Name of the Project
Prieska copper/zinc project.

Location
The project is located in the Northern Cape, in South Africa.

Project Owner/s
Orion Minerals.

Project Description
An updated bankable feasibility study (BFS) has confirmed the potential of the Prieska project to underpin a significant near-term, low-cost, copper/zinc development project with exceptional opportunities for future growth.

The project has total mineral resources of 30.49-million grading 1.2% copper and 3.7% zinc.

The updated BFS on the foundation phase of the project proposes the development of a new 2.4-million-tonne-a-year copper/zinc mining operation at the brownfield project.

Underground and surface mining methods are planned to be used in conjunction with conventional froth-flotation concentration to produce differentiated copper and zinc concentrates for export.

Peak production is estimated at 23 000 t/y of copper and 88 000 t/y of zinc.

The life-of-mine has been extended by two years from 9.7 years to 11.5 years.

Material changes in the updated BFS, compared with the 2019 BFS plan, include:

• reducing the mine dewatering timeline and supplementing the treatment of that water,
• incorporating additional mineral resources into the mining plan that will increase the mine life by two years,
• a more conservative timeline to ramp up to steady-state production,
• prioritising early mining of the high-grade zones in the mining sequencing,
• the adoption of semiautogenous grinding mills in the processing flowsheet,
• an owner-miner operating philosophy for underground mining,
• using an experienced contractor to operate the processing plan, and
• a change in the key operational infrastructure being supplied by third-party financing and in the supply of select key operational infrastructure.

The mining methods for the project remain unchanged, compared with those stated in the 2019 BFS. Tunnel development remaining from the previous mining operations allows for early access to underground production mining areas. A combination of longhole open stoping with fill and drift-and-fill mining methods, supported with paste backfill, is envisioned.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a net present value, at an 8% discount rate, of A$779-million, compared with A$574-million in the 2019 BFS, and an internal rate of return of 39%, compared with 38% in the 2019 BFS. Payback from first production is estimated at 2.4 years, a decrease of five months.

Capital Expenditure
Total startup capital, including contingency, has decreased from A$400-million in the 2019 BFS to A$373-million in the updated BFS.

Peak funding requirements have increased from A$378-million in the 2019 BFS to A$413-million.

Planned Start/End Date
Orion Minerals is targeting a production startup in 2024, market conditions permitting.

Latest Developments
A key water licence for the Prieska copper/zinc project has been granted.

Orion Minerals has said that the 20-year water-use licence was granted by the National Department of Water and Sanitation, and includes permission for mine dewatering to proceed, as well as wet tailing sand wastewater storage and management, and to use water for mixing mine waste for void back-filling.

“Many of the banks and potential strategic partners that we have been dealing with have flagged the outstanding licence as a major concern that could potentially hold up an investment decision,” Orion MD and CEO Errol Smart has said.

The outstanding licence has cleared the way for construction and development of the project to start.

Meanwhile, Orion Minerals has struck an agreement with South African institutional investor Anglo American sefa Mining Fund (AASMF) to extend the term of its R14.25-million loan facility from the end of July 2020 until the end of April 2021.

The original loan agreement was entered into in 2015 to fund further exploration and development of the Prieska copper/zinc project.

At the end of June this year, the balance of the loan facility amounted to R19-million, which included interest repayments.

Orion announced in March this year that it would postpone debt financing activities to develop the Prieska project, until global macroeconomic and market conditions stabilise.

On August 5, Orion Minerals requested a trading halt in its shares in anticipation of a proposed capital raising.

The company has requested two consecutive trading halts until the start of trade on August 10, or such earlier time as it makes an announcement to update the market about a potential capital raising.

The trading halt will allow Orion time to consider, plan and execute the capital raising.

Key Contracts and Suppliers
Companies involved in the BFS included: A&B Global Mining; ABS Africa; BPDT & Co; Bluhm Burton Engineering & Ventilation Consultants; Beulah Africa; Cart Investments; DRA Projects South Africa; Earth Science Solutions; Endeavour Financial Limited; Falcon and Hume Attorneys Inc; Fraser McGill Mining & Minerals Advisory; Knight Piésold; METC Engineering; Gariep Mining and Exploration Services; Mets Consulting South Africa; Patterson and Cooke; PCDS Consultants; Power Plant Electrical Technologies; Professional Cost Consultants; Promethium Carbon; Shift Innovations; SRK Consulting; Strategy4Good; The MSA Group; Turnkey Civil (International) Group; VBKom Engineering Consultants; Whittle Consulting and Z Star Mineral Resource Consultants.

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