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Orion granted mining right over Prieska, secures underground mine developer

Orion Minerals Ltd. unit Repli Trading No. 27 (Pty) Ltd. was granted a mining right over its portion of the Prieska deposit, part of its Prieska copper-zinc project in South Africa, clearing the way for construction to start.

The mining right is valid for 24 years and can be renewed for further periods of up to 30 years.

The company said Sept. 3 that it will now advance planning for the Prieska project and formalize project financing.

Orion also expects to soon receive the mining right to the southeastern strike extension of the Prieska orebody on the Vardocube prospecting right area.

In a separate same-day release, the company said it entered a memorandum of agreement with Byrnecut Offshore (Pty) Ltd. for underground mine development and production at the Prieska project.

Byrnecut agreed to provide underground mine development and mine production services, and collaborate with local black economic empowerment enterprises.

In early August, Orion welcomed a new investor, Safika Resources (Pty) Ltd., to the Prieska project as part of the restructuring of its black empowerment equity, granting the latter an initial 44.72% stake in Prieska Resources, which owns 20% of the project.

A bankable feasibility study for the foundation phase of the Prieska project estimated startup capex at A$402 million, with sustaining capital expenditure of A$83 million, and a 2.9-year payback from first production.

The project's payable metal production during the 10-year foundation phase will total 189,000 tonnes of copper and 580,000 tonnes of zinc.