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
Market intelligence firm S2 Research noted in May 2022 that the peak funding requirement of Orion Minerals’ Prieska project had fallen from R2.4-billion to R2.25-billion. This has reduced the funding risk of the project.

In a prior note, S2 anticipated that Orion would need R2.7-billion to develop and optimise the Prieska mine.

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

Latest Developments
Orion Minerals has signed definitive agreements for an $87-million funding package with Triple Flag Precious Metals Corp to advance its Prieska copper/zinc mine.

The funding package comprises an $80-million precious metals stream, which will be drawn down in tranches alongside other bank or third-party funding during the mine development. Orion will also receive payments of 10% of the value of delivered precious metal paid at spot pricing at the time of delivery.

The proposed stream rates for gold and silver to be delivered under the stream agreements are 84% of payable gold, until 94 300 oz of gold is delivered, and 84% of payable silver, until 5.71-million ounces of silver is delivered, with each stream rate reducing to 50% after the respective milestone.

The precious metals stream is conditional on the mine development being fully funded, finalisation of an executable mine plan to Triple Flag's satisfaction, South African regulatory approvals and fulfilment of conditions precedent standard for such arrangements.

The agreement also includes a $7-million funding arrangement, the drawdown of which is conditional on Orion securing an additional A$20-million in funding to execute the agreed work focused on dewatering the project and on the early mining works bankable feasibility study, as well as South African regulatory approvals and fulfilment of other standard conditions precedent.

Triple Flag has confirmed that drawdown of the IDC R250-million convertible loan will be sufficient for this A$20-million funding condition to be satisfied. Drawdown of the $7-million funding arrangement will be in tranches and will pro rata match the drawdown requests that Orion will make under the IDC convertible loan.

Meanwhile, the operations team at Prieska mine has already made significant progress in preparing Prieska for development. This includes establishing underground dams and pumpstations and preparing development at the +105 trial mining area to allow for the safe commencement of drilling and blasting.

The trial mining of high-grade remnant ore in the upper levels of the mine is key to Orion completing a revised feasibility study by mid-2023, paving the way for an early startup of production and cash flow while the mine is dewatered over a three-year period.

This will provide Orion with a staged pathway to steadily ramp up production to eventually reach 2.4-million tonnes a year milled, with ore sourced from the dewatered Prieska Deeps area.

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.