Orion to weigh funding options as Prieska zinc-copper study nears completion

ORION Minerals has set about the task of how it will raise finance for its Prieska zinc-copper project, a brownfield development set in South Africa’s Northern Cape province. It estimated previously the project could cost in the region of A$250m.

The company said in an announcement to the Johannesburg Stock Exchange today that it had retained Endeavour Financial which would assist it looking at funding options. This was while a bankable feasibility was nearing completion in the second quarter of this year.

“We will be considering various funding sources and will work to have project financing in place to move forward with a project development decision in Q3 2019,” said Denis Waddell, chairman of Orion Minerals.

“Our focus is on bringing the 2.4 million tonnes a year Prieska Project into production as quickly as possible, based broadly on the parameters outlined in the positive scoping study released in December 2018, he said. “The bankable feasibility study is well advanced and on track to be completed in Q2 2019.”

On January 25, Orion Minerals announced it had agreed with lender, Tembo Capital, that the UK fund provide a $3.6m loan facility. The facility is convertible into Orion shares at 2.6 cents/share, the same value as contained in an earlier convertible note between the two.

Once Orion receives regulatory approvals and funding it would take about two to 2.5 years to develop the mine to first production. A mine of this size could cost about A$250m, the company said last year. The resource is situated on the site of an old mine previously operated by Anglovaal Mining in the Eighties. At the time it employed about 4,000 people.

The company said in November last year that it would also consider exploring possible synergies with Vedanta which operates the Black Mountain smelter complex in the province.