Feasibility Studies Reveal Strong Potential for Copper Production
Orion Minerals has unveiled bankable feasibility studies for two major copper projects in South Africa’s Northern Cape — the Prieska Copper Zinc Mine (PCZM) and the Flat Mines. Once operational, the projects are expected to produce a combined 28,500 tonnes of copper annually. This development marks a significant milestone for the company, which has struggled with a 33% drop in share value since its JSE inward listing in 2017.
Market Momentum Boosts Outlook for Copper Projects
The timing may prove ideal for Orion, as copper prices recently approached the $10,000 per tonne mark, driven by expectations of surpassing last year’s high of $11,000. Analysts, including Mercuria’s Kostas Bintas, predict prices could climb beyond $12,000, highlighting the strategic importance of Orion’s upcoming operations. Despite long timelines typical in the mining industry, investor optimism is building around Orion’s progress.
Funding Strategy Underway for Phased Development
To advance both copper projects, Orion aims to raise R8.9 billion in stages. The initial phase of PCZM — referred to as the “Upper Project” — could be built within 13 months at a cost of R550 million. The Industrial Development Corporation (IDC), a key stakeholder, is expected to finance Orion’s BEE partners. Errol Smart, the company’s former CEO, emphasized that the IDC’s involvement and existing partnerships offer a promising funding foundation.
Leadership Transition as Focus Shifts to Construction
Following Smart’s resignation, Tony Lennox — a seasoned mining executive and former Palabora Copper MD — has stepped in as CEO. Lennox’s immediate task will be securing structured finance through a mix of commercial debt, equity, and prepayment deals with copper traders. While equity is the costlier option, Smart noted that a balance of funding sources, including interest from major mining firms, is vital for moving forward.
PCZM and Flat Mines to Power Long-Term Growth
Production at PCZM is expected within 13 months of the final investment decision, with an initial four-year phase followed by a deeper, longer-term section. The mine will prioritize gold and silver by-products, leaving zinc untapped for cost efficiency. In parallel, the Flat Mines project will require A$103 million and is forecasted to yield 6,500 tonnes of copper annually — peaking at 9,500 tonnes. With low capital intensity and competitive operating costs of $4,550/t, Orion positions itself in the industry’s most cost-efficient segment.
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