Orion Minerals has again tapped its board of directors to inject liquidity into the business as the costly transition from explorer to miner weighs on the group’s share price.
On Monday, Orion announced that it had received a $500,000 (R9m) loan facility from Tarney Holdings, of which chair Denis Waddell is a director and shareholder.
This follows a similar announcement in April, when the group secured an A$2m (R23.14m) loan facility from “long term supportive shareholder” Ratel Growth, whose controlling interest is owned by former Orion director Thomas Borman.
In both cases, Orion said the loans reflected continued support for the firm. The moves partly reflect a vote of confidence in Orion’s prospects as it transitions from a pure exploration company to a developer and operating copper miner.
However, news of Waddell’s loan dealt a blow to the group’s share price, causing it to extend its year-to-date losses. Shares fell by more than 6% in morning trading, having given up 26% since the start of the year.
The fall may reflect concern over the company’s ability to raise capital, with only A$1.66m in cash on hand at end-March.
In the past year, Orion has doubled down on its copper ambitions, racking up A$1.18m in contractor and adviser expenses and A$2.44m in exploration expenditure in the six months to end-December 2024.
The added costs resulted in Orion widening its operating loss to A$6.52m in the period, compared with A$5.56m in the previous second half.
The group also issued 12.16-million new shares in February to raise more capital.
Still, Orion has been upbeat about the prospects for its SA mine development projects, which it hopes will allow it to start selling copper by next year.
After his appointment in early April, CEO Anthony Lennox told shareholders his focus was on transitioning the company into a base metal producer in the near term.
In late April, investors welcomed feasibility studies for its Prieska Copper Zinc Mine (PCZM), the group’s flagship project and the first mine it plans to develop in SA, and its Flat Mines operation, the first mine to be developed at its Okiep Copper Project.
By bringing PCZM and Okiep to first production, Orion expects to sell its first copper in late 2026 and aims to grow production to more than 50,000 tonnes a year by the end of the decade.
The opportunities in copper are clear, with demand for the metal expected to surge more than 40% by 2040, driven by the growth of electric cars, solar panels and data centres.
A report by the UN Conference on Trade and Development (UNCTAD) estimates that 80 new copper mines and $250bn in investment are needed to meet global copper demand over the next five years.
However, new copper projects tend to move slowly, with new mines taking up to 25 years to develop, according to UNCTAD.
In previous decades, Okiep consistently produced 30,000-40,000 tonnes of copper a year under the ownership of Newmont and Gold Fields, while PCZM is expected to produce 213,055 tonnes over its lifespan.
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