ASX- and JSE-listed Orion Minerals’ shareholder Ratel Growth, of which former Orion director Thomas Borman is the controlling shareholder, has provided Orion an unsecured $2‑million loan facility to progress the development of the Prieska copper/zinc mine and Okiep copper project, both in the Northern Cape, and to support Orion’s ongoing working capital requirements.

Under the terms of the loan facility, Orion will initially receive the full $2-million in funding. Interest on the loan will accrue at 12% a year and will be added to the loan balance rather than paid in cash as it accrues.

All amounts owing under the facility, including the principal amount, accrued interest and any further capitalised interest, will automatically offset against the cost of new Orion shares to be issued to Ratel if the company completes a capital raising on or before the repayment date of August 31.

If Orion does not conduct a capital raising by August 31, Ratel has the right to convert the outstanding balance of the loan into ordinary Orion shares. The conversion price is set at the volume‑weighted average price of Orion shares on the ASX over the ten trading days immediately before Ratel issues a conversion notice.

In the event that Orion neither raises capital nor receives a conversion notice from Ratel by the repayment date, or if shareholder approval is required for the fundraising or share issue and approval is not secured by the later of the repayment date or specified approval deadlines, Orion must repay the outstanding balance in cash within ten business days of that later date.

The facility is unsecured and does not require Orion to grant any collateral.

Orion has committed to customary undertakings that restrict additional borrowings, limit security grants, ensure compliance with applicable laws and govern operational practices.

Both Orion and Ratel Growth have provided the usual warranties that accompany a loan and share conversion transaction of this kind.