Orion Minerals Ltd (ASX:ORN, JSE:ORN) has secured a pivotal ZAR250 million (about A$22 million) convertible loan facility from the Industrial Development Corporation of South Africa Ltd (IDC) to fund early mining works and key pre-development activities at the Prieska Copper-Zinc Project in the Northern Cape region of South Africa.
With the funding secured, Orion will now be able to complete a bankable feasibility study (BFS) on Prieska and to commence the dewatering of the existing underground mine, which is critical for the long-term development of the project.
Terms of the funding have been recorded in a non-binding term sheet agreed between the IDC, Orion, Agama Exploration and Mining Proprietary Ltd, a wholly-owned subsidiary of Orion, and Prieska Copper Zinc Mine Proprietary Ltd (PCZM), a majority-owned subsidiary of Orion.
Landmark funding
Orion managing director and chief executive officer Errol Smart said: “We are thrilled to have reached this landmark funding arrangement with the IDC which, when finalised, will allow us to finally get pre-development work underway at the fully-permitted Prieska Copper-Zinc Mine.
“This is a huge milestone for all our stakeholders, particularly for the shareholders who have supported us and the local communities that stand to benefit as this very significant new mining project for the Northern Cape region comes to life.
“The combined pre-development funding being provided by the IDC and our other strategic funding partner, Triple Flag, now totals over ZAR350 million (about A$32 million). This will allow dewatering to commence at 500 cubic metres per hour from the Prieska underground mine workings. It will also provide funding for us to carry demonstration trial mining on the more than 105 crown pillar and selected remnant pillars available above the current water level.
“Securing the IDC as a project partner at both of our Northern Cape project hubs, Prieska and Okiep, is a huge achievement by the Orion team. I would like to take this opportunity to thank the IDC for their support, which is pivotal to our efforts to unlock these high-quality base metal assets. The trial mining phase and revised Bankable Feasibility Study are expected to be completed in mid-2023, allowing project financing to proceed to supplement the US$80 million Triple Flag stream financing announced in May 2022.”
Critical works
The mining of the crown and remnant pillars down to the 385-metre level at Prieska and the dewatering of the Prieska mine are key pre-development workstreams of the BFS, and are well in advance for completion in the middle of next year.
The dewatering project is a critical long-lead item as total dewatering of the mine is required to access the main volcanogenic sulphide orebody. Additional remnant pillars will be exposed as the dewatering of the mine progresses.
Orion and the IDC expects to execute the definitive agreements for the loan in the fourth quarter, for funding to be available for drawdown towards the end of the year.