Name of the Project
Prieska copper/zinc project.

Location
Northern Cape, South Africa.

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

Project Description
An updated bankable feasibility study- (BFS-) 20 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. It is planned that a combination of longhole open stoping with fill and drift-and-fill mining methods will 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 is investigating the potential to bring forward the start of production at the Prieska project – the early production plan.

Orion has said that the new plan brings forward revenue generation and potentially reduces the upfront external peak funding requirements by phasing the mine build while retaining the option to scale up to the full-scale BFS-20 project as sufficient funding becomes available.

Leveraging off the information gathered, and material assumptions made in BFS-20, and supplemented by additional information obtained from recent drilling campaigns and a planned trial mining exercise, Orion says that the early production plan will comprise:

a revised mine sequence to extract the mine’s crown pillar. Mining the crown pillar upfront from underground access offers the potential advantage of earlier concentrate production and allows for dewatering to be undertaken at lower pumping rates and concurrent with early revenue generation;

the potential opportunistic extraction of the mineralised pillars left behind from previous mining and located above the accumulated water level.

dewatering of the underground workings using a modular configuration, with the first modules being commissioned in the second quarter of 2023, at one-third of the full-scale pumping rate proposed in the BFS-20 plan and ahead of the project being fully funded for full-scale construction; and

extraction of the Deeps sulphide deposit, below the previously mined area, as the future expansion phase.

Orion is planning to proceed with trial mining as early as the second quarter of 2023, first targeting the +105 Level Crown Pillar using underground mining methods and then developing into the remnant pillars.

While preparations for early dewatering are already under way, the whole pumping and water discharge system was planned to be commissioned by March 2023. The early production plan BFS could then be ready in 2023, Orion says in its interim financial report for the year ended December 31, 2022, paving the way for securing project development funding and a final investment decision.

In March this year, Orion Minerals unveiled plans to raise up to A$13-million in a two-tranche share placement to sophisticated and professional investors.

Orion told shareholders that the share placement had been cornerstoned by privately owned mining group Clover Alloys, which had subscribed for 440-million shares, or A$6.7-million worth of shares. The placement is also being strongly supported by existing shareholder Delphi Group and Tembo Capital.

The A$13-million placement, together with other funding sources already announced, including the $87-million funding package from Triple Flag Precious Metals and the $250-million funding facilities secured from the Industrial Development Corporation, comprised a strategic funding package that will position Orion to become a rapidly growing supplier of future-facing metals to global markets at a time when demand for these metals is anticipated to surge as a result of global decarbonisation efforts.

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.