JOHANNESBURG (miningweekly.com) – Sydney- and Johannesburg-listed Orion Minerals will be producing concentrate at its flagship Prieska Copper Zinc Mine by Christmas next year, says new highly experienced Orion CEO Tony Lennox, who is also leading the pulling together of the company’s tenements in the Okiep region.

“We're now very clear on transitioning from a developer explorer to a producer. We’ll do so in a considered and detailed manner, but rest assured, we’ll be producing concentrate by the end of next year,” Lennox emphasised to Mining Weekly in a Zoom interview. (Also watch the attached Creamer Media video.)

The permitted Prieska, last operated in 1991, has a compliant resource of 31-million tonnes at 1.2% copper and 3.6% zinc. A definitive feasibility study (DFS) published in March confirmed the potential to develop a long-life operation through a two-phase development strategy.

South Africa’s State-owned Industrial Development Corporation (IDC) holds 43.75% of Okiep with a DFS confirming its Flat Mines project's ability to deliver a safe, modern, fully mechanised copper mine. 

“Firstly, we’re very pleased to have such outstanding, iconic assets from the South African mining history,” Lennox commented.

Prieska is one of the world’s volcanogenic massive sulphide base metal deposits, with a recorded historical production of more than 430 000 t of copper and a million tons of zinc from 46.8-million tons of sulphide ore milled, and in the 1870s, the small Northern Cape town of Okiep was ranked as hosting the richest copper mine in the world, in close association with Nababeep.

“We're pleased to be able to breathe new life into Prieska and to pull together, after many years, the large tenements we've got in the Okiep region. What are our plans? We look to be producing concentrate out of Prieska by Christmas next year, and the critical aspect we have underway at the moment is our funding that will allow us to go into execution.”

Mining Weekly: What is the latest on funding in order to become a copper producer?

Lennox: The latest is that we are currently in confidential discussions with offtake funders, plural. We have the benefit of working hand-in-hand with the IDC, and that is an excellent organisation to be in association with, and we also have in place funding from Triple Flag Precious Metals out of Canada.

Tell us about Orion’s role as an emerging Northern Cape producer?

It’s a pleasure to be part of the Northern Cape. I have had a history in South Africa and in Mozambique and to be now turning my attention to the Northern Cape and steering Orion to be a substantial organisation in Northern Cape is extremely pleasing. The social uplift agenda that we will provide for Prieska, the Okiep Springbok region and Nababeep, is quite important to us. The approach we have after many years of concession or tenement consolidation has been that with the release of our DFS in March, we are now focused very, very clearly on delivering concentrate from the Upper portion of the Prieska deposit. All of our effort is to convert from an exploration developer to a concentrate producer. When we have the Prieska Uppers running, we'll be looking to ensure there’s a smooth transition into the mother lode of Prieska, the Deeps, and in parallel with that, will be finalising optimisation around the Okiep region. At Okiep, we've pulled together a DFS, where you take orebodies that are disassociated, and you pull them all back to a single central processing complex. We’re finalising the detail around the respective orebodies to ensure that there's good value for Orion, good value for our shareholders, and good value for the communities.

SHARE PURCHASE PLAN

Funds raised from the Orion share purchase plan, which closes on 5 August, will be used to support early development of the Uppers at Prieska and advanced optimisation studies plus site activities at Okiep.

Announced on 8 July was the securing of firm commitments for a placement of new paid ordinary shares to professional investors and agreement to convert outstanding loan amounts to equity for R67-million. Shares issued under placement and loan conversions at 13c for 522-million shares.

Tarney Holdings – an entity associated with Orion chairperson Denis Waddell – has also agreed to subscribe for about A$500 000 worth of shares – subject to shareholder approval – at a deemed issue price to convert amounts outstanding, including interest, under an unsecured loan agreement provided to Orion by Tarney Holdings in June.

In addition, long-term supportive shareholder Ratel Growth – a company of which previous director Thomas Borman is the controlling shareholder – has also agreed to subscribe for about A$2.1-million worth of shares at a deemed issue price to convert the total amount outstanding, including interest, under an unsecured loan agreement provided to Orion by Ratel Growth in April. 

Orion is on track to become a new generation base metals producer through the near-term Prieska mine and Okiep, and in the longer-term through Jacomynspan nickel/copper/cobalt/platinum-group-element project, all located in South Africa's well-endowed Northern Cape.