Orion Minerals Ltd set to deliver its first copper production within 24 months as copper is seen as the ‘new oil’

Orion Minerals Ltd (ASX:ORN, JSE:ORN) is set to deliver the first copper production from its two flagship projects – the Prieska Copper-Zinc Project and the Okiep Copper Project – both located in Northern Cape, Africa of the South, over the next 24 months.

Along with advanced feasibility studies for the flat mines of the Okiep Project and the early production scenario of the Prieska Project, the Company aims to determine the optimal path for its first copper production to take advantage of favorable copper market conditions.

The company is well positioned to supply critical metals to the global energy transformation with copper prices near record highs and demand expected to outpace production for the foreseeable future.

Orion Managing Director and CEO Errol Smart said, “To take advantage of the current positive market conditions, we have accelerated our evaluation of an early production strategy for the Prieska Copper-Zinc Project based on moving the development of the open pit mine at the start of the mine project.

“Early open pit production at Prieska, together with the opportunity for early production from the Okiep flat mines, which we added to our portfolio earlier in 2021, could allow us to deliver the first copper production from the mining operations of Prieska and Okiep over the next 24 months, while significantly de-risking both projects and providing a profitable production platform with strong near-term growth through advanced expansion projects .

“Our two base metals centers in the Northern Cape Province of South Africa position us to deliver critical metals for the global energy transformation at the right time. With copper prices near record highs and demand expected to outpace production for the foreseeable future, the timing is perfect for Orion.

“Exercising the option to acquire and consolidate Okiep was a major step forward in our strategy to become a diversified next-generation base metals producer.”

Accelerated Prieska Project

Investigations are currently underway into an early production scenario that reschedules production from open pit to occur concurrently with the 33-month development phase of the Prieska Deeps mine, rather than at the end of the life of the project, as planned in the Bankable 2020 Feasibility Study (BFS-20). The report is to be completed by mid-2022.

The investigations focus on the production progress and timing of the implementation of the BFS-20 plan.

An underground drilling campaign to upgrade the mineral resource categories supporting the BFS-20 open pit plan and to assess the potential to extract unmined pillars for structural support during previous mining operations is currently underway. of mobilization.

The program was scheduled to start in February 2022 and end in June 2022.

Updated mineral resource and ore reserve estimates will be available shortly thereafter.

Orion is also evaluating the possibility of staggering the implementation of the BFS-20 full-scale mine dewatering plan, so that a first scaled-down phase can be commissioned in 2022, as part of the preparation of the pre-construction project.

The assessment is expected to be completed for the investment decision by June 2022.

Smart added: “This alternate scenario is looking more and more like the path we should be going.

“It is important to note that this early production scenario is based on the material mine plan assumptions already incorporated into the 2020 bankable feasibility study.”

Early Production Scenario Plan

The early production scenario plan will assess whether the sulphide ore processing plant can be commissioned by month 19, approximately 14 months ahead of the original BFS-20 schedule.

As with BFS-20, the processing plant would process material from the open pit at a reduced rate compared to steady-state operations for the depths, using one of two plants already secured for processing. large-scale production of the Prieska. Depths.

In this scenario, the second plant, along with additional flotation concentrators, would likely be installed later, as part of a phased expansion to accommodate feed from the increased throughput Deeps mining.

The ability to place nearly all tailings from the ore processing plant as backfill in historic and planned mine voids, thereby reducing the size of the tailings storage facility required, doubling, and further reducing expenses Initial capital and financing is also being assessed.

Prieska Deeps Mine Funding

While discussions on the financing of the Prieska project, based on the BFS-20 plan, are underway with banks and financial institutions, investigations to further improve the technical and commercial aspects of the project are underway.

In addition, discussions have been initiated with potential financiers, who have expressed interest in funding the dewatering and early production plan.

New discovery of copper

In February 2022, the company made a significant new copper discovery at the Okiep project, intersecting intrusive mafic copper sulphide mineralization.

This is the first borehole designed to test one of many SkyTEMMT geophysical anomalies identified in the Okiep project from an extensive SkyTEMMT survey conducted last year.

The mineralization intersected occurs as bubbles, veins and lenses of massive sulphides (80-100%) pyrrhotite-chalcopyrite over widths of 1-25 centimeters in drill core within the rich mafic intrusive host in magnetite.

Noting that early exploration success underscores the huge growth potential of the Okiep area, Smart said: “Remarkably, this is the first discovery in the district in over 40 years – and it is directly attributable to the use of modern geophysics, followed by detailed mapping and field surveys.

“What is really exciting, however, is that eight other high-priority SkyTEMs selectedMT the targets are currently being tracked by systematic ground surveys at the Okiep copper project and will be drilled over the next 12 to 24 months.

“The potential for new discoveries and significant additions to what is already an area with a huge copper endowment is huge.”

Growing demand for green metals

Base metals have done well in 2021, with copper ending the year up 25.7% and zinc gaining 31.5% over the year.

Demand for base metals and batteries continues to be driven by the global shift to greener and cleaner technologies, while persistent supply-side constraints have helped support significant price increases.

The metal last set a record high in 2011 around the peak of the commodity supercycle, triggered by China’s economic growth and domestic infrastructure investment.

The renewed interest in copper has been fueled by global efforts to reduce carbon emissions. This growing demand for green metals has strained supply, while new mining production has been slow to arrive.

Copper the “new oil”

Goldman Sachs (NYSE: GS) has described copper as “the new oil” because electric cars need several times more copper than their internal combustion engine counterparts.

CRU noted that demand from green energy applications is expected to account for 40% of refined copper demand growth in 2022 and that this will remain the main driver of demand in the years to come.

Copper prices are expected to moderate slightly in 2022, but remain sustained over the long term as demand exceeds supply.

Zinc prices will remain high

The spike in zinc prices came on the heels of news that Belgian company Nyrstar was cutting production by up to 50% at its three European zinc smelters and Glencore PLC (LSE:GLEN), which also owns three zinc in Europe, planned to adjust production to reduce energy costs.

Supply issues are expected to continue to support zinc prices through 2022.

S&P Global estimates that zinc prices will remain high throughout the year and that fewer mines are expected to start up in 2022-2025, particularly in China, where mined zinc is expected to fall to 3.8 million tonnes in 2022.

Green metals and green energy

In line with its commitment to play a key role in the green metal revolution, Orion has entered into consultations with juwi Renewable Energies Pty Ltd and the Central Energy Corporation (CENEC) to ensure that the Prieska project is fully powered by renewable sources. renewable energy and green hydrogen. .

CENEC plans to build a large-scale renewable energy center for the Prieska district.

in the Northern Cape Province of South Africa. Prieska PowerMT Reserve is a large-scale initiative to generate electrical energy from renewable sources and store this energy as green hydrogen and ammonia for the long term.

The project aims for energy independence from the national electricity grid.

Access to this hub would help achieve net zero carbon at the Prieska project and could make Prieska one of the world’s lowest carbon sources for copper and zinc.

Orion has already reached an agreement with the renewable energy company juwi to study the construction of its own renewable energy production plant at the mine and the CENEC collaboration is progressing on the continuation of the work already carried out to establish a project for the production of renewable energy. bespoke solar and wind energy for the Prieska mine.

Fraser range – nickel-copper projects

Orion manages a major property complex in the Fraser Range province of Western Australia in a joint venture with IGO Ltd.

Under the terms of the joint venture, IGO is responsible for all exploration on the claims.

Orion’s exposure to the ongoing exploration and development of the Fraser Range Project is without additional financial commitment, as Orion is free to perform the first pre-feasibility study on any of the properties.

A drilling program to test a number of high priority magmatic nickel-copper targets within the tenement E28/2367 joint venture commenced during the current quarter.

Other planned work includes planning and logistical preparation for the 2022 field season, rehabilitation of drill pads and access around Kanandah and Boonderoo stations, and detailed geological logging and selection. samples for geochemical analysis of the Hook 1, Hook 2 and Bilby drill holes.

This will then lead to the geological and structural interpretation of logging cores, geophysical surveys (such as DHEM) and geophysical data from Hook 1, Hook 2 and Bilby and subsequent conclusions and recommendations.