Orion outlines long healthy operation
21st December 2018
Resources Rising Stars
A scoping study into Orion Minerals’ Prieska zinc-copper project in South Africa has confirmed a “robust” first phase of operations (reports MiningNews).
The study outlined a 10-year, 2.4 million tonne per annum operation producing around 70,000-80,000t per annum of zinc and 22,000tpa of copper in concentrates.
Capital costs were estimated at A$360-390 million.
All-in unit costs have been estimated at A$1701 or US$1215 per tonne of zinc equivalent metal sold for a 43% all-in sustaining margin at forecast metal prices of $3 per pound of copper and $1.30/lb of zinc.
The study generated a pre-tax net present value, using a 12.5% discount rate, of A$400-440 million, internal rate of return of 38% and payback period of three years from the start of production.
Peak funding pf $300-330 million will be required in around the third year to set up the infrastructure for future expansion.
Life-of-mine net revenue is forecast to be $3.45 billion and LoM costs to be $1.7 billion.
The scoping study was based on an updated resource, released yesterday following an 85,000m infill program.
Prieska has a total deep sulphide resource of 28.73Mt at 3.77% zinc and 1.16% copper, including 18.51Mt at 3.6% zinc and 1.17% copper in indicated.
"With nearly two-thirds of the resource now in the indicated category, we can present the case for the first 10 years of a very attractive mining operation," Orion managing director Errol Smart said.
"The study indicates solid operating margins, with the peak funding of $320 million inclusive of 20% contingency, recovered within the first third of mine life all supported by current indicated resources yielding an NPV of $420 million."
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