Orion MD Errol Smart.
JOHANNESBURG (miningweekly.com) – Sydney- and Johannesburg-listed Orion Minerals has agreed funding terms with South Africa’s State-owned Industrial Development Corporation (IDC) involving the advance of R250-million (A$22-million) as a senior secured, convertible debt facility to fund early works at Orion’s project at its flagship copper/zinc mine in the Northern Cape.
“This is a huge milestone for all our stakeholders,” an upbeat Orion MD Errol Smart said of the arrangement which will enable predevelopment work to get underway at the fully permitted Prieska copper/zinc mine.
The funding is particularly beneficial for the shareholders who have supported the company and the local communities that stand to benefit as this region-enhancing new mining project comes to life.
Orion, Agama Exploration and Mining Proprietary Limited – the wholly owned Agama subsidiary of Orion – and Prieska Copper Zinc Mine Pty – a majority-owned subsidiary of Orion – reached the non-binding term sheet accord, the proceeds from which will be applied to mine dewatering and trial mining operations to complete the mine’s previously announced early production plan to bankable feasibility accuracy.
The R250-million IDC funding package satisfies a key condition to the previously announced A$10-million Triple Flag early funding arrangement to support predevelopment, Orion stated in a release to Mining Weekly.
The combined predevelopment funding from the IDC and Triple Flag, now totals more than R350-million (A$32-million).
This will allow the commencement of dewatering at 500 m3 per hour from the Prieska underground mine workings.
“It will also provide funding for us to carry demonstration trial mining on the +105 crown pillar and selected remnant pillars available above the current water level,” added Smart.
Orion has now securing the IDC as project partner at Prieska and at its Okiep project hub, which is also in the Northern Cape.
IDC support has been pivotal to Orion’s efforts to unlock what the company described as high-quality base metal assets.
The trial mining phase and revised bankable feasibility study are expected to be completed in the third quarter of 2023, allowing project financing to proceed to supplement the $80-million Triple Flag stream financing announced in May 2022.
The R250-million sets the mine on its way to the facilitation the final investment decision for mine development, for which dewatering is critical in that it provides access to the main orebody. As the dewatering progresses, additional pillars will be exposed.
Orion and IDC anticipate executing the definitive agreements for the convertible loan before year-end, with the funding expected to be available for drawdown late this year.
Dewatering is well advanced, with underground storage dams and pump site construction completed and the shaft platform installed to facilitate pump installation.