ASX- and JSE-listed Orion Minerals has in place a company-making strategy of developing multiple metal-producing hubs within South Africa’s Northern Cape, a richly endowed mineral province and a well-established mining jurisdiction, and it is making strong progress in terms of its production ambitions via its fast-track strategy.

Moreover, the company is well funded in its endeavours, with cash reserves of $11-million as at the end of the December quarter, together with funding arrangements that allow it to progress the development of its Prieska copper/zinc mine, including trial mining and processing of ore, mine dewatering and the completion of feasibility studies for its early production plan.

This is according to mining analyst and MineLife founding director Gavin Wendt, who writes in a recent Resource Bulletin published by MineLife that Orion remains firmly within its coverage portfolio.

The bulletin covers Orion’s transformation from explorer to a South Africa-focused base metals company that is developing three complementary production hubs in the Northern Cape.

Since MineLife’s coverage initiation, it points out, Orion has managed the transition from explorer to emerging producer through the acquisition and advancement of Prieska and its Okiep copper project.

The bulletin states that the transition to mine development and operation at the Prieska mine is well advanced, with installation of mine infrastructure, the start of trial mining and the onboarding of a skilled operating team.

Prieska is Orion’s flagship asset, having been mined for 20 years from 1971 until its closure in 1991, and where the company is currently undertaking an early production feasibility study that is targeting the staged ramp-up of operations and production.

Key inputs to this study include a trial mining programme and ongoing metallurgical test work, with the study due for completion in the middle of this year.

Orion is also advancing the development of a second production hub, initially based on the Flat Mines area at its Okiep project, while also conducting exploration programmes to increase the resource and reserve base to underpin a larger-scale, longer-term operation.

The bankable feasibility study here has been delayed to accommodate a drilling and metallurgical programme.

Following advice of the independent expert reviewers, Orion has completed planning for a twin drilling programme to verify historical data that underpinned the mineral resource estimates at the Flat Mines East and North orebodies.

This drilling programme will begin shortly, with the Flat Mines feasibility study now scheduled for completion by mid-2024.

During August 2023, Orion upgraded the measured, indicated and inferred mineral resources hosted within Flat Mine North, Flat Mine East and Flat Mine South deposits, to a total 9.3-million tonnes grading 1.3% copper for 130 000 t of contained copper.

Together with the existing mineral resources for the Flat Mines (Nababeep), the Jan Coetzee mine and the Nababeep Kloof mine, the total mineral resource at Okiep now comprises 12-million tonnes grading 1.4% copper for 160 000 t of contained copper.

Thirdly, Orion is advancing its Jacomynspan nickel/copper/cobalt/platinum group elements sulphide project, using metal vapour refining technology on metal sulphide concentrates as it aims to maximise metal recoveries to high-value products.

The company is continuing to review and update previous studies at Jacomynspan and is planning for a trial mining programme to support metallurgical test work programmes.

Laboratory scale test work to confirm amenability of the Jacomynspan concentrates to the Stratega-TCM Metal Vapour Refining Technology is progressing well, Wendt points out.

APPEALING PROSPECTS

The bulletin states that, owing to a global scarcity of shovel-ready base metal mining projects, Orion’s Northern Cape assets are especially significant, in particular its planned Prieska development, as it already has a 20-year history of production.

End-users will increasingly look to secure supplies of copper from advanced projects like Prieska, Wendt posits.

Orion has been focused on the development of the deep sulphide resource at Prieska, currently comprising 28.73-million tonnes at 1.2% copper and 3.8% zinc.

However, the company is now actively examining a fast-tracking of production at Prieska that could support production earlier than planned.

The bulletin highlights that, of primary significance to the fast-track strategy, is the shift towards the mining of openpit material rather than the deep sulphide resource, in combination with assessment of the exploitation of remnant pillars remaining from historical mining operations.

The company’s investigations are also assessing the merits of staggering the construction programmes, such that full-scale production is reached in phases, which would also ensure that peak funding requirements to achieve full production are significantly reduced.

In terms of the copper market, MineLife’s outlook for copper this year is one of “cautious optimism”.

Wendt says the likelihood of a price spike in copper is remote, even though market fundamentals are improving.

Instead, it predicts a gradual movement of investment funds back into the metal in terms of long positioning, should interest rate cuts be implemented, China demand levels continue to rise and inventory levels remain subdued.

It says that, in the longer term, a considerable issue for the copper market will be how the supply side keeps up with escalating demand from the alternative energy sector.