Orion Gold NL 29 September 2011 $1.5 million Loan Facility Orion Gold NL ( ORN) is pleased to announce that it has finalised a $1.5 million loan agreement, providing the Company with funding to enable it to continue the diamond drilling program that has commenced to test highly ranked targets at New Dawn Toombon, Longfellows and Happy Go Lucky. The Company has entered into a loan agreement for up to $1.5 million (Facility) with Silja Investment Limited (Silja), the Companys major shareholder. Under the terms of the Facility, Silja has committed to convert cash drawn down under the Facility to shares, as part of a possible future capital raising subject to various conditions including Shareholder approval where required by law, including the ASX listing rules The capital raising including Siljas allocation being a minimum of $1.5 million The capital raising issue price of shares not being less than 1 cent per share and Siljas participation in the capital raising being an amount equivalent to Siljas proportionate shareholding in the Company (approximately 27%). Shares will be issued to Silja on the same terms as shares issued to other subscribers as part of a capital raising. The Facility expires on 30 June 2013, and the Company would be required to repay the Facility in cash on that date to the extent the loan balance has not been converted into shares by then. Under the terms of the Facility, a capital raising fee would be payable by the Company to Silja where it subscribes for its share allocation in a capital raising. The fee is calculated by multiplying the amount subscribed for by Silja under the terms of the Facility by the percentage commission payable to a broker or underwriter as part of the capital raising.
No facility fee is payable by the Company to Silja. Silja has a fixed and floating charge over the assets of the Company. Interest will be capitalised under the Facility at a margin of 1.5% over the 90day dealers bill rate (reset every 90 days). In order to draw on the Facility, the Company must meet certain conditions precedent including the continued employment of key personnel.
To date, the Company has not drawn on the Facility. Under the terms of the Facility, Siljas commitment to participate in a future capital raising as outlined above is in place irrespective of whether or not the Company utilises the Facility. Contact Company enquiries Suite 302 Level 3, 488 Bourke Street Denis Waddell Executive Chairman Melbourne VIC 3000 Martin Bouwmeester General ManagerCorporate T 61 3 8080 7170 F 61 3 8080 7174 E infooriongold.com.au Exploration Update The Company is also pleased to announce that the diamond drilling program has commenced to test highly ranked targets at New Dawn Toombon, Longfellows and Happy Go Lucky. The initial holes of the drill program are underway and are testing targets at New Dawn Toombon (Orion 85%) which is located on the recently reinterpreted Cohens trend. The Cohens trend hosts the major historical mines in the WalhallaWoods Point goldfield, with the recorded gold production from mines located along the Cohens trend totalling approximately 4 million ounces (see figure 1). The reinterpretation of the Cohens trend is an outcome of the Companys new structural model. Based on this model, Orion regards the New Dawn Toombon area as particularly prospective, as the historic workings are interpreted to be situated in the same stratigraphy and structural setting as the main Cohens Reef at Walhalla which produced 1.5 million ounces of gold.
Deposits in the New Dawn Toombon area are also interpreted to be similar in style to the mineralisation at Cohens Reef. The area has been subject to very little modern exploration and almost no drilling. Orions 3D model of the New Dawn workings, based upon the available historic data, provides targets for a series of parallel reefs and for southerly plunging intersection lodes (shoots). The current drill program totals 2,400 metres of diamond drilling with the first three holes (each of approximately 400 metres in length) to be drilled at New Dawn. Following the drill program at New Dawn, the Company will drill highly ranked targets at Longfellows and Happy Go Lucky (see figure 2). Continued review of the Companys outlying tenements utilising recent developments in interpretation of mineralisation controls, has led to a series of further, new and encouraging prospects being designated for field testing and possible drilling. The detailed study on the extensive historical data for the Cohens Reef deposit continues.
It is anticipated that targets will be identified for bulk tonnage, low grade and high grade shoots at Cohens. Also it is expected that regional targets will be identified resulting from this improved interpretation and understanding. The Company is expecting to be able to provide a more detailed update on the outcomes of the study in the coming weeks. Denis Waddell Executive Chairman.
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$1.5 million Loan Facility