Orion awarded mining right at Prieska, strengthens exploration pipeline


PERTH (miningweekly.com) – Dual-listed Orion Minerals is making significant strides in advancing its Prieska copper/zinc project, in South Africa's Northern Cape, while also strengthening its base metals exploration pipeline in the highly prospective Areachap belt.

It has been granted a mining right for its flagship Prieska copper/zinc project, in South Africa, and has struck a collaboration agreement with underground miner Byrnecut Offshore for the underground mine development and production at Prieska. Orion on Tuesday told shareholders that the grant of the mining right represented a major step towards the development of the Prieska project, and cleared the way for construction to start.

Orion CEO Errol Smart

“Our strategy to deliver a substantial new base metals mine at Prieska is rapidly gaining momentum. Receiving the mining right is a major milestone in the development of the project and the award of this permit is testament to both the vision of the Orion leadership team and to the support of the South African authorities for new investment in a modernized mining sector,” said Orion MD and CEO Errol Smart.

“The Prieska project represents a valuable strategic asset in the global base metals sector, being one of the few permitted midtier base metal development assets well positioned to move into development and production. “Our timing with this project could not be better; demand for copper is expected to soar over the next decade on the back of transformational growth in the electric vehicle and green energy sectors,” said Smart. Granted under the Mineral and Petroleum Resources Development Act, the mining right is valid for an initial 24-year period and can be renewed on application for further periods, each of which may not exceed 30 years. Meanwhile, Orion on Tuesday also announced the signing of a memorandum of understanding (MoU) with Byrnecut to form an alliance for the development and production from an underground operation at Prieska.

Under the terms of the MoU, the parties will work towards a formal agreement under which Byrnecut will provide underground mine development and production services, commit to promote local employment and skills transfer, and commit to collaborating with local black economic empowerment enterprises, in line with Orion’s commitments. “We are delighted to include Byrnecut into the list of partners we will be working with to establish what will be another world-class mine in the Northern Cape,” said Smart.

“Byrnecut has an impressive reputation on the African continent both in terms of their operational proficiency and their approach to skills transfer and harmonious relations with local communities. Their involvement in developing Prieska will be invaluable.” Orion will now move to formalize project financing for the A$378-million project, which is expected to produce at a rate of 2.4-million tonnes a year, producing 189 000 t of copper and 580 000 t of zinc in its ten-year foundation phase.

EXPLORATION PIPELINE Orion on Tuesday also announced that it would take a controlling interest in a key exploration tenement package located about 80 km north of the Prieska project. Orion currently holds a 49% interest in privately owned South African company Masiqhame Trading 855, which holds a prospecting right over a highly prospective area of almost 980 km2 in the Areachap belt and which has received Ministerial consent to transfer a controlling interest in the company to Orion.

As a result, Masiqhame will issue an additional 1% of its shares to Orion, giving Orion a 50% interest in Masiqhame. Further, under the terms of a September 2016 earn-in agreement between the parties, Orion has the opportunity to earn an additional 23% stake in Masiqhame by completing a feasibility study on any mineral project on the property held by Masiqhame.

"Obtaining Ministerial consent for the transfer of a controlling interest in Masiqhame to Orion is a key step, which gives us management control and the opportunity to increase our ownership in this highly prospective northern exploration package to 73%.

"Orion’s strategy is to develop a pipeline of volcanogenic massive sulphide (VMS) exploration opportunities across the highly prospective Areachap belt to complement our flagship Prieska project, where we intend to establish a new processing facility and infrastructure. VMS deposits generally occur in clusters and we believe the exploration upside in the broader belt is significant," Smart commented in a release issued on Tuesday.

He added that Orion had, during 2018, identified a number of high-priority VMS targets on the Masiqhame prospecting right. Two VMS deposits, Kantienpan and Boksputs, as well as several other copper/zinc occurrences are known to exist on Masiqhame and a high-powered fixed-loop time domain ground electromagnetic survey conducted on Kantienpan by Orion in 2016 detected previously unknown conductors below and along strike from known mineralisation. Drill testing of the conductors yielded encouraging results, intersecting massive sulphides. These results highlighted the potential to unlock new discoveries by using modern geophysical methods in the Areachap belt. The mineralisation at the Kantienpan deposit remains open both along strike and at depth. Orion believes the integration of geochemical and geophysical methods may quickly enable new targets to be identified within the Masiqhame prospecting right, which overlies a highly prospective VMS horizon extending over more than 30 km of strike. "This horizon contains numerous published occurrences of copper/zinc mineralisation associated with massive sulphides," the company noted.


LINK : https://www.miningweekly.com/article/orion-awarded-mining-right-at-prieska-2019-09-03

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