By: Creamer media

The strongly supported capital raise is described as being pivotal by Tony Lennox, the CEO of ASX- and JSE-listed mining development company Orion Minerals, which is reviving the Prieska Copper Zinc Mine, near Copperton, which produced 430 000 t of copper and a million tons of zinc from volcanogenic massive sulphide (VMS) base metal deposits when operated from 1971 to 1991 by Anglovaal.

“In particular, we received strong support from South African investors via the JSE – which reflects Orion’s growing visibility and status in South Africa as an important new copper producer at a key time in the global metals cycle. In addition to continued support from long-standing shareholders, we also attracted several new investors onto the register,” Lennox added in the media release to Mining Weekly.

The quantum of the raising puts Orion in a position to begin developing the Uppers Mine at the Prieska Copper Zinc Mine as soon as the financing transaction with Glencore is completed. Linked to the sale of bulk copper and zinc concentrates, the Prieska mine has secured a binding prepayment agreement with a wholly owned subsidiary of Glencore for a $250-million facility.

South African Reserve Bank approval is expected in the coming weeks.

Also funded will be optimisation studies, ongoing site works and resource extension drilling at Orion’s Okiep Copper Project, also in the Northern Cape, where the latest drilling has provided a clear path to scale up at Flat Mine East, where an extension hole is already proceeding down dip as a follow-on.

The latest capital raising, conducted by way of a placement, involves the issue of 698-million ordinary shares at an issue price of 26c a share.

The permitted Prieska mine has a compliant resource of 31-million tonnes at 1.2% copper and 3.6% zinc.

A definitive feasibility study published last year has confirmed the potential to develop a mining operation through a two-phase development strategy aimed at derisking the development pathway and fast-tracking value-creation from a safe, modern, long-life, mechanised, underground base metal mine. Yearly steady-state production of 22 000 t of copper and 65 000 t of zinc is expected

The initial Upper phase is based on mining near-surface supergene sulphide ore, which is accessible from an existing decline. 

The Deeps phase will start after the completion of mine dewatering, refurbishment of the main shaft and construction of the mining infrastructure. The Deeps has an 11-year mine life and will overlap with the past 2.2 years of the Upper mining, providing a combined mine life of 13.2 years.

Orion sees the potential to define a new VMS opportunity in the area surrounding the mine’s deposit, with near-mine exploration programmes delivering a series of compelling new targets.

VMS deposits, which generally occur in clusters, often comprise additional medium-sized deposits and even more smaller deposits.

Orion could in future use modern geophysics and the latest geological advances to see if there are additional VMS deposits nearby.

Interestingly, through Xplor, mining major BHP and Orion have partnered to look at older geology in new ways.

As part of the programme, a number of Orion’s South African exploration project companies will receive an aggregate equity-free grant of $500 000, access to BHP’s technical specialists, and structured support to advance geological concepts in the Northern Cape, with deeper copper-centric metal systems being intensively probed. Xplor is providing the chance to apply new tools and better data.