of Agreements, the existing BEE participants agreed to
exchange their shares in Orion’s South African subsidiaries for
approximately 135 million JSE-listed Orion shares. At the same
time, Orion entered into a Memorandum of Agreement with
two BEE entrepreneurs, Black Star Minerals (Pty) Ltd (Black
Star) and Kolobe Nala Investment Company (Pty) Ltd (KNI), in
terms of which they agreed to acquire a 20% interest in Repli,
as well as a 20% interest in Orion’s ownership interest in its
Jacomynspan Project.
In August 2019, Orion concluded a Revised Memorandum of
Agreement with Black Star, KNI and Safika Resources (Pty) Ltd
(Safika) in terms of which Safika joined Black Star and KNI as part
of the BEE consortium which would acquire the 20% interest in
Repli and the 20% interest in Orion’s ownership interest in its
Jacomynspan Project.
On 11 September 2019, a major component of the BEE
Restructure was implemented. In terms of these transactions,
Mosiapoa and Power Matla exchanged their shares in Repli,
Rich Rewards and Bartotrax (as applicable) for 48.48 million
and 37.58 million Orion Shares, respectively, at a deemed issue
price of $0.0314 per Share. In a simultaneous transaction,
Prieska Resources (Pty) Ltd (Prieska Resources), acquired an
effective 20% interest in Repli for a purchase consideration of
ZAR142.78 million (~$14.08 million), with this acquisition being
62
vendor financed by Orion. Prieska Resources is a BEE company
whose
(37.97%)
Black
shares
and Safika (44.72%).
(17.31%),
held
Star
KNI
are
by
vendor
The
comprises two parts, namely:
finance
advanced
by
Orion
to
Prieska
Resources
•
•
for
loan
secured
ZAR10.14
South
a
African Prime Interest Rate, repayable within 12 months after
the project finance for the Prieska Project is closed; and
interest
million
plus
at
preference shares in Prieska Resources issued to Orion to the
value of ZAR132.64 million which are redeemable by Prieska
Resources at any time prior to the 8th anniversary of their date
of issue at an IRR of 12%, failing which any of the preference
shares held by Orion remaining after the 8th anniversary, will
pro
converted
in
be
shares
a
Prieska
maximum
in
South
subject
African laws, an equivalent number of shares directly in Repli.
ordinary
49%
of
compliance
up
Resources
automatically
the
with
Resources
into
of
to
or,
Prieska
shares
rata
to
by
the
with
Prieska
Resources,
Simultaneously
the
acquisition
Orion Siyathemba Community Trust (Prieska Community Trust)
and the Orion Siyathemba Employees Trust (Prieska Employees
Trust) each acquired an effective 5% interest in Repli. While this
acquisition was for nominal consideration, in terms of prevailing
Mining Charter 3 legislation, Orion and Prieska Resources will be
entitled to recover the costs incurred on behalf of the two trusts
in developing the Prieska Project from future project cash flows.
of
the
remains
of
by
remaining
exchange
Vardocube
BEE
Mosiapoa
restructure,
and
components
shares
the
Of
the
AEMFC
proposed
certain
in
other
conditions
by
component
ownership
Prieska
interest in its Jacomynspan project is also being progressed and
is expected to be implemented early in Q4 2019.
satisfaction
progressed.
the
Orion’s
precedent
the
of
Resources
subject
are
restructure,
of
The
acquisition
the
to
being
being
in
BEE
of
interest
which
20%
its
the
the
year,
financial
Company
continued
Earn-in projects
regional
During
exploration programs and progressed its two earn-in projects.
The Namaqua-Disawell project reached the threshold for 50%
earn
required
the
regulatory approvals to transfer control of the Namaqua-Disawell
entities
its
point,
Company,
subsidiary, will hold 50% of shares on issue.
Company
obtaining
process
through
Orion,
which
The
the
in.
its
to
at
of
in
is
11
application
received
approved
Company
was
confirmation
an
and
In September 2019, the
that the Section
additional
1%holding in Masiqhame Trading 855 (Pty) Ltd was
transferred to Orion. The additional 1% also gives the Company
control of the project, which forms part of the regional
exploration portfolio of ground holding by the Company. The
earn-in agreement allows for an additional 23% to be earned
by the Company, should it choose to do so, taking its overall
stake in Masiqhame to 73%.
SECTION
4
FINANCIAL
STATEMENTS
ANNUAL REPORT 2019
63
DIR ECT OR S’ REPORT
Directors’ Report
Directors’ Report
Your directors submit their report for the year ended 30 June 2019.
Your directors submit their report for the year ended 30 June 2019.
BOARD OF DIRECTORS
BOARD OF DIRECTORS
Director
Director
Designation
Designation
Qualifications, experience & expertise
Qualifications, experience & expertise
ACA, FAICD
ACA, FAICD
Non-
Non-
executive
executive
Chairman
Chairman
Mr Denis
Waddell
Mr Denis
Waddell
Appointed 27
Appointed 27
February
February
2009
2009
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.
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
in corporate finance and operations management of exploration and mining
companies.
During the past 35 years, Mr Waddell has gained considerable experience
in corporate finance and operations management of exploration and mining
companies.
Mr Errol
Mr Errol
Smart
Smart
Appointed 26
Appointed 26
November
November
2012
2012
Managing
Director
Managing
Director
BSc(Hons) Geology (University of Witwatersrand)
BSc(Hons) Geology (University of Witwatersrand)
NHD Economic Geology (Technikon Witwatersrand)
NHD Economic Geology (Technikon Witwatersrand)
(PrSciNat)
(PrSciNat)
None
None
Directorships
Directorships
of other listed
of other listed
companied
companied
None
None
Other roles
Other roles
held during
held during
the year
the year
Chairman of
Chairman of
the Audit
the Audit
Committee
Committee
Chief
Chief
Executive
Executive
Officer
Officer
Member of the
Member of the
Audit
Audit
Committee
Committee
Member of the
Member of the
Audit
Audit
Committee
Committee
---
---
Mr Smart is a geologist, registered with the South African Council of
Natural Scientific Professionals, a Recognised Overseas Professional
Organisation in terms of the 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves
(JORC) purposes. Mr Smart has 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 executive
roles have been on several boards of companies listed on both the TSX
and ASX.
Mr Smart is a geologist, registered with the South African Council of
Natural Scientific Professionals, a Recognised Overseas Professional
Organisation in terms of the 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves
(JORC) purposes. Mr Smart has 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 executive
roles have been on several boards of companies listed on both the TSX
and ASX.
BSc Economics
BSc Economics
UMS Limited
UMS Limited
Mr Haller is a partner of Zachary Capital Management, providing advisory
services to a number of private investment companies, including Silja
Investment Ltd, focusing on the principal investment activities for these
companies. From 2001 to 2007 Mr Haller worked in the corporate finance
division at JP Morgan in the U.S, advising on corporate mergers and
acquisitions as well as financing in both the equity and debt capital
markets.
Mr Haller is a partner of Zachary Capital Management, providing advisory
services to a number of private investment companies, including Silja
Investment Ltd, focusing on the principal investment activities for these
companies. From 2001 to 2007 Mr Haller worked in the corporate finance
division at JP Morgan in the U.S, advising on corporate mergers and
acquisitions as well as financing in both the equity and debt capital
markets.
Shaft Sinkers
PLC
Shaft Sinkers
PLC
(former)
(former)
BSc Mining Geology (Cardiff University)
BSc Mining Geology (Cardiff University)
None
None
Mr Palmer has 12 years’ experience working with entities in Australia,
including 8 years with Dominion Mining. In 1994 Mr Palmer joined NM
Rothschild & Sons Limited in the London mining project finance team
assessing mines and projects globally. In 1997, Mr Palmer moved to
the investment banking team at UBS to focus on global mergers and
acquisitions, equity and debt financing in the mining sector. Mark ran
the EMEA mining team at UBS for 8 years. Mr Palmer joined Tembo
Capital as Investment Director in 2015.
Mr Palmer has 12 years’ experience working with entities in Australia,
including 8 years with Dominion Mining. In 1994 Mr Palmer joined NM
Rothschild & Sons Limited in the London mining project finance team
assessing mines and projects globally. In 1997, Mr Palmer moved to
the investment banking team at UBS to focus on global mergers and
acquisitions, equity and debt financing in the mining sector. Mark ran
the EMEA mining team at UBS for 8 years. Mr Palmer joined Tembo
Capital as Investment Director in 2015.
Non-
Non-
executive
executive
Director
Director
Mr
Mr
Alexander
Alexander
Haller
Haller
Appointed 27
Appointed 27
February
February
2009
2009
Mr Mark
Mr Mark
Palmer
Palmer
Appointed 31
January 2018
Appointed 31
January 2018
Non-
Non-
executive
executive
Director
Director
64
FINANCIAL STATEMENTS
Directors’ Report (continued)
Director
Designation
Qualifications, experience & expertise
Other roles held
during the year
Directorships
of other listed
companied
Nzuri Copper
Limited
Mr Thomas
Borman
Appointed 16
April 2019
Non-
executive
Director
Mr Godfrey
Gomwe
Appointed 16
April 2019
Non-
executive
Director
BCom (Hons) (University of Pretoria)
Mr Borman is a respected and highly experienced global mining
executive who served more than 11 years working for the BHP Billiton
Group in various senior managerial roles, including that of Chief
Financial Officer of an Australian-listed mining company. He also held
senior roles in strategy and business development, and served as the
project manager for the merger integration transaction between BHP
Limited and Billiton.
After leaving BHP Billiton in 2006, Mr Borman joined Warrior Coal
Investments (Proprietary) Limited, where he formed part of the
executive team which established and consolidated the portfolio of
assets which became the Optimum Group of companies. Optimum
listed on the Johannesburg Stock Exchange in 2010, and was
subsequently acquired by Glencore for R8.5 billion in March 2012.
Bachelor of Accountancy (Hons) (University of Zimbabwe)
AECI limited
Econet
Wireless
Zimbabwe
Limited
Masters Business Leadership (University of South Africa)
CA (Zimbabwe)
Mr Gomwe has extensive experience as an executive in metals and
mining industries. He is the former Chief Executive Officer of Anglo
American’s Thermal Coal business, whose responsibilities included
oversight over Anglo’s Manganese interests in the joint venture with
BHP.
Previously Executive Director of Anglo American South Africa until
August 2012, his career included roles as Head of Group Business
Development Africa, Finance Director and Chief Operating Officer of
Anglo American South Africa. Previously, Godfrey was Chairman and
Chief Executive of Anglo American Zimbabwe Limited. He also served
on a number of Anglo American Operating Boards and Executive
Committees including Kumba Iron Ore, Anglo American Platinum,
Highveld Steel & Vanadium and Mondi South Africa, the latter two in
the capacity of Chairman.
Mr Michael
Hulmes
Appointed 17
April 2018
Resigned 15
April 2019
Non-
executive
Director
BSc Mining Engineering (Royal School of Mines)
MBA
Transatlantic
Mining
Corporation
Mr Hulmes is a mining engineer with over 30 years’ experience in the
mining industry having held senior management roles in Australia,
Papua New Guinea, Portugal, Spain, Saudi Arabia, Africa and China.
He has extensive experience in zinc, copper, gold and nickel mining
operations. As Managing Director, Mr Hulmes was responsible for the
large Neves-Carvo – VMS Copper Zinc and Aguablanca – Copper
Nickel Mines for Lundin Mining in Portugal and Spain respectively.
Prior senior management positions include companies such as the Ok
Tedi Mine in Papua New Guinea, Citadel Resources in Saudi Arabia
and Barrick’s Australian operations. Michael was most recently the
General Manager of the Caijiaying Zinc/Gold Mine at Hua Ao Mining
Industry Company in China.
---
---
---
65
ANNUAL REPORT 2019
Directors’ Report (continued)
Directors’ Report (continued)
COMPANY SECRETARY
COMPANY SECRETARY
The name and details of the Company Secretary in office during the financial year and until the date of this report is as follows:
The name and details of the Company Secretary in office during the financial year and until the date of this report is as follows:
Name
Name
Experience and qualifications
Experience and qualifications
Mr Martin
Mr Martin
Bouwmeester
Bouwmeester
Company Secretary
Company Secretary
(Appointed 1 April
(Appointed 1 April
2016)
2016)
Mr Bouwmeester is an FCPA with over 23 years' experience in exploration, mine development and
operations and was Chief Financial Officer, Company Secretary and Business Development Manager
of Perseverance Corporation Limited. Mr Bouwmeester was a key member of the team that evaluated
the sulphide mineralisation at the Fosterville Gold Mine; an initiative that led to the discovery and
definition of more than 3M ounces of gold and the funding for the development of the mine and
processing plant to exploit those resources. Mr Bouwmeester also holds the position of Chief
Financial Officer with the Company.
Mr Bouwmeester is an FCPA with over 23 years' experience in exploration, mine development and
operations and was Chief Financial Officer, Company Secretary and Business Development Manager
of Perseverance Corporation Limited. Mr Bouwmeester was a key member of the team that evaluated
the sulphide mineralisation at the Fosterville Gold Mine; an initiative that led to the discovery and
definition of more than 3M ounces of gold and the funding for the development of the mine and
processing plant to exploit those resources. Mr Bouwmeester also holds the position of Chief
Financial Officer with the Company.
CORPORATE STRUCTURE
CORPORATE STRUCTURE
Orion Minerals Ltd (Orion or Company) is a company limited by shares that is incorporated and domiciled in Australia.
Orion Minerals Ltd (Orion or Company) is a company limited by shares that is incorporated and domiciled in Australia.
The Company has prepared a consolidated financial report incorporating the entities that it controlled during the financial
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).
year, including those newly acquired (referred to as the Group).
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was exploration, evaluation and development of base metal, gold and
platinum-group element projects in South Africa (Areachap Belt, Northern Cape). The Company also holds interests in
the Fraser Range Nickel-Copper and Gold Project in Western Australia and the Walhalla Polymetals Project in Victoria.
There were no significant changes in the nature of the Group’s principal activities during the year.
The principal activity of the Group during the year was exploration, evaluation and development of base metal, gold and
platinum-group element projects in South Africa (Areachap Belt, Northern Cape). The Company also holds interests in
the Fraser Range Nickel-Copper and Gold Project in Western Australia and the Walhalla Polymetals Project in Victoria.
There were no significant changes in the nature of the Group’s principal activities during the year.
Corporate
Corporate
Results of operations – the Group
Results of operations – the Group
The Group recorded a loss of $10.75M (2018: $8.83M) after tax for the year. The result is driven primarily by exploration
The Group recorded a loss of $10.75M (2018: $8.83M) after tax for the year. The result is driven primarily by exploration
expenditure incurred of $3.05M which, under the Group’s deferred exploration, evaluation and development policy, did not
expenditure incurred of $3.05M which, under the Group’s deferred exploration, evaluation and development policy, did not
qualify to be capitalised and was expensed and finance expenses of $1.76M, principally related to bridge loan fees and
qualify to be capitalised and was expensed and finance expenses of $1.76M, principally related to bridge loan fees and
interest of $0.9M and convertible note interest of $0.8M.
interest of $0.9M and convertible note interest of $0.8M.
Net cash used in operating activities and investing activities totalled $18.78M (2018: $22.08M) and included payments for
exploration and evaluation of $15.06M (2018: $17.65M). The Group continues to focus strongly on exploration within its
Areachap Projects (South Africa). Net cash from financing activities totalled $15.45M (2018: $23.49M).
Net cash used in operating activities and investing activities totalled $18.78M (2018: $22.08M) and included payments for
exploration and evaluation of $15.06M (2018: $17.65M). The Group continues to focus strongly on exploration within its
Areachap Projects (South Africa). Net cash from financing activities totalled $15.45M (2018: $23.49M).
Cash on hand at the end of the year was $1.4M (2018: $4.8M).
Cash on hand at the end of the year was $1.4M (2018: $4.8M).
The basic loss per share for the Group for the year was 0.53 cents and diluted loss per share for the Group for the year
was 0.53 cents (2018: loss per share 0.76 cents and diluted loss per share 0.76 cents). No dividend has been paid during
or is recommended for the financial year ended 30 June 2019.
The basic loss per share for the Group for the year was 0.53 cents and diluted loss per share for the Group for the year
was 0.53 cents (2018: loss per share 0.76 cents and diluted loss per share 0.76 cents). No dividend has been paid during
or is recommended for the financial year ended 30 June 2019.
Business Strategies
The Company will continue to focus on exploration, evaluation and development of base metal, gold and platinum-group
Business Strategies
element projects in South Africa (Areachap Belt, Northern Cape).
The Company will continue to focus on exploration, evaluation and development of base metal, gold and platinum-group
element projects in South Africa (Areachap Belt, Northern Cape).
Risks to the Business
Risks to the business are rated on the basis of their potential impact on the Group as a whole after taking into account
current mitigating actions. Investors should be aware that the below list is not an exhaustive list and that there are a
number of other risks associated with an investment in the Company. The Group regularly reviews the possible impact of
these risks and seeks to minimise their impact through its internal controls, risk management policy, and corporate
governance. The following describes the principal risks and uncertainties that could materially impact the Group:
Risks to the Business
Risks to the business are rated on the basis of their potential impact on the Group as a whole after taking into account
current mitigating actions. Investors should be aware that the below list is not an exhaustive list and that there are a
number of other risks associated with an investment in the Company. The Group regularly reviews the possible impact of
these risks and seeks to minimise their impact through its internal controls, risk management policy, and corporate
governance. The following describes the principal risks and uncertainties that could materially impact the Group:
• Capital - Each of the Group’s key exploration targets remain in the exploration and evaluation phase. Future
exploration programs require substantial levels of expenditure to ensure that Group’s tenements are held in good
standing. The Group is currently reliant on the capital and debt markets to fund its ongoing operations and
therefore any unforeseeable events in these markets may impact the Group’s ability to finance its future
exploration projects;
• Capital - Each of the Group’s key exploration targets remain in the exploration and evaluation phase. Future
exploration programs require substantial levels of expenditure to ensure that Group’s tenements are held in good
standing. The Group is currently reliant on the capital and debt markets to fund its ongoing operations and
therefore any unforeseeable events in these markets may impact the Group’s ability to finance its future
exploration projects;
66
DIRECTORS’ REPORT continuedFINANCIAL STATEMENTS
Directors’ Report (continued)
• Sovereign risk – The Group’s exploration, evaluation and development activities are carried out in South Africa
and Australia. As a result, the Group is subject to political, social, economic and other uncertainties including, but
not limited to, changes in policies or the personnel administering them, foreign exchange restrictions, changes of
law affecting foreign ownership, currency fluctuations, royalties and tax increases in that country. Other potential
issues contributing to uncertainty such as repatriation of income, exploration licensing, environmental protection
and government control over mineral properties should also be considered. Potential risk to the Group’s activities
may occur if there are changes to the political, legal and fiscal systems which might affect the ownership and
operation of the Group’s interests in South Africa. This may also include changes in exchange control systems,
expropriation of mining rights, changes in government and in legislative and regulatory regimes.
•
•
Title risk 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. These tenements are subject to periodic
review and compliance, including the relinquishment of certain areas. As a result, there is no guarantee that these
areas of interest will be renewed in the future or if there will be sufficient funds available to meet the attaching
minimum expenditure commitments when they arise.
Title risk and Native Title - It is also possible that in relation to the Australian tenements which the Group has an
interest in or will in the future acquire such an interest, there may be areas over which legitimate common law
native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Group to gain access
to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase
to the development and mining phases of operations may be adversely affected;
• Resources and Reserve estimates - There are inherent uncertainties in estimating reserve and resource
estimates as it requires significant subjective judgements and determinations based on the available geological,
technical, and economic information. Estimates and assumptions that were previously valid may change
significantly when new information or techniques become available and therefore may require restatement; 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:
•
September
On
24
requesting
Noteholders
current
by
held
conversion
or
on
liabilities
will
Noteholders
2019,
of
before
Company
Convertible
maturity
$5.8M
the
the
the
by
certain
date,
(as
assets
reduce
over
announced
Notes
held
receipt
by
being
30
notes
Company
10.3M
the
of
of
them
conversion
into
September
were
converted
Shares.
2019.
into
notices
The
Upon
all
from
Company
issue
in
be
the
of
April
2019)
released.
will
Convertible
issue
Shares,
and
Noteholders,
the
to
Shares
Group’s
the
security
the
Shares
will
and
its
subsidiaries
• On 12 September 2019, the Company announced completion of the BEE restructure, whereby 86M Shares were
issued to satisfy, in full, the repurchase of shares held by existing BEE investors in the Company’s subsidiary
entities Repli, Rich Rewards Trading 437 (Pty) Ltd and Bartotrax (Pty) Ltd. The final component of the BEE
restructure is expected to be implemented shortly.
•
The Company announced on 16 April 2019 an $8M capital raising comprising the issue of 200.9M Shares at an
issue price of $0.04 per Share, together with one free attaching unlisted option for every two Shares issued
(100.47M options at an exercise price of $0.05 and an expiry date of 31 October 2019), to be conducted via a
placement to sophisticated and professional investors (Placement). The Placement was made up of $4.69M in
Tranche 1 issued in April 2019 and, subject to shareholder approval, which was obtained at a general meeting
on 7 June 2019, an additional $3.34M in Tranche 2. Following year end:
o
6 September 2019, the Company announced an issue of 20M Shares and 10M unlisted options as part
of the placement under Tranche 2;
67
ANNUAL REPORT 2019
Directors’ Report (continued)
o
o
9 August 2019, the Company announced an issue of 33.71M Shares and 16.85M unlisted options as
part of the placement under Tranche 2; and
22 July 2019, the Company announced an issue of 30M shares and 15M unlisted options as part of the
placement under Tranche 2;
• On 4 March 2019, the Company announced that it had reached agreement with AASMF for Repli to redeem the
preference shares held by AASMF for Shares. Shareholder approval was obtained and following reporting period
end, on 5 July 2019, Repli voluntarily redeemed the preference shares, in consideration for which the Company
issued 77.57M Shares to AASMF (redemption amount payable ZAR25.05M (~$2.5M).
DIRECTORS’ MEETINGS
The number of meetings attended by each Director of the Company during the financial year was:
Board Meetings
Audit Committee Meetings
Held and entitled
to attend
Attended
Held and entitled
to attend
Attended
25
25
25
25
5
5
19
25
25
25
25
5
5
19
2
2
2
---
---
---
---
2
2
2
---
---
---
---
Mr Denis Waddell
Mr Errol Smart
Mr Alexander Haller
Mr Mark Palmer
Mr Thomas Borman
Mr Godfrey Gomwe
Mr Michael Hulmes
DIRECTORS’ INTERESTS
The relevant interest of each director in the ordinary shares, or options over such instruments issued by the Company, as
notified by the directors to the Australian Securities Exchange in accordance with S205G(1) of the Corporations Act 2001,
at the date of this report is as follows:
Ordinary Shares
Unlisted options over ordinary shares
Mr Denis Waddell
Mr Errol Smart
Mr Alexander Haller (i)
Mr Mark Palmer
111,714,746
19,900,666
69,119,937
---
Mr Thomas Borman
3,000,000
Mr Godfrey Gomwe
---
24,000,000
60,000,000
3,000,000
---
3,000,000
3,000,000
(i)
Mr Haller holds relevant interests as follows: Silja Investment Ltd 56,706,578 ordinary shares, Mr Haller
12,412,039 ordinary shares and Pershing Securities 1,320 ordinary shares.
SHARE OPTIONS
Options granted to directors and executives of the Company
During or since the end of the financial year, the Company has granted options for no consideration over unissued ordinary
shares in the Company to key management personnel as part of their remuneration.
68
DIRECTORS’ REPORT continuedFINANCIAL STATEMENTS
Directors’ Report (continued)
Unissued shares under options and performance rights
At the date of this report unissued ordinary shares of the Company under option are:
Expiry Date
Exercise price
Number of ordinary shares
15 August 2019
15 August 2019
31 October 2019
30 November 2019
30 November 2019
30 June 2020
30 June 2020
30 November 2020
30 November 2020
30 November 2020
31 May 2022
31 May 2022
31 May 2022
31 March 2023
31 March 2023
31 March 2023
30 April 2024
30 April 2024
30 April 2024
17 June 2024
Total
$0.037
$0.037
$0.05
$0.045
$0.06
$0.05
$0.035
$0.02
$0.035
$0.05
$0.03
$0.045
$0.06
$0.05
$0.06
$0.07
$0.04
$0.05
$0.06
$0.05
---
1,520,270
1,520,270
58,613,402
250,000
250,000
2,200,000
1,900,000
16,333,333
18,333,333
18,333,334
12,100,000
12,100,000
12,100,000
5,100,000
5,100,000
5,100,000
30,500,000
30,500,000
30,500,000
11,000,000
273,353,942
Shares issued on exercise of options
There were 2M options exercised during the financial year by a former director of the Company. There has been no
options exercised since the end of the financial year.
REMUNERATION REPORT - AUDITED
The Remuneration Report sets out remuneration information for Orion Minerals Ltd for the year ended 30 June 2019. 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.
69
ANNUAL REPORT 2019
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Key Management Personnel
Designation
Position held during the year
Mr Denis Waddell
Mr Errol Smart
Chairman – Non-Executive
Chairman
Director – Executive
Managing Director & Chief Executive Officer
Mr Alexander Haller
Director – Non-Executive
Director
Mr Michael Hulmes
(ceased 15 April 2019)
Mr Mark Palmer
Mr Thomas Borman
(from 16 April 2019)
Mr Godfrey Gomwe
(from 16 April 2019)
Mr Walter Shamu
Mr Martin Bouwmeester
Mr Louw van Schalkwyk
Ms Michelle Jenkins
Director – Non-Executive
Director
Director – Non-Executive
Director
Director – Non-Executive
Director
Director – Non-Executive
Director
---
---
---
---
Chief Operating Officer
Chief Financial Officer & Company Secretary
Executive: Exploration (South Africa)
Executive: Finance & Administration (South Africa)
Remuneration Policy
Key management personnel have authority and responsibility for planning, directing and controlling the activities of the
Group. Key management personnel comprise the directors and executives of the Company and the Group, which
comprise executives that report directly to the Managing Director and CEO of the Company and the Group.
It is the Group’s objective to provide maximum stakeholder benefit from the retention of a high quality Board and
management by remunerating directors and executives fairly and appropriately with reference to relevant employment and
market conditions. To assist in achieving the objective the Board links the nature and amount of executive directors’
remuneration to the Group’s financial and operational performance.
The expected outcome of the Group’s remuneration structure is:
• Retention and motivation of directors and executives;
• Attraction of quality management to the Group; and
• Performance rewards to allow directors and executives to participate in the future success of the Group.
Remuneration may include base salary and fees, short term incentives, superannuation contributions and long term
incentives. Any equity based remuneration for directors will only be made with the prior approval of shareholders at a
general meeting. All base salary and fees, short term incentives, superannuation contributions granted to key
management personnel during the year was fixed under service agreements between the Company and key management
personnel and was not impacted by performance related measures. In relation to the payment of bonuses, options and
other incentive payments, discretion is exercised by the Board, having regard to the overall performance of the Group and
the performance of the individual during the period.
The Board of directors is responsible for determining and reviewing compensation arrangements for the executive and
non-executive directors. The maximum remuneration of non-executive directors is the subject of shareholder resolution in
accordance with the Company’s Constitution, and the Corporations Act 2001 as applicable.
The total level of remuneration for the financial year for all non-executive directors of $235,417 is maintained within the
maximum limit of $350,000 approved by shareholders. When setting fees and other compensation for non-executive
directors, the Board may seek independent advice and apply Australian benchmarks. The Board may recommend
additional remuneration to non-executive directors called upon to perform extra services or make special exertions on
behalf of the Group.
There is no scheme to provide retirement benefits, other than statutory superannuation when applicable, to non-executive
directors.
70
DIRECTORS’ REPORT continuedFINANCIAL STATEMENTS
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
The Chairman will undertake an annual assessment of the performance of the individual directors and meet privately with
each director to discuss this assessment. Basis for evaluation for assessing performance is by reference to Company
charters and current best practice.
Consequences of performance on shareholders wealth
In considering the Group’s performance and benefits for shareholders wealth, the Board of directors has regard to the
following indices in respect of the current financial year and the previous five financial years.
Net loss attributable to equity holders of the
Company
Dividends paid
Actual share price
Directors & KMP remuneration
2019
$’000
2018
$’000
2017
$’000
2016
$’000
2015
$’000
$(10,750)
$(8,833)
$(7,930)
$(2,528)
$(3,363)
---
$0.031
$2,533
---
---
---
---
$0.04
$0.025
$0.016
$0.023
$1,835
$1,151
$822
$603
Long Term Incentive Based Remuneration
The Company has an option and performance rights based remuneration scheme for executives. In accordance with the
provisions of the Orion Minerals Option and Performance Rights Plan, as approved by shareholders at a general meeting,
executives may be granted options or performance rights to purchase ordinary shares. The number and terms of options
or performance rights granted is at the absolute discretion of the Board, provided that the total number of options on issue
under the scheme at the time of the grant does not exceed 5% of the number of ordinary shares on issue.
Unlisted options were granted during the year ended 30 June 2019 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.
Chief Operating Officer
Unlimited in term but capable of termination on 1 month’s notice. The Group retains the right to terminate the contract
immediately, by making a payment of 1 month’s 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: Finance & Administration (South Africa)
Unlimited in term but capable of termination on 1 month’s notice. The Group retains the right to terminate the contract
immediately, by making a payment of 1 month’s 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.
71
ANNUAL REPORT 2019
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Directors
Total compensation for all non-executive directors, last voted upon by shareholders at the 2007 Annual General Meeting,
is not to exceed $350,000 per annum and is set based on advice from external advisors with reference to fees paid to
other directors of comparable companies. From 1 January 2017, the Chairman receives $75,000 per annum. Non-
executive directors do not receive performance related compensation. Directors’ fees cover all main board activities and
membership of one committee. Directors may be paid additional amounts for consulting services provided in addition to
normal director duties. Such additional amounts are paid on commercial terms.
Remuneration report approval at the 2018 Annual General Meeting
The 30 June 2018 Remuneration Report received positive shareholder support at the Company’s Annual General Meeting
with a positive vote of 94% in favour.
Directors and Executive Officers’ Remuneration – 2019
Post-
employment
benefit
Superannuati
on
Long-
term
benefits
Long
service
leave
Share-based
payments (xiii)
Equity
settled
shares
Equity
settled
options
Total
remuneration
% of
remuneration
in options
Short term benefits
Remuneration
Cash
salary and
fees
Cash
bonus
Non-
monet
ary
2019
$
$
$
Directors
Mr E Smart (i)
Mr W Oliver (ii)
300,000
---
Non-executive Directors
Mr D Waddell (iii)
248,191
Mr A Haller (iv)
Mr M Palmer (v)
Mr T Borman (vi)
Mr G Gomwe (vii)
Mr M Hulmes (viii)
50,000
50,000
10,417
10,417
87,248
Other Key Management Personnel
Mr W Shamu (ix)
285,000
Mr M Bouwmeester (x)
240,000
Mr L van Schalkwyk (xi)
270,000
Ms M Jenkins (xii)
Total
270,000
1,821,273
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
3,345
---
---
$
---
---
6,509
---
---
---
---
8,289
---
---
---
---
3,345
14,798
$
---
---
---
---
---
---
---
---
---
---
---
---
---
$
---
---
---
---
---
---
---
---
---
---
---
---
---
$
$
195,118
495,118
---
---
78,043
332,743
19,511
---
19,511
19,511
---
69,511
50,000
29,928
29,928
95,537
137,966
422,966
58,594
301,939
82,768
352,768
82,768
352,768
693,790
2,533,206
%
39
---
23
28
---
65
65
---
33
19
23
23
27
(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 18 April 2018, Mr Oliver resigned from the Board of Directors. Mr Oliver’s remuneration is disclosed
as at resignation date.
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.
(iv) Mr Haller waived his entitlement to receive fees for his position as Non-Executive Director from 1 October 2013.
Fees were reinstated by resolution of the Board from 1 July 2018.
Mr Palmer has held the position of Non-Executive Director from 1 February 2018.
(v)
(vi) Mr Borman has held the position of Non-Executive Director from 16 April 2019.
(vii) Mr Gomwe has held the position of Non-Executive Director from 16 April 2019.
(viii) Effective from 15 April 2019, Mr Hulmes resigned from the Board of Directors. Mr Hulmes’ remuneration is
disclosed up to resignation date.
72
DIRECTORS’ REPORT continuedFINANCIAL STATEMENTS
Directors’ Report (continued)
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
REMUNERATION REPORT - AUDITED (continued)
(ix) Mr Shamu has held the position of Chief Operating Officer from 1 April 2018. Prior to 1 April 2018, Mr Shamu held
the positions of Exploration: Mining & Development (South Africa).
Mr Bouwmeester has held the position of Chief Financial Officer since 9 February 2017 and has held the position
the positions of Exploration: Mining & Development (South Africa).
of Company Secretary since 1 April 2016.
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.
(ix) Mr Shamu has held the position of Chief Operating Officer from 1 April 2018. Prior to 1 April 2018, Mr Shamu held
(x)
(x)
(xi) Mr van Schalkwyk has held the position of Executive: Exploration (South Africa) from 1 June 2017.
(xii) Ms Jenkins has held the position of Executive: Finance & Administration (South Africa) from 1 June 2017.
(xi) Mr van Schalkwyk has held the position of Executive: Exploration (South Africa) from 1 June 2017.
(xii) Ms Jenkins has held the position of Executive: Finance & Administration (South Africa) from 1 June 2017.
(xiii) Share based payments represent the fair values of options estimated at the date of grant using the Black Scholes
(xiii) 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.
option pricing model. These amounts are not paid in cash.
Remuneration
Remuneration
Short Term Benefits
Short term benefits
Cash
Cash
salary and
salary and
fees
fees
Cash
Bonus
Cash
bonus
Non-
monet
ary
Non-
monet
ary
Post-
Post-
employment
employment
benefit
benefit
Superannuati
Superannuati
on
on
Long-
term
benefits
Long
Service
leave
Long-
term
benefits
Long
service
leave
Share-based
payments
Equity
Settled
shares
Equity
settled
shares
Share-based
payments
Equity
settled
options
$
$
Equity
settled
options
Total
remuneration
Total
remuneration
% of
remuneration
in options
% of
remuneration
in Options
$
$
$
2018
2018
$
$
$
$
$
$
$
$
$
$
$
Directors
Directors
Mr E Smart
Mr E Smart
Mr W Oliver
Mr W Oliver
300,000
300,000
---
---
---
---
64,800
64,800
---
---
---
---
---
---
---
---
Non-executive Directors
Non-executive Directors
Mr D Waddell
Mr D Waddell
182,400
182,400
---
---
20,833
9,386
---
9,386
---
20,833
Mr A Haller
Mr A Haller
Mr M Palmer
Mr M Palmer
Mr M Hulmes
Mr M Hulmes
Other Key Management Personnel
Other Key Management Personnel
Mr W Shamu
Mr W Shamu
Mr M Bouwmeester
Mr M Bouwmeester
Mr L van Schalkwyk
Mr L van Schalkwyk
Ms M Jenkins
Ms M Jenkins
Total
Total
1,627,419
270,000
270,000
270,000
240,000
270,000
240,000
270,000
270,000
1,627,419
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
892
892
---
---
---
---
892
---
---
---
---
892
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
19,648
19,648
319,648
319,648
---
3,975
3,975
68,775
68,775
7,875
---
---
---
---
---
---
---
7,875
190,275
190,275
---
---
---
---
---
20,833
10,278
20,833
10,278
---
---
---
56,967
326,967
56,967
326,967
3,878
243,878
3,878
243,878
56,967
326,967
56,967
---
206,277
---
56,967
326,967
326,967
56,967
326,967
1,834,588
206,277
1,834,588
%
6
6
4
---
---
---
17
2
17
17
11
%
6
6
4
---
---
---
17
2
17
17
11
Insurance premiums paid on behalf of directors and officers are not allocated to or included in total remuneration.
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 149,000,000 unissued ordinary shares under option issued to directors and
Options and Rights over equity instruments granted as compensation
executives (2018: 72,000,000 unissued ordinary shares under option).
As at the date of this report, there were 149,000,000 unissued ordinary shares under option issued to directors and
executives (2018: 72,000,000 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:
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:
73
ANNUAL REPORT 2019
Directors’ Report (continued)
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
REMUNERATION REPORT - AUDITED (continued)
Number of options
Number of options
granted during
granted during
FY2019 (i)
FY2019 (i)
Grant Date
Grant date
Fair value
per option
at grant
date
Fair value
per option
at grant
date
Exercise
price per
option
(ii)
Exercise
price per
option
(ii)
Expiry Date
Expiry date
Number of
options
vested during
FY2019
Number of
options
vested during
FY2019
Directors
Directors
Mr D Waddell
Mr D Waddell
12,000,000
12,000,000
14 June 2019
14 June 2019
$0.01
$0.01
Mr E Smart
Mr E Smart
30,000,000
30,000,000
14 June 2019
14 June 2019
$0.01
$0.01
Mr A Haller
Mr A Haller
3,000,000
3,000,000
14 June 2019
14 June 2019
$0.01
$0.01
Mr T Borman
Mr T Borman
Mr G Gomwe
Mr G Gomwe
3,000,000
3,000,000
14 June 2019
14 June 2019
$0.01
$0.01
3,000,000
3,000,000
14 June 2019
14 June 2019
$0.01
$0.01
Other Key Management Personnel
Other Key Management Personnel
Mr W Shamu
Mr W Shamu
Mr M Bouwmeester
Mr M Bouwmeester
Mr L van Schalkwyk
Mr L van Schalkwyk
Ms M Jenkins
Ms M Jenkins
---
---
31 May 2017
31 May 2017
$0.01
$0.01
10,500,000
10,500,000
29 April 2019
29 April 2019
$0.01
$0.01
6,000,000
6,000,000
29 April 2019
$0.01
29 April 2019
$0.01
6,000,000
6,000,000
29 April 2019
$0.01
29 April 2019
$0.01
---
---
31 May 2017
$0.01
31 May 2017
$0.01
6,000,000
29 April 2019
$0.01
6,000,000
29 April 2019
$0.01
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.05
$0.04
$0.05
$0.04
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.05
$0.04
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
$0.05
$0.04
$0.04
$0.05
$0.06
$0.04
$0.05
$0.06
30 April 2024
30 April 2024
4,000,000
4,000,000
30 April 2024
30 April 2024
10,000,000
10,000,000
30 April 2024
30 April 2024
1,000,000
1,000,000
30 April 2024
30 April 2024
1,000,000
1,000,000
30 April 2024
30 April 2024
1,000,000
1,000,000
31 May 2022
31 May 2022
2,000,000
2,000,000
2,000,000
2,000,000
30 April 2024
30 April 2024
2,000,000
2,000,000
30 April 2024
2,000,000
30 April 2024
2,000,000
30 April 2024
30 April 2024
31 May 2022
31 May 2022
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
30 April 2024
2,000,000
30 April 2024
2,000,000
(ii)
(i)
(i)
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
The options were provided at no cost to the recipient. Each option gives the option holder the right to subscribe for
terms and conditions.
one ordinary share in the capital of the Company upon exercise of the option in accordance with the attaching
The options are exercisable between 1 and 5 years from grant date.
terms and conditions.
(ii)
The options are exercisable between 1 and 5 years from grant date.
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
Analysis of Options and Rights over equity instruments granted as compensation
at the end of the reporting period are detailed below.
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.
74
DIRECTORS’ REPORT continuedFINANCIAL STATEMENTS
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Number
Date
% vested
in current
year
% lapsed
in current
year (i)
Date grant vests (ii)
Directors
Mr D Waddell
Mr E Smart
Mr A Haller
Mr T Borman
Mr G Gomwe
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
Other Key Management Personnel
Mr W Shamu
Mr M
Bouwmeester
Mr L van
Schalkwyk
Ms M Jenkins
2,000,000
2,000,000
2,000,000
1,000,000
1,000,000
1,000,000
2,500,000
2,500,000
2,500,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
26 November 2015
26 November 2015
26 November 2015
14 June 2019
14 June 2019
14 June 2019
26 November 2015
26 November 2015
26 November 2015
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
14 June 2019
31 May 2017
31 May 2017
31 May 2017
21 Sept 2018
21 Sept 2018
21 Sept 2018
29 April 2019
29 April 2019
29 April 2019
26 November 2015
26 November 2015
26 November 2015
29 April 2019
29 April 2019
29 April 2019
31 May 2017
31 May 2017
31 May 2017
29 April 2019
29 April 2019
29 April 2019
31 May 2017
31 May 2017
31 May 2017
29 April 2019
29 April 2019
29 April 2019
---%
---%
---%
100%
---%
---%
---%
---%
---%
100%
---%
---%
100%
---%
---%
100%
---%
---%
100%
---%
---%
---%
100%
---%
100%
---%
---%
100%
---%
---%
---%
---%
---%
100%
---%
---%
---%
100%
---%
100%
---%
---%
---%
100%
---%
100%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
---%
30 November 2015
30 November 2016
30 November 2017
14 June 2019
30 April 2020
30 April 2021
30 November 2015
30 November 2016
30 November 2017
14 June 2019
30 April 2020
30 April 2021
14 June 2019
30 April 2020
30 April 2021
14 June 2019
30 April 2020
30 April 2021
14 June 2019
30 April 2020
30 April 2021
31 May 2018
31 May 2019
31 May 2020
31 May 2018
31 May 2019
31 May 2020
30 April 2019
30 April 2020
30 April 2021
30 November 2015
30 November 2016
30 November 2017
30 April 2019
30 April 2020
30 April 2021
31 May 2018
31 May 2019
31 May 2020
30 April 2019
30 April 2020
30 April 2021
31 May 2018
31 May 2019
31 May 2020
30 April 2019
30 April 2020
30 April 2021
75
ANNUAL REPORT 2019
D IREC T OR S ’ REPORT continued
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Directors’ Report (continued)
(i)
REMUNERATION REPORT - AUDITED (continued)
(ii)
(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
The % lapsed in the year represents the reduction from the maximum number of options available to be exercised.
attached to the grant.
The vesting conditions attached to each option granted require the key management personnel to remain in
employment with the Company until the vesting date, unless the Board of directors elects to waive the expiry terms
attached to the grant.
The Company issued certain options with immediate vesting conditions to Directors and KMPs during the reporting period
as deemed appropriate by the Board to retain professionals with relevant expertise and provide incentives to members
during our period of growth.
The Company issued certain options with immediate vesting conditions to Directors and KMPs during the reporting period
as deemed appropriate by the Board to retain professionals with relevant expertise and provide incentives to members
Analysis of movements in options
during our period of growth.
Changes during the reporting period, by value, of options over ordinary shares in the Company held by each current key
Analysis of movements in options
management person, and each of the named current Company executives is detailed below.
Changes during the reporting period, by value, of options over ordinary shares in the Company held by each current key
management person, and each of the named current Company executives is detailed below.
Value of options
Granted in year
$
Granted in year
78,043
$’000
Exercised in year
$’000
---
$
$
Lapsed in year
$’000
Exercised in year
Lapsed in year
Mr D Waddell
Mr E Smart
Mr D Waddell
Mr E Smart
Mr A Haller
Mr A Haller
Mr M Palmer
Mr M Palmer
Mr T Borman
Mr T Borman
Mr G Gomwe
Mr G Gomwe
Mr W Shamu
Mr W Shamu
Mr M Bouwmeester
Mr M Bouwmeester
78,043
195,118
195,118
19,511
19,511
---
---
19,511
19,511
19,511
19,511
137,966
137,966
58,594
58,594
Mr L van Schalkwyk
Mr L van Schalkwyk
Ms M Jenkins
Ms M Jenkins
82,768
82,768
82,768
82,768
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
Options and rights over equity instruments
Options and rights over equity instruments
The movement during the reporting period, by number of options over ordinary shares in the Company held, directly,
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:
indirectly or beneficially, by each key management person, including their related parties, is as follows:
Balance at
Balance at
beginning of
beginning of
period
period
1-Jul-18
1-Jul-18
Granted as
remuneration
Granted as
remuneration
Purchased
or acquired
Purchased
or acquired
Expired
Expired
Balance at
end of period
30-June-19
Balance at
end of period
30-June-19
Not vested
and not
exercisable
Not vested
Vested and
and not
exercisable
exercisable
Vested and
exercisable
Directors
Directors
Mr D Waddell
Mr D Waddell
Mr E Smart
Mr E Smart
Mr A Haller
Mr A Haller
Mr M Palmer
Mr M Palmer
Mr T Borman
Mr T Borman
Mr G Gomwe
Mr G Gomwe
Mr M Hulmes
12,000,000
12,000,000
30,000,000
30,000,000
---
12,000,000
12,000,000
30,000,000
30,000,000
3,000,000
---
---
---
---
---
---
---
---
3,000,000
---
3,000,000
---
3,000,000
3,000,000
3,000,000
---
Mr M Hulmes
Other Key Management Personnel
---
---
Mr W Shamu
Other Key Management Personnel
6,000,000
10,500,000
Mr M Bouwmeester
Mr W Shamu
Mr L van Schalkwyk
Mr M Bouwmeester
Ms M Jenkins
Mr L van Schalkwyk
Total
Ms M Jenkins
6,000,000
6,000,000
6,000,000
10,500,000
6,000,000
6,000,000
6,000,000
6,000,000
66,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
79,500,000
6,000,000
Total
66,000,000
79,500,000
76
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
24,000,000
8,000,000
24,000,000
60,000,000
20,000,000
16,000,000
8,000,000
40,000,000
60,000,000
20,000,000
3,000,000
2,000,000
1,000,000
3,000,000
---
---
2,000,000
---
16,000,000
40,000,000
1,000,000
3,000,000
---
2,000,000
---
1,000,000
---
3,000,000
3,000,000
2,000,000
2,000,000
1,000,000
1,000,000
---
3,000,000
---
2,000,000
---
1,000,000
---
---
---
16,500,000
9,000,000
7,500,000
12,000,000
16,500,000
4,000,000
9,000,000
8,000,000
12,000,000
12,000,000
6,000,000
4,000,000
6,000,000
12,000,000
6,000,000
12,000,000
6,000,000
6,000,000
149,000,000
59,000,000
12,000,000
---
149,000,000
86,500,000
6,000,000
59,000,000
7,500,000
8,000,000
6,000,000
6,000,000
86,500,000
FINANCIAL STATEMENTS
Directors’ Report (continued)
Directors’ Report (continued)
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
REMUNERATION REPORT - AUDITED (continued)
REMUNERATION REPORT - AUDITED (continued)
Balance at
beginning of
Balance at
Balance at
beginning of
period
beginning of
period
1-Jul-17
period
1-Jul-17
1-Jul-17
Granted as
remuneration
Granted as
remuneration
Granted as
remuneration
Purchased
or acquired
Purchased
or acquired
Purchased
or acquired
Expired
Expired
Expired
Balance at
end of
period
30-June-18
Balance at
end of
Balance at
period
end of
30-June-18
period
30-June-18
Not vested
and not
exercisable
Not vested
and not
Not vested
exercisable
and not
exercisable
Vested and
exercisable
Vested and
exercisable
Vested and
exercisable
---
---
45,000,000
18,000,000
18,000,000
18,000,000
45,000,000
45,000,000
---
---
---
---
---
---
9,000,000
9,000,000
9,000,000
Directors
Directors
Directors
Mr D Waddell
Mr D Waddell
Mr D Waddell
Mr E Smart
Mr E Smart
Mr E Smart
Mr A Haller
Mr A Haller
Mr A Haller
Mr M Palmer
Mr M Palmer
Mr M Palmer
Mr M Hulmes
Mr M Hulmes
Mr M Hulmes
Mr B Oliver
Mr B Oliver
Mr B Oliver
Other Key Management Personnel
Other Key Management Personnel
Other Key Management Personnel
6,000,000
Mr W Shamu
Mr W Shamu
Mr W Shamu
Mr M Bouwmeester
Mr M Bouwmeester
Mr M Bouwmeester
Mr L van Schalkwyk
Mr L van Schalkwyk
Ms M Jenkins
Mr L van Schalkwyk
Ms M Jenkins
Total
Ms M Jenkins
Total
Total
6,000,000
6,000,000
9,000,000
9,000,000
6,000,000
6,000,000
6,000,000
6,000,000
99,000,000
99,000,000
99,000,000
6,000,000
9,000,000
6,000,000
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
(3,000,000)
6,000,000
6,000,000
(6,000,000)
12,000,000
(15,000,000)
30,000,000
(6,000,000)
(6,000,000)
(15,000,000)
(15,000,000)
---
---
---
---
---
---
(3,000,000)
(3,000,000)
---
---
---
---
---
---
---
---
(3,000,000)
(3,000,000)
---
---
---
---
(27,000,000)
(27,000,000)
12,000,000
12,000,000
30,000,000
30,000,000
---
---
---
---
---
---
6,000,000
6,000,000
---
---
---
---
---
---
---
---
---
12,000,000
30,000,000
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
6,000,000
4,000,000
2,000,000
6,000,000
4,000,000
2,000,000
6,000,000
4,000,000
2,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
72,000,000
72,000,000
4,000,000
4,000,000
---
---
4,000,000
4,000,000
4,000,000
4,000,000
12,000,000
12,000,000
12,000,000
12,000,000
30,000,000
30,000,000
---
---
---
---
---
---
6,000,000
6,000,000
2,000,000
2,000,000
6,000,000
6,000,000
2,000,000
2,000,000
2,000,000
2,000,000
60,000,000
60,000,000
(27,000,000)
72,000,000
12,000,000
60,000,000
(3,000,000)
6,000,000
---
6,000,000
Directors
management
Other transactions with key management personnel
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
key management personnel, or their related parties, hold positions in other entities that result in them having
A number of
Other transactions with key management personnel
control, joint control or a relevant interest over the financial or operating policies of those entities.
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.
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
A number of these entities transacted with the Group during the year. The terms and conditions of the transactions with
reasonably be expected to be available, on similar transactions to non-key management personnel related entities on an
A number of these entities transacted with the Group during the year. The terms and conditions of the transactions with
might
key
arm’s length basis (refer note 24).
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
reasonably be expected to be available, on similar transactions to non-key management personnel related entities on an
(refer Note 24).
arm’s length basis
Movement in shares
arm’s length basis (refer note 24).
The movement during the reporting period in the number of ordinary shares in the Company held, directly, indirectly or
Movement in shares
beneficially, by each key management person, including their related parties, is as follows:
The movement during the reporting period in the number of ordinary shares in the Company held, directly, indirectly or
Movement in shares
The movement during the reporting period in the number of ordinary shares in the Company held, directly, indirectly or
key management person, including their related parties, is as follows:
beneficially, by each
beneficially, by each key management person, including their related parties, is as follows:
personnel
available,
favorable
related
parties
which
those
more
were
their
than
and
no
or
Disposals
of shares
Balance at
beginning of period
1-Jul-18
Balance at
beginning of period
Balance at
1-Jul-18
beginning of period
1-Jul-18
Purchased or
acquired
Purchased or
during the
year
acquired
Purchased or
during the
acquired
year
during the
year
On options
exercised
On options
exercised
On options
exercised
Disposals
of shares
Disposals
of shares
Other
transfers of
shares
Balance at
end of period
30-Jun-19
Other
transfers of
Other
shares
transfers of
shares
Balance at
end of period
Balance at
30-Jun-19
end of period
30-Jun-19
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
200,000
358,000
8,756,756
3,000,000
69,119,937
19,542,666
69,119,937
19,900,666
102,957,990
111,714,746
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
8,756,756
---
8,756,756
358,000
---
358,000
---
---
---
---
---
---
---
---
200,000
200,000
102,957,990
102,957,990
19,542,666
19,542,666
69,119,937
3,000,000
69,119,937
---
---
---
3,000,000
200,000
3,000,000
---
---
200,000
2,083,333
200,000
Mr D Waddell
Directors
Mr E Smart
Directors
Mr D Waddell
Mr A Haller (i)
Mr D Waddell
Mr E Smart
Mr M Palmer
Mr E Smart
Mr A Haller (i)
Mr T Borman
Mr A Haller (i)
Mr M Palmer
Mr G Gomwe
Mr M Palmer
Mr T Borman
Mr M Hulmes
Mr T Borman
Mr G Gomwe
Other Key Management Personnel
Mr G Gomwe
Mr M Hulmes
Mr W Shamu (ii)
Mr M Hulmes
Mr M Bouwmeester
Other Key Management Personnel
Other Key Management Personnel
---
Mr L van Schalkwyk
2,083,333
2,083,333
Mr W Shamu (ii)
2,083,333
2,083,333
Mr W Shamu (ii)
Ms M Jenkins (ii)
4,867,360
4,867,360
Mr M Bouwmeester
Mr M Bouwmeester
4,867,360
4,867,360
Total
---
---
Mr L van Schalkwyk
---
---
Mr L van Schalkwyk
(i) Mr Haller holds relevant interests as follows: Silja Investment Ltd 56,706,578 shares and Pershing Securities 1,320
2,916,287
2,916,666
Ms M Jenkins (ii)
shares. Mr Haller personally holds interests of 12,412,039 shares.
2,916,287
2,916,666
Ms M Jenkins (ii)
214,002,329
204,687,952
Total
(ii) Mr Shamu and Ms Jenkins hold relevant interests as follows: WMP Mining Services Inc 2,083,333 shares (held
214,002,329
Total
204,687,952
(i) Mr Haller holds relevant interests as follows: Silja Investment Ltd 56,706,578 shares and Pershing Securities 1,320
(i) Mr Haller holds relevant interests as follows: Silja Investment Ltd 56,706,578 shares and Pershing Securities 1,320
(ii) Mr Shamu and Ms Jenkins hold relevant interests as follows: WMP Mining Services Inc 2,083,333 shares (held
(ii) Mr Shamu and Ms Jenkins hold relevant interests as follows: WMP Mining Services Inc 2,083,333 shares (held
---
---
---
---
---
---
---
---
---
---
equally) and Ms Jenkins holds additional interests of 832,954 shares.
shares. Mr Haller personally holds interests of 12,412,039 shares.
shares. Mr Haller personally holds interests of 12,412,039 shares.
equally) and Ms Jenkins holds additional interests of 832,954 shares.
equally) and Ms Jenkins holds additional interests of 832,954 shares.
111,714,746
111,714,746
19,900,666
19,900,666
69,119,937
69,119,937
---
---
3,000,000
3,000,000
---
---
400,000
400,000
---
---
---
---
9,319,377
---
---
---
(379)
9,314,756
9,319,377
---
---
---
---
---
---
(379)
---
(379)
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
214,002,329
204,687,952
2,083,333
4,867,360
2,916,287
4,867,360
2,916,666
400,000
(379)
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
77
ANNUAL REPORT 2019
D IREC T OR S ’ REPORT continued
Directors’ Report (continued)
REMUNERATION REPORT - AUDITED (continued)
Balance at
beginning of period
1-Jul-17
Purchased or
acquired
during the
year
On options
exercised
Disposals of
shares
Other
transfers of
shares
Balance at
end of period
30-Jun-18
Directors
Mr D Waddell
Mr E Smart
Mr A Haller (i)
Mr M Palmer
Mr M Hulmes
Mr W Oliver
92,541,324
10,416,666
19,542,666
69,119,937
---
---
6,582,199
---
---
---
---
---
2,083,333
2,083,333
---
2,916,666
Other Key Management Personnel
Mr W Shamu (ii)
---
Mr M Bouwmeester
2,784,027
Mr L van Schalkwyk
Ms M Jenkins (ii)
---
---
Total
190,570,153
17,499,998
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
(6,582,199)
---
---
---
---
(6,582,199)
---
---
---
---
---
---
---
---
---
---
---
102,957,990
19,542,666
69,119,937
---
---
---
2,083,333
4,867,360
---
2,916,666
201,487,952
(i) Mr Haller holds relevant interests as follows: Silja Investment Ltd 56,706,578 shares and Pershing Securities
1,320 shares. Mr Haller personally holds interests of 12,412,039 shares.
(ii) Mr Shamu and Ms Jenkins hold relevant interests as follows: WMP Mining Services Inc 2,083,333 shares (held
equally) and Ms Jenkins holds additional interests of 833,333 shares.
Engagement of remuneration consultants
The Board of Directors from time to time, seek and consider advice from independent remuneration consultants to ensure
that the Company has at its disposal information relevant to the determination of all aspect of remuneration relating to key
management personnel.
The Board follows a set of protocols when engaging remuneration consultants to satisfy themselves, that the remuneration
consultants engaged are free from any undue influence by the members of the key management personnel to whom
advice and recommendations relate and that the requirements of the Corporations Act 2001 are complied with. The set
of protocols followed by the Board include:
• Remuneration consultants are engaged by and report directly to the Board; and
• Communication between remuneration consultants and the Company is limited to those KMPs whose remuneration
is not under consideration.
No remuneration consultants were engaged during the year.
This is the end of the remuneration report which has been audited.
ENVIRONMENTAL 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 (2018: $nil).
78
FINANCIAL STATEMENTS
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
body corporate against any liability incurred whilst acting in the capacity of
all office bearers of the Company and of any
director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance
Ltd, to the extent permitted
prohibits disclosure of the nature of the liability
the Group provided such liability
by law, indemnifies each
which
defending
involving a
arise
does not
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.
secretary against any liability
the service of
in
the amount of the premium.
for costs incurred
proceedings in
Orion Minerals
director or
conduct
incurred
lack of
out of
good
faith
and
and
in
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
of
those proceedings.
for the purpose of taking responsibility on behalf of the Company for all or any part
NON-AUDIT SERVICES
BDO
East
statutory duties
Coast
during the year ended 30 June 2019.
Partnership,
the
Company’s
auditor,
has
not
performed
other
non-audit
services
in
addition
to
their
has performed professional services for the board of directors of Bartotrax (Pty) Ltd,
BDO Corporate Finance (Pty) Ltd
Repli Trading No 27 (Pty) Ltd, Rich Rewards Trading 437 (Pty) Ltd and Vardocube (Pty) Ltd, regarding a repurchase of
the issued ordinary share capital in these entities.
The
directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in Note
the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
to the financial statements do not compromise
25
•
•
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for
the company, acting as advocate for the company or jointly sharing economic risks and rewards
ROUNDING OF AMOUNTS
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration is set out on page 81 and forms part of the Directors’ Report for the financial
year ended 30 June 2019.
79
ANNUAL REPORT 2019
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 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
Perth, Western Australia
Date:
24
September
2019
80
DIRECTORS’ REPORT continuedFINANCIAL STATEMENTS
Tel: +61 3 9603 1700
Fax: +61 3 9602 3870
www.bdo.com.au
Collins Square, Tower Four
Level 18, 727 Collins Street
Melbourne VIC 3008
GPO Box 5099 Melbourne VIC 3001
Australia
DECLARATION OF INDEPENDENCE BY JAMES MOONEY TO THE DIRECTORS OF ORION MINERALS
LIMITED
As lead auditor of Orion Minerals Limited for the year ended 30 June 2019, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Orion Minerals Limited and the entities it controlled during the period.
James Mooney
Partner
BDO East Coast Partnership
Melbourne, 24 September 2019
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO Australia Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO Australia Ltd are members of BDO International Ltd,
a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved
under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
FINANCIAL STATEMENTS
Consolidated Statement of Profit or Loss and Other Comprehensive
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
Income
COMPREHENSIVE INCOME
AS AT 30 JUNE 2019
AS AT 30 JUNE 2019
CONTINUING OPERATIONS
Other income
Exploration and evaluation costs expensed
Employee expenses
Provision for doubtful debt expense
Other operational expenses
(Loss) fair value of securities in other entities
Results from operating activities
Non-operating expenses
Finance income
Finance expense
Net finance expenses
Loss before income tax
Income tax (expense)/benefit
Loss from continuing operations attributable to equity holders of the Group
Other comprehensive income
Foreign currency reserve
Other comprehensive income for the year
Total comprehensive income for the year
Loss for the year is attributed to:
Non-controlling interest
Owners of Orion Minerals Ltd
Total comprehensive loss for the year is attributable to:
Non-controlling interest
Owners of Orion Minerals Ltd
LOSS PER SHARE (CENTS PER SHARE)
Basic loss per share
Diluted loss per share
Headline loss per share
Diluted headline loss per share
Notes
3
9
3
7
3
17
23
23
18
18
18
18
2019
$’000
62
(3,053)
(1,329)
---
(4,425)
(15)
(8,760)
(457)
227
(1,760)
(1,532)
(10,750)
---
(10,750)
437
---
(10,313)
(989)
(9,761)
(10,750)
(989)
(9,324)
(10,313)
(0.53)
(0.53)
(0.53)
(0.53)
2018
$’000
1,293
(2,371)
(1,366)
(500)
(2,955)
(378)
(6,246)
(709)
214
(2,005)
(1,791)
(8,746)
---
(8,746)
228
---
(8,578)
(437)
(8,309)
(8,746)
(437)
(8,081)
(8,518)
(0.76)
(0.76)
(0.76)
(0.76)
The notes on pages 86 to 123 are an integral part of these consolidated financial statements.
82
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
Consolidated Statement of Financial Position
AS AT 30 JUNE 2019
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Rehabilitation bonds
Prepayments
Securities held in other entities
Total current assets
Non-current assets
Other receivables
Rehabilitation bonds
Loan to joint venture partners
Plant and equipment
Deferred exploration, evaluation and development
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Loans
Convertible notes
Provisions
Total current liabilities
Non-current liabilities
Provisions
Preference shares
Loans
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Equity attributable to equity holders of the Company
Issued capital
Accumulated losses
Non-controlling interest - subsidiaries
Foreign currency translation reserve
Convertible note reserve
Share based payments reserve
Total equity
Notes
4
5
6
7
5
6
10
8
9
Notes
11
13
15
12
12
14
13
Notes
16
23
16
The notes on pages 86 to 123 are an integral part of these consolidated financial statements.
2019
$’000
1,395
407
276
68
---
2,146
152
2,372
2,042
95
40,991
45,652
47,798
2019
$’000
1,999
3,947
5,724
170
2018
$’000
4,811
3,133
215
65
15
8,239
166
2,139
1,026
147
29,119
32,597
40,836
2018
$’000
2,363
6,875
6,001
138
11,840
15,377
2,363
2,529
1,748
6,640
18,480
29,318
2019
$’000
121,530
(96,063)
1,244
(310)
230
2,687
29,318
1,965
2,169
1,539
5,673
21,050
19,786
2018
$’000
102,460
(87,367)
2,233
127
230
2,103
19,786
83
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
AS AT 30 JUNE 2019
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities
Payment for exploration and evaluation
Payments to suppliers and employees
Interest received
Interest expense
Covetable note – interest expense
Other receipts
Net cash used in operating activities
Cash flows from investing activities
Purchase of plant and equipment
Payments for exploration and evaluation
Guarantees on deposit
Proceeds from sale of tenements
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue expenses
Borrowings provided to joint venture operations
Proceeds from borrowings
Repayment of borrowings
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate on cash at end of financial year
Notes
2019
$’000
(4,556)
(4,721)
93
(1,757)
---
236
2018
$’000
(2,372)
(3,051)
212
(627)
(732)
3
4
(10,705)
(6,567)
(4)
(10,501)
(72)
2,500
(8,077)
19,234
(425)
(858)
3,000
(5,498)
15,453
(3,329)
4,811
(87)
(101)
(15,275)
(134)
---
(15,510)
17,331
(371)
(1,030)
9,001
(1,440)
23,491
1,414
3,412
(15)
CASH ON HAND AND AT BANK AT END OF YEAR
4
1,395
4,811
The notes on pages 86 to 123 are an integral part of these consolidated financial statements.
84
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 30 JUNE 2019
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
30 June 2019
30 June 2019
Issued
capital
Accumula
ted
losses
Non-
controllin
g interest
Foreign
currency
translation
reserve
Convertible
note
reserve
Share
based
payments
reserve
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
Balance at 1 July 2018
Balance at 1 July 2018
Loss for the year
Loss for the year
Other comprehensive loss
Other comprehensive loss
Total comprehensive loss for the year
Total comprehensive loss for the year
102,460
102,460
(87,367)
(87,367)
---
---
---
---
---
---
(9,761)
(9,761)
---
---
(9,761)
(9,761)
Transactions with owners in their capacity as owners:
Transactions with owners in their capacity as owners:
Contributions of equity, net costs
Contributions of equity, net costs
19,070
19,070
Foreign translation reserve
Foreign translation reserve
Transfer of share options expired
Transfer of share options expired
Share-based payments expense
Share-based payments expense
---
---
---
---
---
---
---
---
---
---
1,065
1,065
---
---
Total transactions with owners
Total transactions with owners
19,070
19,070
1,065
2,054
2,233
2,233
(989)
(989)
---
---
(989)
(989)
---
---
---
---
---
---
---
---
---
Balance at 30 June 2019
Balance at 30 June 2019
121,530
121,530
(96,063)
(96,063)
1,244
1,244
127
127
---
---
---
---
---
---
---
---
(437)
(437)
---
---
---
---
(437)
(437)
(310)
(310)
30 June 2018
30 June 2018
Total
equity
($’000)
($’000)
19,786
19,786
(10,750)
(10,750)
---
---
(10,750)
(10,750)
19,070
19,070
(437)
(437)
---
---
230
230
2,103
2,103
---
---
---
---
---
---
---
---
---
---
(1,065)
(1,065)
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
1,649
1,649
1,649
1,649
584
584
20,282
20,283
(989)
230
230
2,687
2,687
29,318
29,318
Issued
Issued
Capital
capital
Accumula
Accumula
ted
ted
losses
losses
Non-
Non-
controllin
controllin
g interest
g interest
Foreign
Foreign
currency
currency
translation
translation
reserve
reserve
Convertible
Convertible
note
note
reserve
reserve
Share
Share
based
based
payments
payments
reserve
reserve
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
Balance at 1 July 2017
Balance at 1 July 2017
85,499
85,499
(79,883)
(79,883)
Loss for the year
Loss for the year
Other comprehensive loss
Other comprehensive loss
Total comprehensive loss for the year
Total comprehensive loss for the year
---
---
---
---
---
---
Transactions with owners in their capacity as owners:
Transactions with owners in their capacity as owners:
Contributions of equity, net costs
Contributions of equity, net costs
16,961
16,961
Convertible notes
Convertible notes
Foreign translation reserve
Foreign translation reserve
Transfer of share options expired
Transfer of share options expired
Share-based payments expense
Share-based payments expense
---
---
---
---
---
---
---
---
Total transactions with owners
Total transactions with owners
16,961
16,961
(8,309)
(8,309)
---
---
2,670
2,670
(437)
(437)
---
---
(8,309)
(8,309)
(437)
(437)
---
---
---
---
---
---
825
825
---
---
825
825
---
---
---
---
---
---
---
---
---
---
---
---
99
99
---
---
---
---
---
---
---
---
---
---
28
28
---
---
---
---
28
28
407
407
2,502
2,502
---
---
---
---
---
---
---
---
(177)
(177)
---
---
---
---
---
---
(177)
(177)
230
230
---
---
---
---
---
---
---
---
---
---
---
---
(825)
(825)
426
426
(399)
(399)
2,103
2,103
Balance at 30 June 2018
Balance at 30 June 2018
102,460
102,460
(87,367)
(87,367)
2,233
2,233
127
127
The notes on pages 86 to 123 are an integral part of these consolidated financial statements.
The notes on pages 86 to 123 are an integral part of these consolidated financial statements.
Total
Total
equity
Equity
($’000)
($’000)
11,294
11,294
(8,746)
(8,746)
---
---
(8,746)
(8,746)
16,961
16,961
(177)
(177)
28
28
---
---
426
426
17,238
17,237
19,786
19,786
85
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
1 CORPORATE INFORMATION
Orion Minerals Limited (Company) is a company domiciled in Australia. The address of the Company’s registered
office is Suite 617, 530 Little Collins Street, Melbourne, Victoria, 3000. The consolidated financial statements as at
and for the year ended 2019 comprised the Company and its subsidiaries, (together referred to as the Group). The
Group is a for-profit group and is primarily involved in copper, zinc, nickel, gold and platinum group elements (PGE)
exploration, evaluation and development.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
financial
Statement of compliance
consolidated
(i)
The
accordance with Australian Accounting Standards (AASBs)
(AASB) and the Corporations Act 2001. The consolidated financial
Reporting Standards (IFRSs) adopted by the International Accounting Standards
financial statements were
authorised for issue
by the Board of
directors on
statements
statements
purpose
financial
general
are
24
statements
have
been
which
prepared
in
Board
comply with International Financial
consolidated
The
Board
September
(IASB).
2019.
adopted by the Australian Accounting Standards
Basis of measurement
consolidated
financial
(ii)
The
stated.
statements
have
been
prepared
on
the
historical
cost
basis
except
where
otherwise
The accounting policies set out below have been applied consistently to all periods presented in these consolidated
financial statements and have been applied consistently
except as required by the new accounting
standards and interpretations adopted as disclosed in Note 2(b).
by the Group
Certain comparative amounts have been reclassified to conform with the current year’s presentation.
Going
concern
(iii)
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and discharge of liabilities in the normal course of business.
disclosed in the financial statements, the Group recorded a net loss of $10.75M for the year ended 30 June 2019
As
and the Group’s position as at 30 June 2019 was as follows:
•
•
•
The Group had cash reserves of $1.4M and had negative operating cash flows of $10.7M
30 June 2019;
for the year ended
The Group had negative working capital at 30 June 2019 of $9.7M; and
The Group’s main activity is exploration, evaluation and development of base metal, gold and platinum-group
element projects in South Africa (Areachap Belt, Northern Cape) and as such it does not have a source of
income, rather it is reliant on debt and / or equity raisings to fund its activities.
These factors indicate a material uncertainty that may cast significant doubt as to whether the Group will continue as
a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of
business and at the amounts stated in the financial report.
Current forecasts indicate that cash on hand as at 30 June 2019 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.
86
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The Directors believe that there are reasonable
concern, after consideration of the following factors:
grounds to believe that the Group will be able to continue as a going
•
•
•
•
and
operational
They are confident that the Group will raise sufficient cash to ensure that the Group can meet its minimum
exploration
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 $19.50M
(before costs) during the year ended 30 June 2019 and following year end, a further $3.34M to support the
Company’s exploration and plans.
commitments
and maintain
expenditure
months
twelve
for at
least
next
the
on
the
notes
2017,
mature
issued
232.7M
Company
30
In
March
convertible
notices from all noteholders requesting
issue
price of
maturity date.
were converted into shares April 2019)
and its subsidiaries will be released
cents.
The
conversion
into Shares in the Company at an
2.6 cents per
the
the noteholders
issue
Upon issue of the Shares, the Group’s current liabilities will reduce by $5.78M (as 10.3M notes
and the security held by noteholders over certain assets of the Company
the convertible notes
to
release
24
September
2019) (refer Note
15).
convertible
The
of
2019.
conversion
the
value
of
convertible
notes,
Company
with
received
each
has
September
2.6
note
(refer ASX
Company
Shares
before
Share
face
and
will
on
or
a
In January 2019, the Company announced that Tembo Capital has continued its strong support of the Company
through providing a new unsecured $3.6M
Loan Facility (refer Note
Convertible
13).
Based on results to date from exploration programs, the high-margin bankable feasibility study released June
2019, with an initial 10 year Foundation Phase (refer ASX release 26 June 2019), the updated Prieska Project
Mineral
Reserve and the Company’s ability to successfully raise capital in the past, the Directors are confident
of obtaining the continued support of the Company’s shareholders and a number of brokers that have supported
the Company’s previous capital raisings.
The amount and timing of any funding for operational and exploration plans, is the subject of ongoing review.
in
the
Accordingly, the financial statements for the year ended 30 June 2019 have been prepared on a going concern basis
as,
and
in
exploration expenditure commitments and pay its debts as and when they fall due for at least twelve months from
the date of this report.
Directors,
operating
continue
position
opinion
Group
costs
meet
the
will
be
the
its
to
of
to
a
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
Further details on these funding
report. No allowance for such circumstances has been made in
arrangements
related
entities
with
and
Note
parties).
the financial report.
Note
(Convertible
(Borrowings
Notes)
given
other
and
are
13
15
in
(b)
New accounting
interpretations
New accounting standards and
(i)
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.
standards
87
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 2019.
AASB 9 Financial Instruments
The consolidated entity has adopted AASB 9 from 1 July 2018. The standard introduced 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 that are solely principal and interest. A debt investment shall be measured at fair value through other
comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect
contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset
on the basis of its fair value. All other financial assets are 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 or contingent consideration recognised in a business combination) in other
comprehensive income ('OCI'). Despite these requirements, a financial asset may be irrevocably designated as
measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial
liabilities designated at fair value through profit or loss, 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 use an 'expected credit loss' ('ECL') model to
recognise an allowance. Impairment is measured using 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
Group adopted this standard from 1 July 2018, there has been no impact on the opening balances of the accounts
and the comparative period has not been restated.
AASB 15 Revenue from Contracts with Customers
The consolidated entity has adopted AASB 15 from 1 July 2018. It has elected to adopt AASB 15 using the cumulative
effect method, with any adjustment required when transitioning to the new standard being recognised on 1 July 2018
(date of initial application) in retained earnings. Comparative figures have not been restated. There are no material
changes in the Group’s revenue recognition method, no adjustments to the opening retained earnings balance have
been made.
• 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.
88
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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
Limited (Parent Company) from time to time during the year and at 30 June 2018 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 (ZAR).
Transactions in foreign currencies are translated to the respective functional currency of the Group at exchange rates
at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the
exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign
currency are translated to the functional currency at the exchange rate when the fair value was determined. Foreign
currency differences are generally recognised in profit or loss. Non-monetary items that are measured based on
historical cost in a foreign currency are not translated.
(e) Investment and Other Financial Assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of
the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is determined based
on both the business model within which such assets are held and the contractual cash flow characteristics of the
financial asset unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and
the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no
reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off.
89
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i) Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified
as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading,
where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative;
or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or
loss
(ii) Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the consolidated
entity intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial
recognition.
(iii) Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset
not at fair value through 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.
(iv) Impairment
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the loss
allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the
financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses
that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become
credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on
the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis
of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at
the original effective interest rate
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised
within other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
(f)
Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint control.
Investments in associates are accounted for using the equity method. Under the equity method, the share of the
profits or losses of the associate is recognised in profit or loss and the share of the movements in equity is
recognised in other comprehensive income. Investments in associates are carried in the statement of financial
position at cost plus post-acquisition changes in the consolidated entity’s share of the net assets of the associate.
the
consolidated
When
associate,
including any unsecured long-term receivables, the consolidated entity does not recognise further losses, unless it
has incurred obligations or made payments on behalf of the associate.
associate
exceeds
interest
losses
share
equals
the
an
its
or
of
in
in
entity’s
and
Plant and equipment
cost
at
is
Plant
Depreciation
reducing
estimated useful lives for the current and comparative period are as follows:
accumulated
basis
depreciation
estimated
less
balance
stated
a
on
equipment
calculated
using
is
accumulated
and
remaining
useful
life
impairment
the
of
asset.
losses.
The
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.
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.
( g)
90
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(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.
(i)
Trade and other receivables
Trade
effective interest method, less any
settlement within 30
receivables
60 days.
initially
are
-
recognised
at
fair
allowance for expected
value
and
the
at
subsequently
credit losses. Trade receivables are generally due for
measured
amortised
using
cost
The
lifetime
based
longer
entity
loss
approach
consolidated
expected
expected
on
is
debts
days
probable. Bad debts are written off when identified.
simplified
the
doubtful
the
measure
for
applied
To
estimate
overdue. An
allowance.
has
to
credit
measuring
losses,
credit
expected
trade
collection
receivables
full
the
of
losses,
have
amount
which
been
is
uses
a
grouped
no
made
when
(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.
91
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
FOR THE YEAR ENDED 30 JUNE 2019
2
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
(l)
and finance costs
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.
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred.
(m) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and
a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate,
the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
(n)
Employee benefits
(i) Share based payments
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 28.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully
entitled to the award (Vesting Date).
The cumulative expense recognised for equity-settled transactions at each reporting date until Vesting Date reflects
(i) the extent to which the vesting period has surpassed and (ii) the number of awards that, in the opinion of the
directors of the Group, will ultimately vest. This opinion is formed based on the best available information at balance
date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these
conditions is included in the determination of fair value at grant date. No expense is recognised for awards that do
not ultimately vest, except for awards where vesting is conditional upon a market condition. Where the terms of an
equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified.
In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification,
as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award
are treated as if they were a modification of the original award, as described in the previous paragraph.
92
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(ii) Employee benefits
Annual leave liabilities are measured at the amounts expected to be paid when the liabilities are settled. Long service
leave liabilities are measured at the present value of the estimated future cash outflows for the services provided by
employees up to the reporting date.
Liabilities not expected to be settled within twelve months are discounted using market yields at the reporting date
on high quality corporate bonds with terms to maturity that match, as closely as possible to the related liability.
(o)
Revenue
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity:
identifies the contract with a customer; identifies the performance obligations in the contract; determines the
transaction price which takes into account estimates of variable consideration and the time value of money; allocates
the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of
each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
(p)
(q)
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.
Income tax
(i) 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 Ltd.
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.
93
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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:
•
•
•
•
the term of exploration license in the specific area of interest has expired during the reporting period or will
expire in the near future, and is not expected to be renewed;
substantive expenditure on further exploration for and evaluation of mineral resources in the specific area
are not budgeted nor planned;
exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and a decision has been made to discontinue such
activities in the specified area; or
sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the
carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful
development or by sale.
94
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to
which the exploration activity relates. The cash generating unit shall not be larger than the area of interest. Each area
of interest is reviewed at the end of each accounting period and accumulated costs are written off to the extent that
they are not expected to be recoverable in the future.
(s) Rehabilitation provision
A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or
mined. The Group's mining and exploration activities are subject to various laws and regulations governing the
protection of the environment. The Group recognises management's best estimate for assets retirement obligations
and site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could differ
materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine
estimates and discount rates could affect the carrying amount of this provision.
(t) Critical accounting judgements and key sources of estimation uncertainty
In the application of AASB’S management is required to make judgments, estimates and assumptions about carrying
values of assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be reasonable under
the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these
estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in the
year of the revision and future years if the revision affects both current and future years.
Judgments made by management that have significant effects on the financial statements and estimates with a
significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the
financial statements and include:
• Note 9 - Deferred exploration, evaluation and development
Exploration and evaluation costs have been capitalised on the basis that mineral resource drilling is ongoing
and that the Group may commence commercial production in the future, from which time the costs will be
amortised in proportion to the depletion of the mineral resources. Key judgements are applied in considering
costs to be capitalised which includes determining expenditures directly related to these activities and
allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised
that are expected to be recovered either through successful development or sale of the relevant mining
interest.
• Note 12 – Provisions
A provision has been made for the present value of anticipated costs for future rehabilitation of land explored
or mined. The Group’s exploration activities are subject to various laws and regulations governing the
protection of the environment. The Group recognises management's best estimate for assets site
rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could differ
materially from the estimates.
• Note 28 - Measurement of share based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted. The fair value is determined by using Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The
accounting estimates and assumptions relating to equity-settled share-based payments would have no
impact on the carrying amounts of assets and liabilities within the next annual reporting period but may
impact profit or loss and equity.
95
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(u) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number
of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable
to ordinary shareholders and the weighted average number of ordinary shares outstanding which have been issued
for no consideration in relation to the dilutive potential ordinary shares, which comprise share options granted to
employees, contract personnel, shareholders and corporate entities engaged by the Group, that are expected to be
exercised.
(v)
Segment reporting
(i) Determination and presentation of operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components. All operating segments’ operating results are regularly reviewed by the Group’s Managing
Director and Chief Executive Officer to make decisions about resources to be allocated to the segment and assess
its performance, and for which discrete financial information is available.
Segment results that are reported to the Managing Director and Chief Executive Officer include items directly
attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise
mainly corporate assets (primarily the Company’s headquarters), head office expenses, and income tax assets and
liabilities. Segment capital expenditure is the total cost incurred during the period to acquire plant and equipment,
and intangible assets other than goodwill.
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.
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.
(i) Share-based payment transactions
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.
value
measurement hierarchy
Fair
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.
(w)
(x)
(y)
96
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2
(z)
(y) Rounding of amounts
Rounding of amounts
The Company is of a kind referred to in the Corporations Instrument 2016/191, issued by the Australian Securities
The Company is of a kind referred to in the Corporations Instrument 2016/191, issued by the Australian Securities
and Investment Commission, relation to ‘rounding off’. Amounts in this report have been rounded off in accordance
and Investment Commission, relation to ‘rounding off’. Amounts in this report have been rounded off in accordance
with that Corporations Instrument to the nearest thousand dollars or in certain cases, to the nearest dollar.
with that Corporations Instrument to the nearest thousand dollars or in certain cases, to the nearest dollar.
3
3
REVENUES AND EXPENSES
REVENUES AND EXPENSES
Other income
Other income
Sundry revenue
Sundry revenue
Profit on sale of plant, equipment and tenement area
Profit on sale of plant, equipment and tenement area
Services rendered to associate companies
Services rendered to associate companies
Total other income
Total other income
Other operational expenses
Other operational expenses
Contractor, consultants and advisory expense
Contractor, consultants and advisory expense
Investor and public relations
Investor and public relations
Communications and information technology
Communications and information technology
Depreciation
Depreciation
Loss on disposal of plant and equipment
Loss on disposal of plant and equipment
Occupancy
Occupancy
Travel and accommodation
Travel and accommodation
Directors fees and employment expenses
Directors fees and employment expenses
Other corporate and administrative expenses
Other corporate and administrative expenses
Total other operational expenses
Total other operational expenses
Non-operating expenses
Non-operating expenses
Net foreign exchange (gain)/loss
Net foreign exchange (gain)/loss
Other items written-off
Other items written-off
Share based payment expense
Share based payment expense
Total non-operating expenses
Total non-operating expenses
2019
2019
$’000
$’000
---
---
---
---
62
62
62
62
2019
2019
$’000
$’000
2,595
2,595
624
624
82
82
47
47
10
10
102
102
480
480
405
405
80
80
4,425
4,425
2019
2019
$’000
$’000
(1,152)
(1,152)
(40)
(40)
1,649
1,649
457
457
2018
2018
$000
$000
6
6
1,276
1,276
11
11
1,293
1,293
2018
2018
$’000
$’000
1,555
1,555
403
403
65
65
45
45
---
---
72
72
498
498
196
196
121
121
2,955
2,955
2018
2018
$’000
$’000
283
283
---
---
426
426
709
709
97
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
4 CASH AND CASH EQUIVALENTS
Other expenses
Cash and cash equivalents
Short term deposits
Reconciliation
Net loss
Adjustment for:
Depreciation
Loss on disposal of PPE
Movement in securities in other entities
Share base payments expense
(Loss) on movement in securities in other entities
Other items written off
Gain on disposal of plant and equipment
Gain on foreign exchange
Changes in assets and liabilities:
Decrease in trade and other payables
Decrease/(Increase) other current assets
Decrease/Increase in other non-current liabilities
Increase in provisions
Net cash used in operating activities
5
TRADE AND OTHER RECEIVABLES
Other expenses
Current receivables:
Security deposits (a)
Other receivables
Sale of Connors Arc Project – Queensland
Interest receivable
Taxes receivables
Non-current receivables:
Security deposits (a)
Deposits
2019
$’000
1,391
4
1,395
2019
$’000
(10,750)
47
10
---
1,649
(15)
(9)
---
(1,152)
(363)
2,736
(3,288)
430
(10,705)
2019
$’000
14
31
---
2
360
407
29
123
152
2018
$’000
4,782
29
4,811
2018
$’000
(8,833)
45
---
440
426
---
---
(1,276)
283
1,122
(7,798)
8,805
219
(6,567)
2018
$’000
---
14
2,500
3
616
3,133
43
123
166
Other receivables are non-interest bearing and are generally on 30-day terms.
(a) Security deposits comprise cash placed on deposit to secure bank guarantees in respect of obligations entered
into for office rental obligations in South Africa and Australia. These deposits are not available to finance the
Group’s day to day operations.
98
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
6
REHABILITATION BONDS
Other expenses
Current
Environmental bonds (a)
Non-current
Environmental bonds (a)
Total
2019
$’000
276
2,372
2,648
2018
$’000
215
2,139
2,354
(a) Environmental bonds are cash placed on deposit to secure bank guarantees in respect of obligations entered
into for environmental performance bonds issued in favour of the relevant government body for projects located
in Victoria, Australia and South Africa. The guarantees are held as both current and non-current receivables.
The Group also has environmental obligations for the Prieska Project. 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
12).
7
SECURITIES HELD IN OTHER ENTITIES
Other expenses
Opening balance – 1 July
Revaluation movement
Unlisted securities in other entities (a)
Listed securities in other entities
Closing balance – 30 June
2019
$’000
15
---
(15)
---
2018
$’000
455
(455)
15
15
Securities held in other entities as 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. Securities held in other entities as an investment of shares are those
listed on the ASX. Valuation as at period end is calculated using closing share price at that time.
(a) As at 30 June 2018, there was an indication that the Company’s carrying amount of unlisted securities held in
other entities may not be fully recoverable. As the carrying amount exceeded the recoverable amount, the asset
was impaired and written down to its recoverable amount.
99
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
8
PLANT AND EQUIPMENT
Other expenses
Opening balance – 1 July
Cost
Accumulated depreciation
Opening written down value
Additions
Disposals or write offs
Effect of movement in exchange rate
Depreciation expense for the year
Written down value at 30 June
Closing balance – 30 June
Cost
Accumulated depreciation
9 DEFERRED EXPLORATION, EVALUATION AND DEVELOPMENT
Other expenses
Acquired mineral rights
Opening cost
Exploration and evaluation acquired
Exploration, evaluation and development
Deferred exploration and evaluation expenditure
Opening cost
Expenditure incurred
Exploration expensed
Impairment
Asset derecognised – sale of tenements (a)
Deferred exploration and evaluation expenditure
Net carrying amount at 30 June
2019
$’000
445
(298)
147
4
(11)
2
(47)
95
425
(330)
2019
$’000
14,161
---
14,161
14,958
14,925
(3,053)
---
---
26,830
40,991
2018
$’000
1,069
(978)
91
101
---
(45)
147
445
(298)
2018
$’000
14,161
---
14,161
915
17,638
(2,371)
---
(1,224)
14,958
29,119
(a) On 2 May 2018, the Company signed a binding sale agreement with Evolution Mining Limited for 100% interest
in Connors Arc Project tenements. Under the terms of the sale agreement, completion was achieved as at 30
June 2018 and as a result, the project was derecognised at its carrying value of $1.224M.
100
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
10 LOAN - JOINT VENTURE PARTNERS
In September 2017, the Company entered into a binding earn-in agreement to acquire the earn-in rights over the
Jacomynspan Nickel-Copper-PGE Project (South Africa) (Jacomynspan Project) from two companies, Namaqua
Nickel Mining (Pty) Ltd and Disawell (Pty) Ltd (Namaqua Disawell Companies), which hold partly overlapping
prospecting rights and mining right applications. The earn-in agreement is principally on the same terms as the
binding term sheet entered into in July 2016.
Orion’s earn-in right will be via a South African-registered special-purpose vehicle and subsidiary of the Company,
Area Metals Holdings No 3 (Pty) Ltd (AMH3), which was 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.
During the reporting period, the Group continued to advance exploration programs on the Jacomynspan Project,
expending an additional $1.02M. This expenditure, under the terms of the agreement, is held in the shareholder loan
account and AMH3 is nearing the next stage earn-in right, which will see its shareholding increase by a further 25%
interest (making its total interest 50% (Orion 37%)) by expending a further $1.32M on the Jacomynspan Project
($1.98M total expenditure) over a further 12 months (2 years from Earn-In Commencement) (Second Earn In Right).
Other key points of the agreement:
•
The Namaqua Disawell Companies shareholders on the date of execution of the term sheet (Signature
Date) are entitled to a 2% royalty in proportion to their beneficial interest in the Namaqua Disawell
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, Orion shall have the right at its sole discretion to buy out the Royalty
for an aggregate value of $2.65M.
• As noted above, all expenditure by Orion shall be advanced to the Namaqua Disawell Companies as an
Orion loan. In addition to the Orion loan, the Namaqua Disawell Companies have existing shareholder loans
of ZAR78.5M (~$7.85M) as at the Signature Date.
As at 30
June 2019, the Orion
loan totalled $2.04M
(2018: $1.03M).
11 TRADE AND OTHER PAYABLES
Other expenses
Current
Trade payables
Other payables
2019
$’000
1,762
237
1,999
2018
$’000
1,499
864
2,363
101
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
12 PROVISIONS
Other expenses
Current
Employee benefits – annual leave
Rehabilitation
Non-current
Rehabilitation (a)
Employee benefits – long service leave
Total
2019
$’000
170
---
170
2,353
10
2,363
2,533
2018
$’000
138
---
138
1,963
2
1,965
2,103
(a)
In South Africa, long term environmental obligations are based on the Group’s environmental plans, in compliance
with current environmental and regulatory requirements. Full provision is made based on the net present value
of the estimated cost of restoring the environmental disturbance that has occurred up to the reporting date.
The
estimated cost of rehabilitation is reviewed annually and adjusted as appropriate for changes in legislation. The
rehabilitation provision for the Group’s South African project
($2,044M)
(refer
is offset by a guarantee held on deposit
Note
6).
where
In Australia, the state government regulations in
Group
and
sites
surface
reviewed
appropriate
and
Group’s Victorian project is partially offset
has
adjusted
the
annually
caused
as
Victoria
ground
for changes
require rehabilitation of drill sites including any other
is
disturbance.
the
in
The
legislation.
rehabilitation
provision
estimated
The
(refer Note
cost
rehabilitation
6).
for
of
by a guarantee held on deposit
13 LOANS WITH OTHER ENTITIES AND RELATED PARTIES
Other expenses
Current
Bridge loan (a)
Convertible loan (b)
Non-current
AASMF loan (c)
Total
(a) Bridge Loan
2019
$’000
---
3,947
3,947
1,748
1,748
5,695
2018
$’000
6,875
---
6,875
1,539
1,539
8,414
The Company announced to the ASX on 18 August 2017 that a $6.0M bridge loan facility agreement (Bridge Loan
Facility) had been entered into with Tembo Capital Mining Fund II LP and its affiliates (Tembo Capital), a
cornerstone shareholder of the Company.
The key terms of the Bridge Loan agreement are:
• Bridge Loan Amount - Up to $6.0M, available in two tranches. The first tranche is to be in one instalment of
$3.0M and the second tranche is to be in minimum instalments of $1.0M each;
•
Interest - capitalised at 12% per annum accrued daily on the amount drawn down;
102
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
13 LOANS WITH OTHER ENTITIES AND RELATED PARTIES (continued)
• Repayment - repayable on the earlier of 15 December 2017(extended to 30 September 2018) 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 Capital’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 Capital (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 Capital for the issue and allotment of Shares to Tembo Capital under the Equity Capital Raising
and/or at Tembo Capital’s election against the underwriting amount payable by Tembo Capital 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 Capital after the set-off will be paid by
Tembo Capital 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.
On 15 November 2017, an extension to the term of the Bridge Loan from 15 December 2017 to 31 May 2018, was
agreed between the parties.
As part of the terms of amendment, the Company agreed to increase the establishment fee from 5% to 6.67% of the
Bridge Loan facility amount (capitalised).
On 31 May 2018, an extension to the term of the Bridge Loan from 31 May 2018 to 30 September 2018 was agreed
between the parties.
Under the terms of the Convertible Loan (refer below), the Bridge Loan was repaid in full on 4 February 2019.
(b) Convertible Loan
On 25 January 2019, the Company announced a $3.6M loan facility with Tembo Capital (Loan Facility). The key
terms of the Loan Facility are:
•
•
Loan Facility Amount: Up to $3.6M, available in two tranches. The first tranche of $0.6M was used to repay
all amounts owing under the previous Bridge Loan (refer above), with further tranches to be in minimum
instalments of $1M each;
Interest: Capitalised at 12% per annum accrued daily on the amount drawn down;
• Repayment: Tembo Capital may elect for repayment of the outstanding amount to be satisfied by the issue
of Shares by the Company to Tembo Capital at a deemed issue price of $0.026 per Share, subject to receipt
of Shareholder approval. The Outstanding Amount must be repaid by 25 January 2020, or if Tembo Capital
elects to receive Shares in repayment of the outstanding amount in lieu of payment in cash, the date on
which the Shares are to be issued to Tembo Capital (or such later date as may be agreed between Tembo
Capital and Orion);
• Establishment fee:
o Cash - capitalised 5% of the Loan Facility Amount, payable on the Repayment date; and
o Options - 11M unlisted Orion options, exercisable at a price of $0.03 per option, expiring on the 17
June 2024.
• Security: Loan Facility is unsecured.
At year end, the balance of the Loan Facility was $3.95M (including capitalised interest and fees).
103
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
13 LOANS WITH OTHER ENTITIES AND RELATED PARTIES (continued)
(c) AASMF Loan
On 2 November 2015, Repli Trading No 27 (Pty) Ltd (Repli) (a 73.33% owned subsidiary of Agama Exploration &
Mining (Pty) Ltd (Agama)) 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
ZAR14.25M to Repli. The key terms of the agreement are as follows:
• Loan amount ZAR14.25M;
•
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 and at year end, the balance of the Loan
was $1.75M (including capitalised interest).
14 PREFERENCE SHARES
Other expenses
AASMF preference shares – principal
AASMF preference shares – provision for dividends and
settlement premium
Total
2019
$’000
1,593
936
2,529
2018
$’000
1,550
619
2,169
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, applied for a funding facility from the AASMF for the further exploration and development of the Prieska Project.
On 14 November 2014, AASMF approved the funding facility for an amount of ZAR30.0M, subject to certain terms
and conditions. The funding is provided in two tranches, the first tranche for ZAR15.75M by way of the issue of Repli
preference shares and the second tranche for ZAR14.25M by way of a loan from AASMF (refer Note 13).
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 15.75M Repli redeemable preference shares at a subscription
price of ZAR1 per redeemable preference share. The key terms of the agreement are as follows:
• 15.75M cumulative redeemable non-participating preference shares;
• Subscription price ZAR15.75M (~$1.59M);
• 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;
104
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
14 PREFERENCE SHARES (continued)
• 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 ZAR15.75M;
o any unpaid and accumulated dividends; and
o 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; and
• 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.
On 4 March 2019, the Company announced it had reached agreement with
Shares. Under the agreement, AASMF agreed to the redemption of the
for
Shares, the ASX and JSE listed parent company of Repli (Share Exchange Agreement).
AASMF to redeem
preference
shares
the preference
shares, in exchange for Orion
Under the terms of the Share Exchange Agreement and following the receipt of Orion shareholder approval,
of
satisfaction
ZAR25.05M (~A$2.5M), in connection
AASMF
Repli
amount
5 July 2019, the Company issued 77.57M
with the voluntary redemption of the preference shares by Repli, on
Shares to AASMF at a deemed issue price of $0.0323 per Share.
redemption
payable
the
by
to
of
in
15 CONVERTIBLE NOTES
Other expenses
Convertible note liability
Opening balance
Convertible note liability – movement
Convertible notes – converted
Closing balance
2019
$’000
6,001
(7)
(270)
5,724
2018
$’000
5,824
177
---
6,001
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 $6.05M. Key terms of the Convertible Notes are summarised as
follows:
• Maturity Date: 30 September 2019 (previously 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 $0.25M;
• 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;
105
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
15 CONVERTIBLE NOTES (continued)
• 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; and
• Security: secured over certain assets of the Company and its subsidiaries.
On 23 April 2019, the Company issued 10.38M Shares to a noteholder to satisfy the Company’s obligation to issue
Shares following the conversion of Convertible Notes.
Further details as to the key terms of the Convertible Notes are set out in the Company’s 8 March 2017 ASX release.
16
ISSUED CAPITAL AND RESERVES
Other expenses
Ordinary fully paid shares
2019
$’000
121,530
121,530
2018
$’000
102,460
102,460
The following movements in issued capital occurred during the reporting period:
Number of shares
Issue price
$’000
1,481,603,768
102,460
212,454,055
$0.037
172,918,918
$0.037
6,756,756
$0.037
50,625,000
$0.040
10,384,615
$0.026
2,000,000
$0.020
66,601,805
$0.040
---
---
7,861
6,398
250
2,025
270
40
2,664
(438)
2,003,344,917
121,530
Ordinary fully paid shares
Opening balance at 1 July 2018
Share Issues:
Placement (18 August 2018)
Placement (23 August 2018)
Placement (23 August 2018)
Placement (23 April 2019)
Placement (23 April 2019)
Placement (23 April 2019)
Placement (30 April 2019)
Less: Issue costs
Total
106
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
16 ISSUED CAPITAL AND RESERVES (continued)
The following movements in issued capital occurred during the prior period:
Ordinary fully paid shares
Opening balance at 1 July 2017
Share Issues:
Placement (17 August 2017)
Placement (3 November 2017)
Placement (18 December 2017)
Placement (19 December 2017)
Placement (29 December 2017)
Placement (21 May 2018)
Placement (29 June 2018)
Less: Issue costs
Total
Number of
shares
Issue price
$’000
917,420,440
85,497
73,000,000
$0.024
144,583,329
$0.024
84,583,333
$0.024
10,416,666
$0.024
60,000,000
$0.024
100,000,000
$0.050
91,600,000
$0.037
---
---
1,752
3,470
2,030
250
1,440
5,000
3,389
(368)
1,481,603,768
102,460
Share based payments reserve - movement
The employee share option and share plan reserve is used to record the value of equity benefits provided to
employees and directors as part of their remuneration.
The following movements in the share based payments reserve occurred during the period:
Other expenses
Opening balance at 1 July 2017
Share based payments expense
Unlisted share options expired and transferred to accumulated losses (i)
Closing balance at 30 June 2018
Share based payments expense
Unlisted share options expired and transferred to accumulated losses (i)
Closing balance at 30 June 2019
$’000
2,502
426
(825)
2,103
1,649
(1,065)
2,687
(i) During the year, previously recognised share based payment transactions for options which had vested but
subsequently expired were transferred to accumulated losses.
The following options to subscribe for ordinary fully paid shares expired during the year:
Class
Unlisted options
Total
Number of options
Expiry date
Exercise price
1,033,072
29/03/2019
$0.462
1,003,072
107
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
17
INCOME TAX
Other expenses
Income tax expense
(Loss) before tax
2019
$’000
2018
$’000
(10,750)
(8,833)
Income tax using the corporation rate of 27.5% (2018: 27.5%)
(2,956)
(2,429)
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
---
---
453
(2,503)
---
2,503
---
---
117
(2,312)
---
2,312
Income tax expense/(benefit)
---
---
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 $19.95M (2018:
$17.07M) which may be available to offset against taxable income in future years, subject to continuing to meet
relevant statutory tests.
The Group also has carry forward tax losses in South Africa of approximately ZAR3.94M (~$0.4M) (2018: ~$0.37M)
and unredeemed capital expenditure carried forward, which can be offset against future mining income, of
ZAR367.13M (~$37.12M) (2018: ~$21.05M).
Completed in the prior financial year, the Group reviewed the Australian entities estimated un-recouped gross
Australian income tax losses. Results of this review identified approximately $17.0M which may be available to the
Group to offset against future taxable income. Such benefits have not been recognised and will only be obtained
if:
•
•
•
the Group derives future assessable income of a nature and an amount sufficient to enable the benefit from
the deductions for the loss to be realised;
the Group continues to comply with the conditions for deductibility imposed by tax legislation; and
no changes in taxation legislation adversely affect the economic entity in realising the benefit from the
deductions for the losses.
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 Ltd, reports to the Australian Taxation Office on
behalf of all the Australian entities.
108
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
18 LOSS PER SHARE
18 LOSS PER SHARE
Basic loss per share amounts are calculated by dividing the net loss for the year attributable to ordinary equity holders
of the parent by the weighted average number of ordinary shares outstanding during the year.
Basic loss per share amounts are calculated by dividing the net loss for the year attributable to ordinary equity holders
of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net loss attributable to ordinary shareholders by
the weighted average number of ordinary shares outstanding during the year (adjusted for the effects of potentially
dilutive options and dilutive partly paid contributing shares).
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:
The following reflects the income and share data used to calculate basic and diluted earnings per share:
a) Basic and diluted loss per share
a) Basic and diluted loss per share
Other expenses
Other expenses
Loss attributable to owners of the Company
Loss attributable to owners of the Company
Diluted loss attributable to
owners of the Company
b) Reconciliation of loss used in calculating earnings per share
b) Reconciliation of loss used in calculating earnings per share
Other expenses
Other expenses
Loss from continuing operations attributable to equity holders of the Group
Loss from continuing operations attributable to equity holders of the Group
Loss attributable non-controlling interest
Loss attributable non-controlling interest
Loss attributable to owners of the Company
Loss attributable to owners of the Company
c) Weighted average number of shares
c) Weighted average number of shares
Other expenses
Other expenses
2019
2019
Cents
Cents
(0.53)
(0.53)
(0.53)
(0.53)
2019
2019
$’000
$’000
(10,750)
(10,750)
989
989
(9,761)
(9,761)
2018
2018
Cents
Cents
(0.76)
(0.76)
(0.76)
(0.76)
2018
2018
$’000
$’000
(9,270)
(9,270)
437
437
(8,833)
(8,833)
2019
2019
Number
Number
2018
2018
Number
Number
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share.
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share.
Weighted average number of ordinary shares and potential ordinary shares used as the
denominator in calculating diluted earnings per share.
Weighted average number of ordinary shares and potential ordinary shares used as the
denominator in calculating diluted earnings per share.
1,844,523,096
1,844,523,096
1,167,249,479
1,167,249,479
1,844,523,096
1,844,523,096
1,167,249,479
1,167,249,479
d) Headline loss per share
d) Headline loss per share
Other expenses
Other expenses
Loss before income tax
Loss before income tax
Impairment of non-current assets reversal
Impairment of non-current assets reversal
Plant and equipment written off
Plant and equipment written off
Adjusted earnings
Adjusted earnings
2019
2019
$’000
$’000
2018
2018
$’000
$’000
(9,761)
(9,761)
(8,833)
(8,833)
---
---
---
---
---
---
---
---
(9,761)
(9,761)
(8,833)
(8.833)
Weighted average number of shares
Weighted average number of shares
1,844,523,096
1,844,523,096
1,167,249,479
1,167,249,479
Earnings / (loss) per share (cents per share)
Earnings / (loss) per share (cents per share)
Diluted earnings / (loss) per share (cents per share)
Diluted earnings / (loss) per share (cents per share)
(0.53)
(0.53)
(0.53)
(0.53)
(0.76)
(0.76)
(0.76)
(0.76)
109
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
19 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.
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 up to $2,000 (2018: $1,000) based on year-end cash balances, and $nil (2018: $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. Other receivables represent GST refundable from the Australian Taxation Office, VAT refundable from
South African Revenue Office and security bonds and deposits. Trade and other receivables are neither past due
nor impaired.
110
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
19
FINANCIAL
INSTRUMENTS
(continued)
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
risking
incurring unacceptable
damage to the Group’s reputation. Refer to Note 2(a)(iii)
for a summary of the Group’s current plans for managing
its liquidity risk.
and stressed conditions,
under both
without
normal
losses
when
due,
or
The Group’s objective is to maintain a balance between continuity of funding and flexibility. The Group’s exposure
to financial obligations relating to corporate administration and projects expenditure, are subject to budgeting and
reporting controls, to ensure that such obligations do not exceed cash held and known cash inflows for a period of at
least 1 year.
Fair value of financial assets and liabilities
The fair value of cash and cash equivalents and non-interest bearing financial assets and financial liabilities of the
Group is equal to their carrying value.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their
fair values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current
market interest rate that is available for similar
financial liabilities.
is
Group
exposed
Foreign currency risk
the
The
The Group has foreign operations with functional currencies in South African Rand.
Group’s measurement currency.
The Group has not formalised a foreign currency risk management policy, however it monitors its foreign currency
expenditure in light of exchange rate movements.
expenditure
fluctuations
currencies
currencies
foreign
arising
other
from
than
to
in
in
The
has
Group
reporting period.
and financial liabilities which are denominated in a currency other than the Group’s functional currency.
the
significant
Foreign exposure risk arises from future commercial transactions and recognised financial assets
particularly
AUD/ZAR,
exposure
currency
between
foreign
risk,
end
the
at
of
to
Consolidated
Financial Assets
Trade and other receivables
Loan - Joint venture partner
Financial Liabilities
Trade and other payables
Loan
30 June 2019
30 June 2018
ZAR
$’000
391
2,042
1,544
1,748
EUR
$’000
GBP
$’000
---
---
23
---
---
---
21
---
ZAR
$’000
633
1,026
1,874
1,539
EUR
$’000
GBP
$’000
---
---
---
---
---
---
2
---
The Group’s exposure to foreign exchange is the predominately ZAR. Should the Australian dollar weaken by 10%
/ strengthen by 10% against the ZAR (2018: 5% weaken / 5% strengthen), with all other variables held constant, the
Groups profit before tax for the year would have been $0.09M lower / $0.09M higher (2018: $0.09M lower / $0.09M
higher). The change is the expected overall volatility of the ZAR:AUD, based on managements assessment of the
possible fluctuations, with consideration given to the last 6 months of the reporting period and spot rate at reporting
date.
Commodity price risk
The Group’s exposure to price risk is minimal at this stage of the operations. Commodity price risk is the risk that
the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market
rates. The risk arises from fluctuations in financial assets and liabilities that the Group uses.
Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern
in order to provide returns for shareholders and benefits for other stakeholders. The management of the Group’s
capital is performed by the Board.
111
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
19 FINANCIAL INSTURMENTS (continued)
The Board manages the Group’s liquidity ratio to ensure that it meets its financial obligations as they fall due and
specifically allowing for the expenditure commitments for its mining tenements to ensure that the Group’s main assets
are not at risk.
Refer to Note 2(a)(iii) for a summary of the Group’s current plan for managing its going concern.
None of the Group’s entities are subject to externally imposed capital requirements.
The following table sets out the carrying amount, by maturity, of the financial instruments that are exposed to interest
rate risk:
30 June 2019
Financial Assets
Cash on hand and at bank
Other receivables
Total
Financial Liabilities
Convertible note liability
Loans
Preference shares
Trade and other payables
Total
30 June 2018
Financial Assets
Cash on hand and at bank
Other receivables
Total
Financial Liabilities
Convertible note liability
Loans
Preference shares
Trade and other payables
Total
Weighted
average
interest rate
Floating
interest rate
$’000
Fixed interest
rate maturing
in 1 year or
less $’000
Fixed interest
rate maturing
in 2 to 5 years
$’000
Non-
interest
bearing
$’000
0.10%
1.90%
12.00%
12.00%
13.50%
2.00%
1,395
---
1,395
---
---
---
---
---
---
197
197
5,724
3,947
---
---
9,671
---
---
---
---
1,748
2,529
---
4,277
---
362
362
---
---
---
1,999
1,999
Weighted
average
interest rate
Floating
interest rate
$’000
Fixed interest
rate maturing
in 1 year or
less $’000
Fixed interest
rate maturing
in 2 to 5 years
$’000
Non-
interest
bearing
$’000
0.10%
2.40%
12.00%
12.00%
13.50%
2.15%
4,811
---
4,811
---
---
---
---
---
---
673
673
6,001
6,875
---
---
12,876
---
---
---
---
1,539
2,169
---
3,708
---
2,626
2,626
---
---
---
2,363
2,363
Total
$’000
1,395
559
1,954
5,724
5,695
2,529
1,999
15,947
Total
$’000
4,811
3,299
8,110
6,001
8,414
2,169
2,363
18,947
112
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
20 COMMITMENTS AND CONTINGENCIES
Tenement commitments – South Africa and Australia
The Group has a portfolio of tenements located in South Africa 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:
Other expenses
Within one year
After one year but not more than five years
More than five years
2019
$’000
---
---
---
---
2018
$’000
26
---
---
26
Guarantees
The Company has the following contingent liabilities at 30 June 2019:
•
•
•
The Group has bank guarantees in favour of the South African Government for rehabilitation obligations.
The total of these guarantees at 30 June 2019 was $2.64M (2018: $2.35M).
The Group also has negotiated bank guarantees in favour of the Victorian Government for rehabilitation
obligations of mining and exploration tenements. The total of these guarantees at 30 June 2019 was $0.25M
(2018: $0.25M). 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 2019) 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:
Other expenses
Within one year
After one year but not more than five years
More than five years
Total
2019
$’000
46
3
---
49
2018
$’000
53
36
---
89
Guarantees
The Company has the following bonds at 30 June 2019:
•
The Group has negotiated guarantees in favour of rental agreements. The total of these guarantees at 30
June 2019 was $3,117 (2018: $3,117).
113
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
21 RESTATEMENT OF PRIOR PERIOD BALANCES
Comparative amounts in the consolidated statement of profit or loss have been adjusted to reflect consistency in
the presentation in the financial report for the financial year ended 30 June 2019. Effects of the reclassifications
are:
Consolidated statement of profit or loss and other comprehensive income
Certain comparative figures have been reclassified in order to give a clearer reflection between the split of line
items in the statement of profit or loss. The effects of the reclassification are as follows:
Other expenses
Other income
Other expenses
Other operational expenses
Total non-operating expenses
Total
June 2018
(reclassified)
$’000
11
---
(2,955)
(709)
(3,653)
June 2018
$’000
---
(3,653)
---
---
(3,653)
Consolidated statement of financial position
Comparative amounts in the consolidated statement of financial position have been adjusted to reflect consistency
in the presentation in the financial report for the financial period ended 30 June 2018.
Other expenses
Current assets
Rehabilitation bonds
Other receivables
Total
Non-current assets
Rehabilitation bonds
Other receivables
Loans to associates (Namaqua & Disawell)
Total
June 2018
(reclassified)
$’000
June 2018
$’000
215
4
219
2,139
166
---
2,305
---
215
215
---
2,305
4
2,309
114
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
22 CONTROLLED ENTITIES
The consolidated financial statements include the financial statements of the Company and the subsidiary’s listed in
the following table.
Entity
Parent Entity
Orion Minerals Ltd
Subsidiaries
Goldstar Resources (WA) Pty Ltd
Kamax Resources Limited
Areachap Holdings No 1 Pty Ltd
Areachap Holdings No 2 Pty Ltd
Areachap Holdings No 3 Pty Ltd
RSA Services Ltd
Areachap Holdings No 1 (Mauritius) Ltd
Areachap Holdings No 2 (Mauritius) Ltd
Areachap Holdings No 3 (Mauritius) Ltd
Orion Group Services International Ltd
Areachap Investments 1 S.a r.l
Areachap Investments 2 S.a r.l
Areachap Investments 3 S.a r.l
Areachap Investments 6 S.a r.l
Agama Exploration & Mining (Pty) Ltd
Area Metals Holdings No 1 (Pty) Ltd
Area Metals Holdings No 2 (Pty) Ltd
Area Metals Holdings No 3 (Pty) Ltd
Area Metals Holdings No 4 (Pty) Ltd
Area Metals Holdings No 5 (Pty) Ltd
Orion Exploration No 1 (Pty) Ltd
Orion Exploration No 4 (Pty) Ltd
Orion Exploration No 5 (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
Associates
Namaqua Nickel Mining (Pty) Ltd
Disawell (Pty) Ltd
Parent Ownership
Interest
County of
Incorporation
2019
%
2018
%
Non-controlling
Interest
2019
%
2018
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Mauritius
Mauritius
Mauritius
Seychelles
Luxembourg
Luxembourg
Luxembourg
Luxembourg
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
100
100
100
100
100
100
---
---
---
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
73.33
73.33
70.00
74.00
97.46
25.00
25.09
100
100
100
100
100
100
100
100
100
100
---
---
---
---
100
100
100
100
100
100
100
100
100
100
100
100
73.33
73.33
70.00
74.00
97.46
25.00
25.09
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
26.67
26.67
30.00
26.00
2.54
N/A
N/A
26.67
26.67
30.00
26.00
2.54
N/A
N/A
Associates Note:
Associates listed above are not controlled by the Group and have no material impact on the Consolidated Financial Statements
as at 30 June 2019.
115
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
23 NON-CONTROLLING INTEREST
Other expenses
Opening balance – 1 July
Movement
Accumulated losses
Closing balance – 30 June
2019
$’000
2,233
(989)
1,244
2018
$’000
2,670
(437)
2,233
The non-controlling interest parties have the following interest in the Group South African subsidiaries:
Repli Trading No 27 (Pty) Ltd 26.67% (2018: 26.67%), Rich Rewards Trading 437 (Pty) Ltd 26.67% (2018: 26.67%),
Vardocube (Pty) Ltd 30% (2018: 30%), Bartotrax (Pty) Ltd 26.00% (2018: 26.00%) and Prieska Copper Mines Ltd
2.54% (2018: 2.54%).
24 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 9) is as follows:
Other expenses
Short-term employee benefits
Post-employment benefits
Share based payments
Total
2019
$
1,824,618
14,798
693,790
2,533,206
2018
$
1,627,419
892
206,277
1,834,588
Individual directors and executives compensation disclosures
Information regarding individual directors and executives’ compensation and some equity instruments disclosures as
required by Corporations Regulations 2M.3.03 are provided in the remuneration report section of the directors’ report.
Key management personnel and director transactions
A number of key management personnel, or their related parties, hold positions in other entities that result in them
having control, joint control or a relevant interest over the financial or operating policies of those entities.
A number of these entities transacted with the Group during the year. The terms and conditions of the transactions
with key management personnel and their related parties were no more favourable than those available, or which
might reasonably be expected to be available, on similar transactions to non-key management personnel related
entities on an arm’s length basis.
From time to time, Directors of the Group, or their related entities, may provide services to the Group. These services
are provided on terms that might be reasonably expected for other parties and are trivial or domestic in nature. The
following transactions occurred with related parties:
116
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
24 RELATED PARTIES DISCLOSURE (continued)
Other expenses
Payments for services to Tarney Holdings Pty Ltd
Total
2019
$
179,700
179,700
2018
$
164,673
164,673
Tarney Holdings Pty Ltd is an entity associated with the Company’s Chairman, Mr Denis Waddell. Mr Waddell
provides consulting services to the Group through Tarney Holdings through an agreement between both parties.
On 14 June 2019, unlisted options in the Company were issued to the Directors of Orion Minerals Ltd. The Company
issued 54,000,000 expiring on 30 April 2024. The issue was completed following receipt of shareholder approval at
a general meeting held on 7 June 2019.
25 AUDITOR REMUNERATION
Other expenses
Amounts received or due and receivable by BDO East Coast Partnership for:
An audit or review of the financial report of the Company and any other entity in the
Group
Total amount for BDO East Coast Partnership
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 - Australia
Total amount for RSM Australia Partners
Amounts received or due and receivable by BDO South Africa for:
An audit or review of the financial report of the Company and any other entity in the
Group
Professional services
-
corporate finance
Total amount for BDO South Africa
2019
$
28,500
28,500
---
---
---
98,650
14,660
113,310
2018
$
---
---
80,960
13,840
94,800
59,965
---
59,965
Total amount for auditors
141,810
154,765
117
ANNUAL REPORT 2019
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
26 SEGMENT REPORTING
26 SEGMENT REPORTING
The Group’s operating segments are identified and information disclosed, where appropriate, on the basis of internal
reports reviewed by the Company’s Board of Directors, being the Group’s Chief Operating Decision Maker, as defined
The Group’s operating segments are identified and information disclosed, where appropriate, on the basis of internal
by AASB 8. Reportable segments disclosed are based on aggregating operating segments where the segments
reports reviewed by the Company’s Board of Directors, being the Group’s Chief Operating Decision Maker, as defined
have similar characteristics.
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 2019 financial year, the
Group has actively undertaken exploration in South Africa, with segment recording from 29 March 2017. No asset
The Group’s core activity is mineral exploration within South Africa and Australia. During the 2019 financial year, the
or liability, or income in relation to the South African project has been recognised prior to acquisition in this reporting
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.
period.
Reportable segments are represented as follows:
Reportable segments are represented as follows:
30 June 2019
30 June 2019
Australia
Australia
South Africa
South Africa
Total
Total
$’000
$’000
$’000
$’000
$’000
$’000
Segment net operating loss after tax
Segment net operating loss after tax
(7,098)
(7,098)
(3,472)
(3,472)
(10,750)
(10,750)
Depreciation
Depreciation
Finance Income
Finance Income
Finance expense
Finance expense
Exploration expenditure written off and expensed
Exploration expenditure written off and expensed
(22)
(22)
45
45
(1,304)
(1,304)
(613)
(613)
(25)
(25)
183
183
(457)
(457)
(2,440)
(2,440)
(47)
228
(1,761)
(47)
228
(1,761)
(3,053)
(3,053)
Segment non-current assets
11,182
34,470
45,652
Segment non-current assets
30 June 2018
30 June 2018
Segment net operating loss after tax
Segment net operating loss after tax
Depreciation
Finance Income
Depreciation
Finance Expense
11,182
Australia
34,470
South Africa
45,652
Total
$’000
Australia
$’000
South Africa
$’000
Total
$’000
(5,115)
$’000
(3,718)
$’000
(8,833)
(5,115)
(26)
(32)
(26)
(1,602)
(3,718)
(19)
(8,833)
(45)
(182)
(214)
(403)
(19)
(2,005)
(45)
Finance Income
Exploration expenditure written off and expensed
(267)
(32)
(2,104)
(182)
(2,371)
(214)
Finance Expense
Exploration expenditure written off and expensed
Segment non-current assets
(1,602)
5,594
(267)
(403)
(2,005)
27,007
(2,104)
32,601
(2,371)
Segment non-current assets
5,594
27,007
32,601
118
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
27 PARENT ENTITY DISCLOSURES
As at, and throughout, the financial year ending 30 June 2019 the parent company of the Group was Orion Minerals
Ltd.
Other expenses
Result of parent entity
Loss for the period
Other comprehensive income
Total comprehensive loss for the period
Financial position of parent entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Total net assets
Total equity of the parent entity comprising of:
Issued capital
Accumulated losses
Other reserves
Total equity
2019
$’000
(4,604)
584
(4,020)
1,405
51,127
52,532
(10,186)
(2,226)
(12,412)
Restated
2018
$’000
(4,319)
---
(4,319)
4,273
36,492
40,765
(13,747)
(1,948)
(15,695)
40,120
25,070
121,530
(84,327)
2,917
40,120
102,460
(79,723)
2,333
25,070
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
Other expenses
Tenements
Minimum expenditure requirements:
Within one year
One year later and no later than five years
Later than five years
Total
2019
$’000
2018
$’000
---
---
---
---
---
---
26
---
---
26
119
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
27 PARENT ENTITY DISCLOSURES (continued)
Parent entity commitments in relation to rental property
Other expenses
Commitments
Rental property commitments
Total
Contingent liabilities
2019
$’000
3
3
2018
$’000
89
89
The Company has issued bank guarantees in respect of its rental agreements and mining tenements. Under the
terms of the financial guarantee contracts, the Company will make payments to reimburse the guarantors upon failure
of the Company to make payments when due. Refer to Note 20 for further detail.
Consolidated statement of profit or loss and other comprehensive income
Comparative amounts in the note relating to the parent entity's profit or loss have been adjusted to reflect the reversal
of historical exploration expenditure exclusively incurred on behalf of Masiqhame in carrying out the exploration
activities previously expensed in the parent entity. This has now been reversed and allocated to the project level.
The reclassification only effect the parent entity and has no effect on the consolidated financial statements. The effect
on the parent entity is as follow:
Other expenses
Expenses
Total
June 2018
Reclassified
$
---
---
2018
$
794,278
794,278
Consolidated statement financial position
Comparative amounts in the note relating to the parent entity's statement of financial position have been
adjusted to reflect the reversal of historical exploration expenditure exclusively incurred on behalf of
Masiqhame in carrying out the exploration activities previously expensed in the parent entity. This has
now been reversed and allocated to the project level. The reclassification only effect the parent entity and
has no effect on the consolidated financial statements. The effect on the parent entity is as follow:
Other expenses
Non-current assets
Accumulated losses
Total
June 2018
Reclassified
$
794,278
---
794,278
2018
$
---
794,278
794,278
120
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
28 SHARE BASED PAYMENTS
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
28 SHARE BASED PAYMENTS
FOR THE YEAR ENDED 30 JUNE 2019
The Group has an Option and Performance Rights Plan (OPRP) for the granting of options or performance rights to
28 SHARE BASED PAYMENTS
employees. There were 52.8M options granted to employees and consultants during the financial year (2018: Nil
28 SHARE BASED PAYMENTS
The Group has an Option and Performance Rights Plan (OPRP) for the granting of options or performance rights to
options) under the Company’s OPRP for a total transactional value of $2.79M.
The Group has an Option and Performance Rights Plan (OPRP) for the granting of options or performance rights to
employees. There were 52.8M options granted to employees and consultants during the financial year (2018: Nil
employees. There were 52.8M options granted to employees and consultants during the financial year (2018: Nil
The Group has an Option and Performance Rights Plan (OPRP) for the granting of options or performance rights to
options) under the Company’s OPRP for a total transactional value of $2.79M.
Outlined below is a summary of option movements during the financial year ended 30 June 2019 to employees under
options) under the Company’s OPRP for a total transactional value of $2.79M.
employees. There were 52.8M options granted to employees and consultants during the financial year (2018: Nil
the OPRP:
options) under the Company’s OPRP for a total transactional value of $2.79M.
Outlined below is a summary of option movements during the financial year ended 30 June 2019 to employees under
Outlined below is a summary of option movements during the financial year ended 30 June 2019 to employees under
the OPRP:
the OPRP:
30 June 2019
Outlined below is a summary of option movements during the financial year ended 30 June 2019 to employees under
the OPRP:
30 June 2019
Exercised
during
Expired
during the
Forfeited
during the
30 June 2019
Grant Date
Expiry Date
Exercise
price
Grant date
Expiry date
Exercise
price
Balance at
start of the
Balance at
start of the
year
Granted
during the
Granted
during the
year
Exercised
during
the year
Expired
during the
year
Forfeited
during the
year
Balance at
end of the
year
Balance at
end of the
Balance at
year
end of the
year
Consolidated as at 30 June 2019
29-Apr-19
Consolidated as at 30 June 2019
Consolidated as at 30 June 2019
29-Apr-19
30-Apr-24
29-Apr-19
29-Apr-19
29-Apr-19
29-Apr-19
29-Apr-19
29-Apr-19
29-Apr-19
29-Apr-19
21-Sep-18
29-Apr-19
29-Apr-19
21-Sep-18
21-Sep-18
21-Sep-18
21-Sep-18
21-Sep-18
21-Sep-18
21-Sep-18
21-Sep-18
21-Sep-18
31-May-17
21-Sep-18
21-Sep-18
31-May-17
31-May-17
31-May-17
31-May-17
31-May-17
31-May-17
12-Dec-14
12-Dec-14
31-May-17
30-Apr-24
30-Apr-24
30-Apr-24
30-Apr-24
30-Apr-24
30-Apr-24
30-Apr-24
30-Apr-24
30-Apr-24
31-Mar-23
30-Apr-24
30-Apr-24
31-Mar-23
31-Mar-23
31-Mar-23
31-Mar-23
31-Mar-23
31-Mar-23
31-Mar-23
31-Mar-23
31-Mar-23
31-May-22
31-Mar-23
31-Mar-23
31-May-22
31-May-22
31-May-22
31-May-22
31-May-22
31-May-22
30-Nov-19
30-Nov-19
31-May-22
30-Nov-19
30-Nov-19
30-Nov-19
30-Nov-19
30-Nov-19
30-Nov-19
31-May-17
31-May-17
31-May-17
31-May-17
31-May-22
31-May-22
31-May-22
31-May-22
12-Dec-14
12-Dec-14
12-Dec-14
12-Dec-14
12-Dec-14
Total
Total
12-Dec-14
Total
Weighted average exercise price
Weighted average exercise price
Total
Weighted average exercise price
$0.04
$0.04
$0.05
$0.04
$0.04
$0.05
$0.06
$0.05
$0.05
$0.06
$0.05
$0.06
$0.06
$0.05
$0.06
$0.05
$0.05
$0.06
$0.07
$0.06
$0.06
$0.07
$0.030
$0.07
$0.07
$0.030
$0.045
$0.030
$0.030
$0.045
$0.045
$0.060
$0.060
$0.045
$0.060
$0.045
$0.045
$0.060
$0.045
$0.06
$0.06
$0.045
$0.06
$0.06
year
---
year
12,500,000
the year
---
---
---
---
---
---
---
---
---
---
---
---
---
12,500,000
12,500,000
12,500,000
12,500,000
12,500,000
12,500,000
12,500,000
12,500,000
12,500,000
5,100,000
12,500,000
12,500,000
5,100,000
---
---
---
---
---
---
---
---
12,300,000
---
---
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
250,000
250,000
12,300,000
250,000
250,000
250,000
250,000
250,000
37,400,000
37,400,000
250,000
37,400,000
0.044
0.044
37,400,000
0.044
5,100,000
5,100,000
5,100,000
5,100,000
5,100,000
5,100,000
5,100,000
5,100,000
---
5,100,000
5,100,000
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
52,800,000
52,800,000
---
52,800,000
0.053
0.053
52,800,000
0.053
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
year
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
year
---
year
12,500,000
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
12,500,000
---
---
---
---
12,500,000
12,500,000
12,500,000
12,500,000
---
---
12,500,000
5,100,000
---
---
5,100,000
5,100,000
---
---
5,100,000
5,100,000
12,500,000
12,500,000
12,500,000
12,500,000
5,100,000
12,500,000
5,100,000
5,100,000
5,100,000
5,100,000
---
---
(200,000)
5,100,000
---
---
(200,000)
12,100,000
---
---
12,100,000
5,100,000
---
---
(200,000)
(200,000)
(200,000)
(200,000)
12,100,000
12,100,000
12,100,000
12,100,000
---
---
(200,000)
(200,000)
(200,000)
(200,000)
12,100,000
12,100,000
12,100,000
12,100,000
---
---
(200,000)
---
---
(200,000)
---
---
---
---
12,100,000
250,000
250,000
12,100,000
250,000
250,000
---
---
250,000
250,000
---
(600,000)
(600,000)
---
---
---
250,000
89,600,000
89,600,000
250,000
(600,000)
0.045
89,600,000
0.050
---
---
0.045
(600,000)
0.050
89,600,000
0.045
0.050
Weighted average exercise price
Outlined below is a summary of option movements during the financial year ended 30 June 2018 to employees under
Outlined below is a summary of option movements during the financial year ended 30 June 2018 to employees under
the OPRP:
Outlined below is a summary of option movements during the financial year ended 30 June 2018 to employees under
the OPRP:
the OPRP:
Outlined below is a summary of option movements during the financial year ended 30 June 2018 to employees under
30 June 2018
the OPRP:
30 June 2018
30 June 2018
0.044
0.045
0.053
---
---
0.050
Grant Date
Expiry Date
Grant date
Expiry date
Exercise
price
Exercise
price
Grant Date
Consolidated as at 30 June 2018
Consolidated as at 30 June 2018
31-May-17
Expiry Date
31-May-22
price
$0.030
31-May-17
31-May-17
31-May-17
Consolidated as at 30 June 2018
Balance at
start of the
Balance at
start of the
year
start of the
12,300,000
year
Exercised
during
Exercised
during
the year
Granted
during the
Granted
during the
year
during the
---
year
during
---
the year
Forfeited
during the
Forfeited
during the
year
Expired
during the
Expired
during the
year
during the
year
---
Balance at
end of the
Forfeited
Balance at
year
during the
end of the
Forfeited
year
year
during the
12,300,000
---
year
12,300,000
12,300,000
---
---
---
Balance at
end of the
Balance at
year
end of the
year
12,300,000
31-May-17
31-May-17
31-May-17
31-May-17
31-May-17
24-Sep-13
31-May-17
31-May-17
24-Sep-13
24-Sep-13
24-Sep-13
31-May-17
24-Sep-13
24-Sep-13
24-Sep-13
24-Sep-13
24-Sep-13
12-Dec-14
24-Sep-13
24-Sep-13
12-Dec-14
12-Dec-14
12-Dec-14
12-Dec-14
24-Sep-13
Total
31-May-22
31-May-22
31-May-22
31-May-22
31-May-22
31-May-22
31-May-22
31-May-22
31-May-18
31-May-22
31-May-22
31-May-18
31-May-18
31-May-18
31-May-22
31-May-18
31-May-18
31-May-18
31-May-18
31-May-18
30-Nov-19
31-May-18
31-May-18
30-Nov-19
30-Nov-19
30-Nov-19
30-Nov-19
31-May-18
$0.030
$0.045
$0.030
$0.045
$0.060
$0.045
$0.030
$0.060
$0.15
$0.060
$0.045
$0.15
$0.25
$0.15
$0.060
$0.25
$0.35
$0.25
$0.15
$0.35
$0.045
$0.35
$0.25
$0.045
$0.06
$0.045
$0.06
$0.35
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
12,300,000
1,000,000
12,300,000
12,300,000
1,000,000
1,000,000
1,000,000
12,300,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
250,000
1,000,000
1,000,000
250,000
250,000
250,000
250,000
1,000,000
40,400,000
12-Dec-14
Total
12-Dec-14
Weighted average exercise price
30-Nov-19
30-Nov-19
$0.06
$0.045
250,000
40,400,000
250,000
0.060
Total
12-Dec-14
Weighted average exercise price
30-Nov-19
Weighted average exercise price
Total
Weighted average exercise price
$0.06
0.060
40,400,000
250,000
0.060
40,400,000
0.060
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
(1,000,000)
---
---
(1,000,000)
(1,000,000)
---
---
(1,000,000)
(1,000,000)
---
---
(1,000,000)
---
---
---
---
---
(1,000,000)
---
(1,000,000)
(1,000,000)
(1,000,000)
(1,000,000)
---
---
---
(3,000,000)
---
(1,000,000)
---
(3,000,000)
---
---
---
---
---
---
---
---
---
---
(3,000,000)
---
---
(3,000,000)
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
---
12,300,000
12,300,000
---
---
---
---
12,300,000
12,300,000
12,300,000
---
12,300,000
12,300,000
---
---
---
12,300,000
---
---
---
---
---
---
---
250,000
---
---
---
---
250,000
250,000
---
---
---
---
250,000
37,400,000
250,000
---
37,400,000
0.044
---
---
250,000
250,000
---
---
0.044
37,400,000
250,000
---
---
---
0.044
37,400,000
0.044
121
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS cont inued
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
28 SHARE BASED PAYMENTS (continued)
Set out below are the unlisted options exercisable at the end of the financial year:
Grant date
Expiry date
2019
2018
2017
14 June 2019
30 April 2024 18,000,000
29 April 2019
30 April 2024 12,500,000
21 Sep 2018
31 May 2023
5,100,000
---
---
---
31 May 2017
31 May 2022 12,300,000 12,300,000
---
---
---
---
26 Nov 2015
30 Nov 2020
5 Jul 2013
5 Jul 2013
30 Apr 2018
31 May 2018
24 Sep 2013
31 May 2018
---
---
---
---
18,333,333 18,333,333
---
---
---
2,000,000
14,000,000
4,000,000
Total
47,900,000 30,633,333 38,333,333
The fair values of the options are estimated at the date of grant using the Black Scholes option pricing model. The
following table outlines the assumptions made in determining the fair value of the options granted during the year:
Grant date
Expiry Date
Share price at
grant date
Exercise
price
Expected
volatility
Risk-free
interest rate
Fair value at
grant date
29 April 2019
30 April 2024
29 April 2019
30 April 2024
29 April 2019
30 April 2024
21 Sep 2018
31 May 2023
21 Sep 2018
31 May 2023
21 Sep 2018
31 May 2023
$0.034
$0.034
$0.034
$0.034
$0.034
$0.034
$0.04
$0.05
$0.06
$0.05
$0.06
$0.07
93.72%
93.72%
93.72%
94.27%
94.27%
94.27%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
$0.024
$0.023
$0.022
$0.022
$0.021
$0.020
The weighted average contractual life for the share options outstanding as at 30 June 2019 is between 1 and 4 years
(2018: 1 and 4 years).
Total expenses arising from share-based payment transactions recognised during the year as part of employee
benefit expense was $1.65M (2018: $0.43M). Options which expired during the financial year were written back to
accumulated losses, $1,064,932.
29
SUBSEQUENT EVENTS AFTER THE BALANCE DATE
in
not
has
arisen
item,
There
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:
between
financial
interval
report
year
date
end
any
this
the
the
the
and
the
of
of
On
24
conversion
Company
Group’s
the
September
the
of
will
issue
current
held
security
the
2019,
Convertible
to
Shares
liabilities
by
Noteholders
will
held
Company
Notes
the
reduce
over
announced
them
by
on
(as
assets
by
certain
Noteholders
$5.8M
receipt
into
or
10.3M
the
of
of
Orion
before
conversion
paid
maturity
were
fully
the
notes
Company
notices
ordinary
date.
converted
its
all
shares
Upon
into
subsidiaries
Noteholders,
the
of
in
be
in
issue
Shares
will
Company.
the
April
released.
requesting
The
the
and
Shares,
2019)
from
and
On 12 September 2019, the Company announced completion of the BEE restructure, whereby 86M Shares were
issued to satisfy, in full, the repurchase of shares
subsidiary
entities Repli, Rich Rewards Trading 437 (Pty) Ltd and Bartotrax (Pty) Ltd. The final component of the BEE
restructure is expected to be implemented shortly.
held by existing BEE investors in the Company’s
of
per
price
$0.04
April 2019 an $8M capital raising comprising the issue of 200.9M Shares at an
The Company announced on 16
unlisted
issued
together
every
issue
attaching
Share,
31 October 2019) (Options), to be conducted
(100.47M options at an exercise price of $0.05 and an expiry date of
via
of
Placement
$4.69M in Tranche 1 issued in April 2019 and, subject to shareholder approval, which was obtained at a general
meeting on 7 June 2019, an additional $3.34M in Tranche 2. Following year end:
(Placement).
sophisticated
professional
placement
investors
Shares
option
made
was
with
free
The
one
and
two
for
up
to
a
•
•
•
122
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
29 SUBSEQUENT EVENTS AFTER THE BALANCE DATE (continued)
o
o
o
6 September 2019, the Company announced an issue of 20M Shares and 10M unlisted options as part
of the placement under Tranche 2;
9 August 2019, the Company announced an issue of 33.71M Shares and 16.85M unlisted options as
part of the placement under Tranche 2; and
22 July 2019, the Company announced an issue of 30M shares and 15M unlisted options as part of the
placement under Tranche 2;
• On 4 March 2019, the Company announced that it had reached agreement with AASMF for Repli to redeem the
preference shares held by AASMF for Shares. Shareholder approval was obtained and following reporting period
end, on 5 July 2019, Repli voluntarily redeemed the preference shares, in consideration for which the Company
issued 77.57M Shares to AASMF (redemption amount payable ZAR25.05M (~$2.5M).
123
ANNUAL REPORT 2019
FINANCIAL STATEMENTS
DIR ECT OR S’ DECLARATION
Directors’ Declaration
1
In the opinion of the directors of Orion Minerals Ltd (the Company):
(a)
the consolidated financial statements and notes that are set out on pages 82 to 123 and the Remuneration
report set out on pages 69 to 78, 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 2019 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
draw
directors
considered in forming their view that there are reasonable grounds to believe that the Company will be able
The
have
to pay its debts as and when they become due and payable.
consolidated
statements
directors
attention
financial
2(a)(iii)
which
Note
the
the
to
to
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 2019.
The directors draw attention to Note 2 to the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Waddell
Denis
Chairman
Perth, Western Australia
24
September
2019
124
Tel: +61 3 9603 1700
Fax: +61 3 9602 3870
www.bdo.com.au
Collins Square, Tower Four
Level 18, 727 Collins Street
Melbourne VIC 3008
GPO Box 5099 Melbourne VIC 3001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Orion Minerals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Orion Minerals Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2019, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO Australia Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO Australia Ltd are members of BDO International Ltd,
a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved
under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
Material uncertainty related to going concern
We draw attention to Note 2(a)(iii) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
Group’s ability to continue as a going concern and therefore the Group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
EXPLORATION AND EVALUATION COSTS
Key audit matter
How the matter was addressed in our audit
The Group has incurred significant exploration and
evaluation expenditures which have been capitalised.
As the carrying value of exploration and evaluation
expenditures represents a significant asset of the
Group, we considered it necessary to assess whether
facts and circumstances existed to suggest that the
carrying amount of this asset may exceed its
recoverable amount.
AASB 6 Exploration for and Evaluation of Mineral
Resources contains detailed requirements with respect
to both the initial recognition of such assets and
ongoing requirements to continue to carry forward the
assets.
Note 2(q) and note 9 to the financial statements
contains the accounting policy and disclosures in
relation to exploration and evaluation expenditures.
Our audit procedures included, amongst others:
•
•
•
•
Obtaining evidence that the Group has valid
rights to explore in the areas represented by
the capitalised exploration and evaluation
expenditures by obtaining independent
searches;
Confirming whether the rights to tenure of
the areas of interest remained current at
reporting date as well as confirming that
rights to tenure are expected to be renewed
for tenements that will expire in the near
future;
Agreeing a sample of the additions to
capitalised exploration expenditure during
the year to supporting documentation, and
ensuring that the amounts were permissible
and capitalised correctly;
Reviewing the directors' assessment of the
carrying value of the exploration and
evaluation expenditure, ensuring that
management have considered the effect of
potential impairment indicators, commodity
prices and the stage of the Group's projects;
Reviewing public (ASX) announcements and
reviewing minutes of directors’ meetings to
ensure that the Company had not decided to
discontinue activities in any of its areas of
interest.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2019, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 69 to 78 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of Orion Minerals Limited, for the year ended 30 June 2019,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO East Coast Partnership
James Mooney
Partner
Melbourne, 24 September 2019
FINANCIAL STATEMENTS
A DDI T IONAL ASX INFORMATION
Shareholder Information for the year ended 30 June 2019
Shareholdings
At 31 August 2019, the issued share capital of the Company was held as follows:
Distribution of ordinary shares and option holders
1 - 1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
Fully paid ordinary shares
Options
No. of holders
No. of shares
No. of holders
No. of options
314
138
59
528
572
1,611
92,688
507,726
649,415
28,104,576
1,848,155,239
2,144,619,024
–
–
–
–
44
44
–
–
–
–
302,166,749
302,166,749
Holders of non-marketable parcels
Shareholders holding less than a marketable parcel on the ASX register was 272.
Ndovu Capital X BV
Independence Group NL
Tarney Holdings Pty Ltd
Anglo American sefa Mining Fund
JP Morgan Nominees Australia Pty Ltd
Silja Investment Ltd
Ilwella Pty Ltd
Delphi Unternehmensberatung Aktiengesellschaft
The names of the 20 largest holders of ordinary fully paid shares are:
1
2
3
4 Wyllie Group Pty Ltd
5
6
7
8
9
10 Ubhejane Resources
11 Botsis Holdings Pty Ltd
12 Perth Select Seafoods Pty Ltd
13 Dr Leon Eugene Pretorius
14 Power Matla Mining Pty Ltd
15 Safika Resources Pty Ltd
16 Belair Australia Pty Ltd
17 Kinsella Holdings Ltd
18 Baramakama Investments Holdings Pty
19 Kolobe Nala Investment Company
20 Berend van Deventer
Total issued ordinary share capital
Substantial shareholders
The following shareholders are recorded in the Company’s register of substantial shareholders:
Ordinary shares
480,918,918
154,166,666
111,714,746
109,760,360
77,567,412
69,066,860
56,706,577
54,054,054
49,506,280
30,000,000
29,816,666
24,000,000
24,000,000
23,905,533
22,500,000
21,000,000
19,366,666
19,303,757
19,101,805
18,631,065
1,415,087,365
2,144,619,024
%
22.42%
7.19%
5.21%
3.71%
3.62%
3.22%
2.64%
2.52%
2.31%
1.40%
1.39%
1.12%
1.12%
1.11%
1.05%
0.98%
0.90%
0.90%
0.89%
0.87%
65.98%
Holders giving notice
Date of notice
Ordinary shares as at date of notice
% holding as at date of notice
Tembo Capital and Ndovu Capital X BV 30-04-2019
Denis Waddell
Independence Group NL
Wyllie Group
27-08-2018
27-08-2018
30-04-2019
480,918,918
109,714,746
154,166,666
109,760,360
This information is based on substantial holder notifications provided to the Company.
Voting rights
The Company’s issued shares are one class with each share being entitled to one vote.
Franking credits
The Company has nil franking credits.
24.01
5.86
8.23
5.67
129
ANNUAL REPORT 2019 SHAREHOLDERS INFORMATION
TE NEMENT SCHEDULE
Right / tenement
Status
Ownership
interest
Grant date
Expiry date
Holder 1
Project
South Africa
Prieska
Marydale
NC30/5/1/1/2/10445PR
Granted
ORN 73.33%
8/9/10
NC30/5/1/2/2/10244PR
Granted
ORN 73.33%
10/2/10
Vardocube
NC30/5/1/1/2/11841PR
Granted
ORN 70.00%
9/3/18
Bartotrax
NC30/5/1/1/2/11850PR
Granted
ORN 74.00%
9/3/18
Donnies Pan
NC30/5/1/1/2/11840MR
Granted
ORN 73.33%
29/9/18
Not executed
Namaqua-Disawell NC30/5/1/1/2/10032MR
Granted
ORN 18.50%
19/9/16
Not executed
Namaqua-Disawell NC30/5/1/1/2/10938PR
Granted
ORN 18.50%
9/11/17
Namaqua-Disawell NC30/5/1/1/2/11010PR
Granted
ORN 18.50%
9/11/17
Masiqhame
NC30/5/1/1/2/12292PR
Granted
ORN 50.00%
27/3/14
NC30/5/1/1/2/10138MR
Granted
ORN 73.33%
23/8/19
Prieska
Prieska
Prieska
NC30/5/1/1/2/12197PR
Application
NC30/5/1/1/2/12196PR
Application
Vardocube
NC30/5/1/2/2/10146MR
Application
Jacomynspan
NC30/5/1/1/2/12216PR
Application
Western Australia
Fraser Range
E28/2367
Fraser Range
E28/2378
Fraser Range
E28/2462
Fraser Range
E28/2596
Fraser Range
E39/1653
Fraser Range
E39/1654
Fraser Range
E69/2379
Fraser Range
E69/2707
Fraser Range
E39/1658
Fraser Range
E39/1818
Fraser Range
E69/2706
Victoria
Walhalla
Walhalla
EL5042
EL6069
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
–
–
–
–
–
–
–
–
KMX 30%
7/5/15
KMX 30%
22/7/15
KMX 30%
27/7/15
KMX 30%
6/9/16
KMX 35%
20/4/12
ORN 10%
23/4/12
ORN 10%
21/5/13
ORN 10%
19/6/15
–
–
–
–
–
–
–
–
–
–
2/11/19
29/2/20
24/4/23
8/3/23
8/11/22
8/11/22
11/3/19
2
22/8/43
–
–
–
–
6/5/20
21/7/20
26/7/20
5/9/21
19/4/22
22/4/22
20/5/23
18/6/20
–
–
–
–
–
REP
RPT
VAR
BAR
REP
NAM
DIS
DIS
MAS
REP
–
–
–
–
IGO
IGO
IGO
IGO
IGO & GRPL
IGO & NBX
IGO & PON
IGO & PON
–
–
–
–
–
1 Holder abbreviations – ORN (Orion Minerals Ltd); GRPL (Geological Resources Pty Ltd); IGO (Independence Group NL); KMX (Kamax Resources
Limited); NBX (NBX Pty Ltd); PON (Ponton Minerals Pty Ltd); NAM (Namaqua Nickel Mining (Pty) Ltd); DIS (Disawell (Pty) Ltd); MAS (Masiqhame 855
(Pty) Ltd); REP (Repli Trading No 27 (Pty) Ltd); VAR (Vardocube (Pty) Ltd); BAR (Bartotrax (Pty) Ltd); RRT (Rich Rewards Trading 437 (Pty) Ltd; OE1
(Orion Exploration No 1 (Pty) Ltd); OE4 (Orion Exploration No 4 (Pty) Ltd).
2 Renewal application lodged.
130
29
Cu
Copper
30
Zn
Zinc
28
Ni
Nickel
27
Co
Cobalt
ASX: ORN | JSE: ORN
www.orionminerals.com.au