Orion requests R167m for developing copper-zinc project in Northern Cape

Copper developer Orion Minerals has taken the first step to obtain some of the funding that has been earmarked for its flagship Prieska copper-zinc project in the Northern Cape, to move into mine development and construction.

The Australian exploration and development company, valued at about R1.3bn on the JSE, said the first drawdown notices for R167m in funding had been submitted after fulfilling the conditions of the R250m convertible loan from the government-owned IDC, and A$10m (R122.9m) from Canadian company Triple Flag.

“This will allow us to accelerate pre-development mine works, including trial mining in the upper levels of the mine and construction and commissioning of mine dewatering installations,” Orion CEO Errol Smart said, describing the latest developments as a “significant milestone” for its two key base metal hubs — Prieska and the Okiep copper project — in the Northern Cape.

The company added that the mine dewatering of the Prieska project was “well advanced, with underground storage dams and pump site construction completed, and the shaft platform installed to facilitate pump installation”, adding that the first delivery of the first large-scale pumps and piping were “imminent”.

The demand for copper is projected to surge in the coming years, driven by the green revolution as the world gradually moves away from climate-polluting fossil fuels.

The agreements with the IDC and Triple Flag are part of Orion’s multi-pronged funding strategy totalling R370m (A$30m). The funding allows Orion to start with the trial mining and processing of ore and to complete feasibility studies.

Smart said the funding puts Orion in a “very strong position” for its development strategy and to prepare the company in becoming a developer and ultimately an operating mining company.

In October, the state-owned IDC advanced a R250m loan for early mining works and the predevelopment of Prieska. This came just a month after the IDC agreed to provide R34.5m to support pre-development costs at Orion’s Okiep Copper Project in exchange for a 43.75% share in the New Okiep Mining Company.

The Canadian company, Triple Flag, also extended $87m in funding to Orion to support early production at Prieska.

In March, Orion announced a A$13m two-tranche share placement, which led to the introduction of privately owned mining group Clover Alloys as an investor.

According to Orion, Clover Alloys’ expertise will be crucial in the development of Prieska and Okiep to production phase.

Orion has also received support from existing long-term shareholders, the Delphi Group and the Tembo Capital Mining Fund, both of which participated in the recent placement.

With Andries Mahlangu

gousn@businesslive.co.za