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
The project will initially comprise 1 000 employees. The multiplier effect will put an additional 3 000 people into employment.

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
Orion Minerals CEO Errol Smart is pleased with the granting of the final mining right – the final regulatory hurdle – for the Prieska copper/zinc resource, which includes exploration rights.

There has been more than R450-million (A$36-million) in foreign direct investment to reach this stage and the project is now poised to bring in a further investment of R5.4-billion (A$432-million) over the next three years as Orion constructs the mine.

Smart sees this as just the start of Orion’s campaign in the region, with the company holding more than 3 200 km² of prospecting and mining rights in the Areachap Belt, in the Namaqualand region of the Northern Cape.

Mine construction can start once funding is secured, with concentrate production scheduled to start 33 months later.

A project execution strategy has been formulated and discussions with key service providers are well advanced.

The banking finance is expected to be two-thirds South African and one-third from offshore, and the equity capital from South African and foreign investors.

The first sod is expected to be turned in the first quarter of next year.

The Vardocube right covers 27% of the ore included in the BFS and follows the granting of environmental authorisation. The Vardocube right and the water-use licence granted earlier in August constitute the key approvals required to operate the Prieska mine.

Key Contracts and Suppliers
Companies involved in the BFS include 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.