Name of the Project
Prieska zinc/copper project.

Location
Northern Cape, South Africa.

Project Owner/s
Orion Minerals.

Project Description
The project aims to establish new mining operations at the Prieska copper mine, which has been closed since 1991.

A scoping study, released in December 2018, has confirmed the potential for the Prieska project to become a significant near-term, low-cost, zinc and copper concentrate producer while laying the foundations for future opportunities.

Phase 1 excludes any openpit mining and historical pillar extraction, and does not exhaust all known deposit extensions.

The study envisages a 2.4-million-tonne-a-year operation, producing about 70 000 t/y to 80 000 t/y of zinc and 22 000 t/y of copper concentrates.

The project is estimated to have an initial mine life of ten years.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 12.5% discount rate, of between A$400-million and A$440-million, and an internal rate of return of 38%, with a payback of less than three years from first production.

Capital Expenditure
Between A$300-million and A$330-million will be required to complete the project.

Planned Start/End Date
Project construction is expected to start in the fourth quarter of 2019, with production expected to start in 2021.

Latest Developments
Orion Minerals has established community and employee trusts for its Prieska project to meet the ownership structure requirements set out in Mining Charter III.

The Master of the High Court confirmed the registration of a community and an employee trust on May 29.

The company has assured shareholders that the trusts will follow a transparent governance framework, ensuring that no faction of the community is able to misappropriate and misdirect the shares in future mine profits.

The shares issued to these trusts will be nontransferable, protecting the beneficiaries from any risk of being disowned.

The trusts will each become 5% equity owners in the mine and, therefore, be eligible for 5% of future dividends.

The equity ownership costs and contributions on behalf of these trusts will be recovered from the future cash flow of the mine.

Additionally, the community and employees will have full proportionate shareholder voting rights in the affairs of the company that owns the mine.

The trusts will complement the 20% full contributing equity ownership in the Prieska project that is held by black economic-empowerment entrepreneurs.

Orion has further committed to the establishment and maintenance of a stakeholder engagement forum, which will ensure that the interests of the community and other stakeholders are tabled and considered in the business affairs of the company and the mine.

The forum will also provide a structured channel for continued communication of project progress by management.

The forum will consist of ten community members, four representatives of local authorities (such as the municipality, police and Department of Social Development), two shareholder representatives, two employees and two representatives of Orion management.

Meanwhile, the project’s bankable feasibility study is expected to be completed by the end of this month.

Key Contracts and Suppliers
Orion Mining, DRA Projects, Fraser McGill, METC Engineering, Precision Capital Development Services, Bluhm Burton Engineering, METS South Africa, ABS Africa, Z* Star Mineral Resource Consultants and the MSA Group (scoping study).

On Budget and on Time?
Too early to state.

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