Name of the Project
Prieska copper/zinc project.

Location
Northern Cape, South Africa.

Project Owner/s
Orion Minerals.

Project Description
A bankable feasibility study (BFS) on the foundation phase of the Prieska project has confirmed the quality and scale of the project. The BFS evaluates the establishment of new mining operations at the Prieska copper mine, which has been closed since 1991.

The project has a maiden ore reserve of 13.62-million tonnes at 1.1% copper and 3.2% zinc for 143 000 t of contained copper and 433 000 t of contained zinc.

The BFS has also investigated the commercial viability of a mining plan for the foundation phase aimed at establishing mine infrastructure and operational capacity, which are intended to establish the platform for further mining of deposit extensions, and the exploration and mine development of neighbouring prospects.

According to the BFS, the foundation phase runs for 9.7 years of run-of-mine production at a design ore processing rate of 2.4-million tonnes a year. This phase targets the exploitation of those portions of the Prieska deposit that have been upgraded to indicated and inferred mineral resources from the first surface-based drilling campaign conducted from 2017 to 2018.

The production target comprises 65% probable ore reserves and 35% inferred mineral resources, with ore reserves predominating during the early stages of the mining plan. Underground and surface mining methods are planned to be used for the duration of the foundation phase, in conjunction with conventional froth-flotation concentration to produce differentiated copper and zinc concentrates for export.

Beyond the foundation phase, it is expected that mine-life extension will be underpinned by delineated mineral resources not yet incorporated into the mining plan, and known deposit extensions and existing pillars, which are expected to require low or no additional capital investment to extend the mine life. An estimated 9.7-million tonnes of indicated and inferred mineral resources, at grades of 1.1% copper and 3.6% zinc, remain outside the immediate mining plan, providing near-term potential to optimise mine plans to incorporate more of these resources into the foundation phase. Significant potential for nearby satellite deposits has also been identified.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at an 8% discount rate, of A$574-million and an internal rate of return of 38%, with a payback of 2.9 years from first production.

Capital Expenditure
The project has a peak funding requirement of A$378-million.

Planned Start/End Date
The production of first copper is scheduled to follow a two-year construction period.

Latest Developments
Orion Minerals has started the partnering and joint venture process for its Prieska project.

The company has appointed Macquarie Capital as financial advisers to run the formal partnering process, after receiving expressions of interest from third parties pertaining to the potential acquisition of, or subscription for, a significant project-level ownership interest in the project.

Orion believes that identifying and engaging with the right partner could help the company unlock the full potential of the deposit, and ultimately deliver an integrated funding and development package that will minimise dilution for shareholders while retaining significant exposure to the substantial cash flow that will be generated by a long-life base metal operation.

“We have already held discussions with a number of parties that could bring technical, financial, corporate and strategic expertise to the table. We are looking forward to engaging formally with these and other parties over the coming months to see if we can crystalise a transaction that would generate a positive outcome for all stakeholders and help to fast-track the development of a substantial new-generation African base metals mine,” Orion MD and CEO Errol Smart has said.

Ongoing value engineering and optimisation work is being undertaken, with the aim of completing that early in the next quarter. Orion is hoping to finalise the partnering transaction by the third quarter of 2020.

Meanwhile, the due date of Orion Minerals’ loan facility with Tembo Capital has been extended from January 25 to June 25.

Orion secured the $3.6-million convertible loan facility with Tembo Capital in 2019.

Orion has said that the term extension ensures that proceeds from the company’s recent capital raisings can be used to progress the redevelopment of the Prieska project.

Instead of a cash payment, Tembo may elect to receive the balance of the loan facility through the issue of Orion shares at $0.026 apiece.

At the end of December, the balance of the loan facility was $4.02-million, which includes capitalised interest and fees.

Key Contracts and Suppliers
DRA Projects South Africa; A&B Global Mining; ABS Africa; BPDT & Co; Bluhm Burton Engineering & Ventilation Consultants; Beulah Africa; Cart Investments; Earth Science Solutions; Endeavour Financial Limited; Falcon & Hume Attorneys; Fraser McGill Mining & Minerals Advisory; Knight Piésold; METC Engineering Consultants; Mets Consulting South Africa; Patterson & Cooke; PCDS Consultants; Power Plant Electrical Technologies; Professional Cost Consultants; Questco; Shift Innovations; Steffen, Robertson & Kirsten South Africa; The MSA Group; Turnkey Civil (International) Group; VBKom Engineering Consultants; Z Star Mineral Resource Consultants (BFS); and Byrnecut Offshore (underground mine development and production).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Orion Minerals, tel +27 11 880 3159 or email info@orionminerals.com.au.