Add the demerara sugar and water to a heavy rocks glass. Add the Angostura bitters and stir or muddle until the sugar is mostly dissolved, 15–20 seconds.
Pour in the aged rum, add the large ice cube, and stir until well-chilled and slightly diluted, 20–30 seconds.
Express the orange peel over the surface to release oils, rub it around the rim, then drop it into the glass or discard (garnish). Serve immediately.