Orion Minerals secures final tranche of Fengli funding

Monday 20th April 2009

Orion Minerals Group, the NZAX-listed company with an iron ore mining concession in Chile, gained the final payment from its Chinese investor Fengli Group, enabling it to begin development.

Fengli, a steel processing and distribution company, made the US$8 million payment, bringing capital raised from the group to US$12.5 million. The company is issuing 100 million OMG shares at 12.5 US cents apiece with Fengli as its cornerstone investor and business partner.

Production and shipments will begin later than the third-quarter start date initially envisaged, because of the “unprecedented and unexpected reductions in the level and pricing of the global iron ore trade since this year commenced,” OMG said in a statement today.

OMG was created from a shell company set up as a low-cost way to list on the New Zealand stock exchange. It acquired Chile’s Minera Varry S.A for about US$13.5 million of cash and the issue of shares and options and changed its name to Orion.

The company is undertaking pre-operating mine development at its mining concession and finalizing arrangements for the shipment of ore through ports in Chile, it said today.

Fengli has close relationships with the major Chinese steel mills and extensive global trading and shipping businesses, according to OMG’s statement.

OMG shares trade infrequently and were last at 24 cents on March 17.

Businesswire.co.nz

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