Orion Minerals has a new team and is on the verge of starting development of its brownfields Prieska copper-zinc project in South Africa.

Prieska has resources of 370,000 tonnes of copper and 1.12 million tonnes of zinc and reserves of 164,000t of copper and 458,000t of zinc.

The March definitive feasibility study outlined a two-phase operation over 13.2 years to produce 22,000t of copper and 65,000tpa of zinc per annum at all-in-sustaining costs of US$2,359 per tonne or US$1.08 per pound of copper, net of by-product credits.

Based on a copper price of US$4.30/lb, the study returned a post-tax net present value of A$568 million and internal rate of return of 26%.

Since the release of the DFS, Orion has appointed Tony Lennox as managing director to drive the development of Prieska.

“He’s excellent – he’s worked and developed and operated large underground mines for decades,” Orion non-executive chairman Denis Waddell said this week.

Lennox ran South African producer Palabora Mining Company and since his appointment, has been recruiting some of his former colleagues, including Johan van Dyk, who was appointed as project director last week.

“Overall, there’s a lot of expertise that Tony’s brought to the table,” Waddell said.

Funding falling into place

The real turning point for Orion came last month when it announced the signing of a non-binding term sheet with Glencore for financing of US$200-250 million and offtake for Prieska.

“We had multiple parties – big players – wanting the concentrates,” Waddell said.

“Prieska has got a history of very high-quality separate zinc and copper concentrates, with very few deleterious elements in them… so that was what attracted the interest of a number of players. In the end, Glencore put forward a very competitive bid.”

Due diligence is advancing, and Orion is hoping to be able to draw down the first tranche of US$40 million in the next two months to fund the development of the A$49 million, phase one “Uppers” development.

The Uppers development is based on mining near-surface supergene sulphide ore, which is accessible from an existing decline.

“We’ll be producing concentrates within 13 months of starting, so assuming we start in late November/December, we’ll be delivering concentrates in December 2026,” Waddell said.

Orion’s plan is to build a small plant that will run for 4-5 years to process ore from the Uppers, and while that’s operating and generating cashflow, the company will continue to de-water the Phase 2 “Deeps” mine development and build a 2.4Mtpa plant to support the longer-term mining operation.

“And the great thing is, the Phase 1 Uppers development gives us a good 2-3 years to get, as Tony terms it, match-fit for the for the big play, and so it’ll give us the opportunity to have a very sensible ramp-up from 20,000t a month to 200,000t a month.”

Orion also has funding in place from streamer Triple Flag Precious Metals, as well as the support of the Industrial Development Corporation and the South African government.

To fund it through the due diligence phase, Orion this week launched a A$5 million capital raising, subsequently upsizing it to A$7.7 million due to strong demand from investors.

Further upside

Waddell said the exploration upside at Prieska was immense.

The company has drilled 85,000m of diamond core and hit mineralisation in every hole.

“We stopped drilling after that, simply because it was so expensive drilling from surface, but as we de-water, there’s a lot of drill drives already in position as we get deeper, so we’ll be drilling out the rest of the inferred resources into reserves,” Waddell said.

The southeastern extension of the mine has to date returned the widest and highest-grade intercepts.

“We did downhole EM on that and there’s a bloody big conductor sitting there, so this thing’s still wide open, along strike to the east and west, up-dip,” Waddell said.

“There’s a footwall lode we’ve intersected so there’s going to be many, many years of mine life added, but we’ll just fill it out and extend it as we get deeper.”

The company also has the fully permitted Okiep project in South Africa, another brownfields site that has produced more than 2Mt of copper.

The focus there is to convert the inferred resources into higher categories.

“Okiep’s got massive upside for us, but we’re just going to run that in the background,” Waddell said.

“We’ve got a separate team doing optimisation studies and rejigging that, so that’ll be in the pipeline, but the focus is well and truly Prieska.”

The copper market is getting tighter with supply disruptions at major mines including Kamoa-Kakula and Grasberg.

Waddell said it was a good time to be developing a copper mine.

“We’re definitely on the radar now with people saying, ‘hang on, there’s not many companies around with two fully permitted projects’,” he said.

“And it’s all about funding. If you’re funded, it’s all going to happen, so that’s all starting to fall into place and that’s what we’ve needed all this time.”