THE BOURSE WHISPERER: Orion Gold (ASX: ORN) has received commitments (subject to formal legal documentation) to raise $4.25 million to underpin upcoming drilling programs at the company’s Fraser Range nickel-copper projects in Western Australia.
The funds will also be used to accelerate exploration at its Victorian and Queensland projects.
Orion boasted the capital raising is one of the largest to be undertaken in the junior exploration sector lately, saying it represents a positive outcome for the company considering current market conditions.
“This is a great result, which reflects the quality of our assets and the strong level of market interest in our upcoming exploration programs,” Orion Gold managing director and CEO Errol Smart said in the company’s announcement to the Australian Securities Exchange.
“I would like to thank all of the investors who are participating in the capital raising, including existing shareholders.
“We are very much looking forward to progressing exploration activities at all three of our key projects, including planned drilling programs in the Fraser Range.”
Orion Gold explained that it had decided to undertake the capital raising at an issue price of 10 cents per share – rather than the 12 cents per share it had announced earlier this month – with investors to be granted one option for each share issued.
The capital raising formed a key component of Orion’s recently announced agreement with companies controlled by prominent Australian prospector, and King of the Fraser Range region, Mark Creasy – through his Creasy Group – to acquire a ground position in the northern Fraser Range belt.
Tenements being acquired in the transaction and Orion’s existing
holdings in the Fraser Range Province. Source: Company announcement
The parties have now agreed to vary the terms of that agreement to reflect the revised terms of the capital raising.
Under the new agreement, Orion will acquire a 70 per cent interest in a portfolio of tenements covering an area of 2,628 square kilometres surrounding and contiguous with its Peninsula nickel-copper project, taking its combined land-holding to 3,559sqkm.
The Creasy Group will be paid 15.8 million Orion shares (previously 15 million shares) and 23 million Orion options (previously 18.5 million options).
This will result in the Creasy Group emerging with an approximate 12 per cent stake in Orion, on a fully-diluted basis, after completion of the proposed $4.25 million capital raising.