Name of the Project
Prieska copper/zinc project.

Location
Northern Cape, South Africa.

Project Owner/s
Diversified metal explorer and developer Orion Minerals.

Project Description
An updated bankable feasibility study (BFS) has confirmed the potential of Prieska to underpin a significant near-term, low-cost, copper/zinc development project, with exceptional opportunities for future growth.

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 (LoM) 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 the early mining of high-grade zones in the mining sequencing,
• adopting 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 are planned to be used, supported with paste backfill.

Potential Job Creation
Not stated.

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 increased from A$378-million in the 2019 BFS to A$413-million.

Planned Start/End Date
Orion Minerals is targeting production startup in 2024, market conditions permitting.

Latest Developments
Orion Minerals has entered into a nonbinding termsheet for $87-million in funding to advance the development of its Prieska copper/zinc mine, and has secured an exclusivity agreement to develop a specialist battery product refining facility in the Northern Cape.

The company announced on May 9 that it had negotiated the potential funding package with Canadian streaming and royalty finance company Triple Flag Precious Metals, and is now advancing towards a definitive agreement targeted for the third quarter of 2022.

It is anticipated that $80-million in stream funding will be advanced against the delivery of 84% of future gold and silver by-product production, with Orion also to receive payments of 10% of the delivered precious metal value at spot gold and silver prices at the time of delivery.

The stream funding is conditional on the mine development being fully funded, finalisation of an executable mine plan to Triple Flag’s satisfaction and, if required, South African regulatory approvals.

An additional $7-million in funding will be advanced against calculated payments equal to 0.8% of gross revenue from future mineral sales, conditional on Orion’s securing an additional A$20-million in funding for the start of mine dewatering and, if required, South African regulatory approvals.

Meanwhile, Orion has taken steps to realise its strategy of creating a fully integrated base metals mining and processing business, entering into a termsheet to acquire a cornerstone interest in a future base metal refining facility in the Northern Cape.

Under the termsheet, Stratega Metals will undertake a technical due diligence for the use of carbo-chloro metal vapour extraction technology (CCMVT) for base metal refining of polymetallic concentrate produced from Orion’s projects.

The CCMVT process is derived from the modification of well-established refining technology used at refineries such as Vale’s Sudbury refinery, in Canada; the Norilsk Nickel refinery, in Russia; and Jinchaun Metals, in China.

The key reaction in CCMVT uses carbonyl (carbon monoxide), which is harvested from air and recycled within a sealed, pressurised reactor vessel and circuit then feeding into distillation vessels to recover separated refined carbonyl metal powders.

During this 90-day exclusivity period, Orion is entitled to conduct amenability testwork and due diligence, during which Stratega and Orion may enter into a comprehensive earn-in agreement. Orion may earn a 75% ownership in Stratega, by funding the establishment of a bespoke testwork facility and demonstration plant, to be located at the Prieska mine site.

Key Contracts, Suppliers and Consultants
Companies involved in the BFS included 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.