Orion Minerals Ltd (ASX:ORN) will use $11 million in placement funds to advance a bankable feasibility study (BFS) on the Prieska Zinc-Copper Project in South Africa.
Funds will also be used to continue exploration programs on highly prospective tenements in the country’s Northern Cape region as well as for working capital.
The placement to sophisticated and professional investors at 3.7 cents per share is oversubscribed.
READ: Orion Minerals secures 5 million from Independence Group for base metal development strategy
In addition, Tembo Capital Mining Fund II LP and affiliated entities have confirmed their continued support of Orion by subscribing for $6.3 million in shares, which will increase its holding to 22.99%.
This will enable Orion to reduce its loan facility with Tembo Capital to $600,000.
Orion will also seek shareholder approval for chairman Denis Waddell to subscribe for $250,000 in shares at the same price as the placement.
READ: Orion Minerals says exploration activities in South Africa highlights very encouraging high potential for mineralisation
Managing director and CEO Errol Smart said: “We look forward to putting investors funds to work.
“Our primary focus is Prieska, however, given the quantum of funds raised under the placements, we are also in the fortunate position of being able to invest in the exploration of our highly prospective landholdings.
“These present significant potential further upside for shareholders.”
BFS to be completed in around 6 months
The BFS is scheduled to be completed in late 2018 or early 2019.
Prieska is said to be one of the world’s 30 largest volcanogenic massive sulphide ore deposits.
Chairman Denis Waddell said: “We are delighted with the support received from new and existing shareholders and welcome a number of new institutional investors to the register.
“The quality of support for the placement signals the change in investment grade of the company as it moves closer to its production goals.”