Orion Minerals Faces Tight Cash Flow, Plans $5.8M Capital Raise Post-June Quarter

Quarterly Cash Flow Overview

Orion Minerals Ltd has disclosed its June 2025 quarterly cash flow report, revealing a challenging liquidity position. The company recorded net cash outflows of $2.475 million from operating activities and $1.189 million from investing activities during the quarter. These outflows have drained cash reserves to a mere $208,000 by quarter-end, highlighting the tight financial conditions the company currently faces.

Despite these pressures, Orion's financing activities provided a partial offset, with $2.4 million raised during the quarter, primarily through loan facilities. However, the total available funding at quarter-end stood at just $308,000, equating to less than one-tenth of a quarter's worth of operating and investing cash outflows combined.

Loan Facilities and Funding Arrangements

Orion's funding structure is complex, featuring multiple loan facilities. Notably, the company has drawn down a $2 million unsecured convertible loan from Ratel Growth Pty Ltd, controlled by a former director, with a 12% interest rate. Additionally, a $0.5 million unsecured loan from Tarney Holdings, linked to Orion's chairman, carries a 10% interest rate. Both loans were fully or partially drawn at quarter-end and have since been converted into equity post-quarter, subject to shareholder approval.

Further, Orion benefits from significant funding from the Industrial Development Corporation of South Africa (IDC), including a $21.7 million secured convertible loan facility supporting pre-development activities at the Prieska Copper Zinc Mine. The company also has a $10 million early funding arrangement with Triple Flag, secured against future mineral revenue, which was fully drawn by quarter-end.

Operational Context and Strategic Outlook

Orion recently completed feasibility studies for its key projects, including the Prieska Copper Zinc Mine and the Okiep Copper Project. These studies mark a critical milestone, but the company acknowledges the need to carefully manage cash flows while advancing project development. To this end, Orion has reduced discretionary expenditures and is actively pursuing capital raising initiatives.

Post-quarter, Orion announced a $5.8 million capital raising comprising a $3.3 million share placement and approximately $2.6 million in loan conversions. Additionally, a share purchase plan aiming to raise up to $4 million was launched in mid-July and is expected to close in early August. These measures are intended to bolster liquidity and enable the company to meet its operational and strategic objectives.

Looking Ahead

While Orion's immediate cash position is precarious, the company expresses confidence that the planned capital raising and loan conversions will provide sufficient funding to continue operations and progress its mining projects. Investors will be watching closely to see how these initiatives unfold and whether Orion can navigate its current financial constraints to unlock value from its South African assets.