Name of the Project
Prieska Copper Zinc Mine (PCZM).

Location
Northern Cape, South Africa.

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

Project Description
The mine which last operated in 1991 has a Joint Ore Reserves Committee- (Jorc-) compliant resource of 31-million tonnes at 1.2% copper and 3.6% zinc.

The 2020 bankable feasibility study (BFS 2020) executed by Orion confirmed the potential of Prieska to underpin a significant near-term, low-cost, copper/zinc development project, with exceptional opportunities for future growth.

BFS 2020 focused on the proposed development of a new 2.4-million-tonne-a-year copper/zinc mining operation at the brownfield project. The study focused on Jorc resources to a depth of 1350 m, down-dip of the historic mining that extracted 46-million tonnes down to about 900 m.

An optimised and updated BFS is currently being finalised and will be published in the third quarter of 2024. This study considers early production from high-grade near-surface Jorc resources at 40 000 t a month while preparing the deeps ore for extraction at 200 000 t a month from the fifth year of operation.

Underground mining methods are planned to be used in conjunction with conventional froth-flotation concentration to produce differentiated copper and zinc concentrates for export.

Mechanised ramp development remaining from the previous mining operations allows for early access to underground production mining areas. 
A combination of longhole open stoping, with drift-and-fill mining, supported with cemented backfill, is envisioned.

Peak production is estimated at 23 000 t/y of copper and 88 000 t/y of zinc.

The life-of-mine is expected to be 16 years from current Jorc resources with expectations of extensions of the orebody providing potential for 30% to 50% upside.

The mine is fully permitted.

Potential Job Creation
About 200 to 300 jobs are expected to be created during the early mining phase and about 800 at full production.

Net Present Value/Internal Rate of Return
The BFS20 study showed a pretax net present value, at an 8% discount rate, of A$779-million, and an internal rate of return of 39%. Payback from first production, which was expected in the thirty-third month was estimated at 2.4 years. 

The current optimised study has focused on the addition of early production from the eighteenth month, which is expected to reduce the peak external funding requirement and also to improve the project’s financial returns.

Capital Expenditure
Market intelligence firm S2 Research, which follow the project and company announcements closely, noted in May 2022 that it expected the revised peak funding requirement for the Prieska project to decrease to R2.25-billion. This was expected to reduce the funding risk of the project.

Planned Start/End Date
The mine is undertaking trial mining. Construction of a 40 000 t/y concentrator plant and starter tailings facility is planned for 2025, with first concentrate production targeted for early 2026, market conditions permitting.

Latest Developments.
Orion Minerals has provided a copy of a share purchase plan (SPP) offer booklet and application form, which is being dispatched to eligible shareholders, to raise up to about R60-million. The company plans to issue up to 333.33-million SPP shares at 18c a share.

The SPP opened on July 5 and is expected to close on July 23. Eligible shareholders can apply for parcels of new shares ranging from at least R2 000 to a maximum of R365 000, without incurring brokerage or transaction costs.

The issue price represents a 1.7% discount to the volume-weighted average price (VWAP) of the company's shares on the ASX, and a 16.1% discount to the VWAP on the JSE over the five trading days preceding the offer announcement date. It also reflects a 15% discount to the combined VWAP of the company's shares on the ASX and JSE over the ten trading days before the announcement.

All SPP shares will be quoted on either the ASX or JSE for South African eligible shareholders and will rank equally with other fully paid ordinary shares in issue.

This offer is available to eligible shareholders who have a registered address in Australia, New Zealand, South Africa, Germany, the Netherlands, the Jersey Channel Islands, the UK, Mauritius and Singapore, and who held Orion shares as of 19:00 (Melbourne time) on June 28.

The SPP enables eligible shareholders to participate in the capital raising at the same offer price as the shares issued under the placement. 

The funds raised from the placement and SPP will be primarily used to develop the Prieska copper/zinc mine, including mine dewatering, access development, concentrator plant and tailings storage facility procurement and construction, general operational-readiness works and uses.

Key Contracts, Suppliers and Consultants
Fraser McGill Mining & Minerals Advisory; METC Engineering; Gariep Mining and Exploration Services; Patterson and Cooke; Power Plant Electrical Technologies; Prysm; Professional Cost Consultants; Z Star Mineral Resource Consultants; P2 Mining a division of Newrak (trial underground mining contract); FlowCentric; EcoElementum; Sasol ENAEX; Solar Mining Services; Aquaplex, Partzone; Quebar; and UMS Shaft Sinkers.

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