Orion Minerals Ltd (ASX:ORN, JSE:ORN) has agreed to extend the deadline on an outstanding deal to acquire the remaining vendor interests at its highly prospective Jacomynspan Nickel-Copper-PGE Project, 65 kilometres north of its Prieska Copper-Zinc-Project in South Africa.
Orion and the other current shareholders in the Jacomynspan Project have moved the date by which the agreement must become unconditional from February 27, 2022, to April 30, 2022.
The extension will provide additional time for the parties to discuss a potential expanded and revised transaction whereby additional prospective Southern African nickel projects will be combined with the Jacomynspan Project.
Background to the Jacomynspan sale
In September 2017, Orion entered a binding earn-in agreement to acquire the earn-in rights over the Jacomynspan Project from two companies, Namaqua Nickel Mining and Disawell.
The two companies hold partly overlapping prospecting rights, some of which may be subject to amendment, and a mining right that is subject to notarial execution.
In July 2020, the company entered into an agreement whereby Orion or a nominated subsidiary would acquire the remaining shares in the Namaqua and Disawell companies held by the other shareholders in the two companies.
Simplified ownership and management structure
The transaction was designed to simplify the ownership and management structure of the Jacomynspan Project. On August 31, 2020, the parties struck a comprehensive deal incorporating the principal terms and conditions set out in the initial agreement.
This agreement is subject to the satisfaction or waiver of specified suspensive conditions. While some of these conditions have been fulfilled, the agreement remains subject to the satisfaction or waiver of certain remaining suspensive conditions, including that, on or before February 27, 2022 – the final completion date – all regulatory approvals required for the purposes of implementing the transaction had been received.
Extension of final completion date
The parties to the agreement have now agreed to extend this deadline to April 30, with the aim of negotiating a new transaction and reaching an agreement on key commercial terms.
If the parties are able to conclude a deal successfully, the final completion date will automatically be further extended to September 30, during which time the parties will have to formalise a written agreement. If the parties are unable to enter into an initial agreement on or before April 30, the deal will lapse.
Since finalising the earn-in agreement, Orion has advanced exploration programs on the Jacomynspan Project, with expenditure held in a shareholder loan account.
The company is now entitled to a total interest of 50% in the Jacomynspan Project, subject to some regulatory approvals.
Orion is the manager and operator of the joint venture. The company's earn-in is held via its wholly-owned subsidiary, Areachap Investments 3 BV, and its South African subsidiary, Area Metals Holdings No 3 Ltd.
About the Jacomynspan Project
The Jacomynspan Project, situated on the Namaqua and Disawell companies’ mining and prospecting rights, contains a JORC-compliant, intrusive-hosted, sulphide nickel-copper-platinum group metal resource.
This stands at 6.8 million tonnes of ore, comprising 39,000 tonnes of nickel, 22,000 tonnes of copper and 1,800 tonnes of cobalt, drilled between 1971 and 2012.
The mineral resource remains open along strike and down-dip, presenting a compelling exploration opportunity.