BFS Unveils Strong Economics at Orion’s Prieska

Orion Minerals (ASX:ORN,JSE:ORN) has unveiled the results of a bankable feasibility study (BFS) for the foundation phase of its Prieska copper-zinc project. It includes a post-tax net present value of AU$408 million.

The project, located in South Africa’s Northern Cape, boasts economics such as post-tax free cash flow of AU$819 million and an internal rate of return of 33 percent after tax. It creates a strong contrast to the asset’s peak funding requirement of AU$378 million, with the company predicting a payback period of 2.9 years from first production.

Meanwhile, Prieska hosts a maiden ore reserve of 13.62 million tonnes at 1.1 percent copper and 3.2 percent zinc for 143,000 tonnes of contained copper and 433,000 tonnes of contained zinc.

The fresh BFS is based on a 2.4 million tonne per annum (mtpa) underground and open-pit operation, and has optimization and extension opportunities. These include examining existing mineralized pillars for future extraction and drilling high-grade intersections on the periphery of the deposit.

According to Orion, a mineral resource of over 9 million tonnes at 1.1 percent copper and 3.6 percent zinc was not included in the current mine plan, allowing for even further resource potential at Prieska.

“We have long believed Prieska represents a highly valuable strategic asset with the potential to become a significant source of high-quality copper and zinc concentrates that we believe are highly sought-after in global markets,” Orion Managing Director and CEO Errol Smart said in a statement.

“The favorable results from the BFS strongly support that belief and provide us with the framework to progress this high-quality asset towards financing and production, with an initial focus on harvesting the high quality resources delineated by our extensive drilling programs undertaken over the past two years.”

Prieska currently has a projected 10 year foundation phase, which the BFS encapsulates. During that time period, Orion will be exploiting targets of the deposit that were upgraded to indicated and inferred mineral resources during a 2017 to 2018 drilling campaign.

It is expected that 20.8 million tonnes of material will be mined and processed in order to produce 189,000 tonnes of copper and 580,000 tonnes of zinc in differentiated concentrates during the foundation phase.

As Orion waits to be granted mining rights at Prieska, the company intends to finish optimizing the BFS plan and to advance project financing discussions and implementation planning. It also plans to wrap up agreements with suppliers and concentrate offtake partners.

Orion shares rested at AU$0.30 by the end of Wednesday’s (June 26) trading on the ASX.

As of Tuesday (June 25), copper was trading at US$5,985 per tonne on the London Metal Exchange, while zinc traded at US$2,643 per tonne.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.