Orion Minerals sells Connors Arc project in Australia, to focus on SA mine
Shares in JSE-listed Australian Orion Minerals rose 16% to 44c on Wednesday morning after it announced the sale of a gold mining project in Queensland.
Orion said it intended to use the up to $5m it will receive for its Connors Arc project to fund developing its South African zinc and copper project.
Evolution Mining has agreed to pay $2.5m cash plus a 2% royalty on gold recovered from the Connors Arc up to a total of $5m, Orion said in Wednesday’s statement.
Orion said the sale was consistent with its decision to place greater focus on its flagship project in the Northern Cape, the Prieska zinc-copper project in the Areachap terrain.
This also included its highly prospective regional exploration projects within the Areachap belt, including the advanced Jacomynspan nickel-copper-cobalt project, Orion said.
In the 1980s, SA was hardly a large player in the zinc market, generating between 77,000 tonnes and 112,700 tonnes a year in the latter half of the 1980s compared with global output of more than 7-million tonnes.
Production from the Prieska mine, estimated at an aspirational 40,000-60,000 tonnes a year, would complement higher output from Vendanta’s Gamsberg mine.
The Prieska mine, once one of the flagship South African zinc mines, closed in the early 1990s because, according to Orion CEO Errol Smart, the change and cost involved in mining the ore body was just too much for then owner Anglovaal Mining.
In December Orion said Anglovaal left an estimated 23-million tonnes of reserves, which Orion was confirming through an intensive drilling programme consisting of 18 drill rigs.
Prieska generated about 1-million tonnes of zinc and just less than 500,000 tonnes of copper during its 20-year life, but there is a lot of metal left to be mined using modern mass-mining methods and tweaking historical recoveries with newer concentrating technologies, according to Smart.
With Allan Seccombe