Name of the Project
Okiep copper project (OCP).

Location
Northern Cape, South Africa.

Project Owner/s
New Okiep Mining Company comprising Orion Minerals (56.25%) and the Industrial Development Corporation of South Africa, or IDC (43.75%).

Project Description
A scoping study completed in May 2021 has proposed a proof-of-concept-scale copper mining operation at the brownfield OCP, and has confirmed that the project’s deposits have the potential to be mined at low cost using openpit and underground mining methods.

The outcome of the scoping study, based on five initial deposits, supports the economic merit of developing a foundation-phase mining operation, while Orion conducts the required work and engineering studies to evaluate the potential to re-establish mining operations.

The life-of-mine for the proof-of-concept foundation phase is modelled for 12 years, during which concurrent exploration and mine expansion scenarios will be planned and potentially implemented.

The proposed foundation-scale mining operations could run at a design processing plant throughput of 780 000 t/y, resulting in 9 000 t/y of copper sold in marketable concentrates. This could potentially supplement the 23 000 t/y of copper production planned from Orion’s flagship Prieska copper/zinc project.

Only mineral resources from the Flat mines area of the greater Okiep Copper Complex are incorporated in the foundation-phase plan, leaving significant potential for future expansion scenarios to be considered.

Underground and surface mining methods will be used in conjunction with mineral processing using conventional froth-flotation concentration to produce the copper concentrates for export.

The proof-of-concept phase of the proposed operation targets the development of only those Okiep copper deposits for which Orion has verified and reported mineral resources during the early phase of the due diligence period. The milled production target comprises measured mineral resources of 33%, indicated mineral resources of 46% and inferred mineral resources of 21%.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 10% discount rate, of R1.9-billion and an internal rate of return of 44%, with a payback from first production of 3.25 years.

Capital Expenditure
Peak funding is estimated at R643-million.

Planned Start/End Date
First production is possible within 16 months from the start of construction.

Latest Developments
Orion Minerals has reached the final stages of its acquisition of a controlling interest in the project.

The IDC has now obtained in-house approvals and counter-signed the addendums to the agreements that will result in Orion’s acquiring the controlling interest in Okiep.

All the supplementary conditions to implement the first phase of the Okiep transaction have been fulfilled, including receipt of the relevant approvals from the Foreign Surveillance Department of the South African Reserve Bank and the South African Takeover Regulation Panel.

As a result, the Okiep transaction agreements have now become unconditional.

The first phase of the transaction will comprise R46-million, encompassing R11-million in cash and R35-million settled by Orion’s issuing fully paid ordinary shares.

Orion will seek shareholder approval of, besides other aspects, the ratification of the agreement to issue the consideration shares at a general meeting on May 23, 2024.

The IDC approval has been received for R43.75-million in funding for its proportional share of drilling and operating costs for the New Okiep Mining Flat Mines project.

In addition, a diamond drilling programme has started in the Flat Mines area of Okiep. Eleven diamond core drill holes have been planned, comprising five holes at Flat Mine East, four holes at Flat Mine South and two holes at Flat Mine North, totalling 5 800 m.

The programme has been designed to confirm historical drilling information and resultant interpretations, provide geotechnical information and provide additional drill core for confirmatory metallurgical testwork.

Orion MD and CEO Errol Smart has said that drilling is progressing well, with the next batch of assay results from this ongoing drill programme expected before the end of May 2024.

Key Contracts, Suppliers and Consultants
ALS Chemex (core sample analysis).

Contact Details for Project Information
Orion Minerals, tel +27 11 880 3159 or email info@orionminerals.com.au.