The share placement agreement with IGO is at a price of 5 cents per share.
Critically, this is an important step in Orion’s base metal development strategy in South Africa.
The company recently upgraded the total resource for its Prieska Zinc-Copper Project in South Africa to 29.4 million tonnes containing 1,126,000 tonnes of zinc at 3.8% zinc and 365,000 tonnes of copper at 1.2% copper.
Orion is a leading ASX gainer, with shares up almost 40% to 5 cents, a new 12-month high, on volume of more than 13 million.
Providing a back story, the Prieska zinc-copper deposit is recorded as one of the world’s 30 largest volcanogenic massive sulphide ore (VMS) deposits.
Nickel projects in the highly prospective Areachap Belt
As per the new agreement, IGO has secured preferential rights to joint venture or purchase Orion’s nickel projects in the highly prospective Areachap Belt located in the Northern Cape, South Africa
If Orion wishes to assign its interest in any of its South African nickel projects to a third party, it must first offer to assign such interest to IGO on the same terms and conditions as the proposed terms and conditions of the assignment to the third party.
IGO’s preferential rights include Orion’s advanced Jacomynspan Nickel-Copper-Cobalt Project, where it revealed a resource estimate in March 2018.
The collaborative working relationship formed between Orion and IGO will also enhance Orion’s planned regional exploration programs within the highly prospective yet underexplored Areachap Belt.
READ: Orion Minerals has nearly 30mln tonnes of zinc ore in South Africa and significant private equity support
Orion managing director and chief executive officer Errol Smart said: “We are very pleased to cement a relationship with a strategic investor with the qualities of IGO.
“IGO’s Nova Bollinger Nickel and Jaguar Zinc-Copper mining operations in Western Australia have remarkable geological and engineering similarities to Orion’s advanced stage projects in the Areachap Belt in South Africa.
“In addition, the exploration models and methods that Orion has employed in the Areachap Belt are very similar to those being used by IGO in a similar geological terrain in the Fraser Range, Western Australia.
“Clearly, there are strong synergies between the companies and a meeting of minds between our technical teams.”