South Africa-focused copper developer Orion Minerals is a step closer to restarting operations at its Okiep copper project, after securing the Industrial Development Corporation (IDC) of South Africa as a 43.75% shareholder in the project.
Orion holds the remaining 56.25% interest in the New Okiep Mining Company (NOM).
Orion on Monday announced that it entered into definitive agreements with the IDC, which would see it acquire a 43.75% interest in NOM, triggering a pre-development funding arrangement for the Flat Mines SAFTA area. An initial A$1.9-million, or around R22-million, in funding is now expected during November.
The IDC funding of pre-development cost would amount to A$3.1-million, or R35-million, and will be advanced to NOM on the same terms as the pre-development funding of A$3.9-million, or R44-million, that Orion has already advanced to NOM.
“We are very pleased with the swift progress that has been made in completing our NOM deal with the IDC. We have signed definitive agreements, met all conditions precedent and have issued the drawdown notice for funding – all in less than two months after signing non-binding term sheets with the IDC,” said Orion MD and CEO Errol Smart.
“Orion, the IDC and Lulamile Xate’s BEECo all share a common vision to fast-track the feasibility studies, permitting and early development of the Flat Mines project at Okiep, with a view to restarting mining operations in this richly endowed copper district as soon as possible. The bankable feasibility study is already at an advanced stage and is expected to be completed and submitted for independent peer review in the first quarter of 2023.
“While the NOM/IDC deal has been progressing, our team has also been working in parallel on the definitive agreements with the IDC for the R250-million funding of the Prieska project, announced on October 21, and we expect completion of that agreement in the near future,” said Smart.
“Our growing business relationship with the IDC as a key development partner in unlocking the significant base metal potential of the Northern Cape will also position us to deliver value for our shareholders, our host communities and our staff, who will also be shareholders in our mines.”
A 2021 scoping study into the Okiep project, which was completed as part of the due diligence to acquire the project, confirmed the project economics. The scoping study estimated a peak funding requirement of A$58-million, including a 15% contingency, to produce 9 000 t/y of copper-in-concentrate at peak, potentially supplementing the 22 000 t/y of copper production planned from the Prieska project.
The Okiep scoping study estimated an initial mine life of 12 years, and an all-in sustaining cost of $2.03/lb of copper sold.