UK-based private equity firm, Tembo Capital, has agreed to extend a $3.6m loan facility to Orion Minerals by about four months to end-October.
Orion Minerals MD, Errol Smart, said in a statement the loan facility – which can be converted into shares – had been extended to October 31 from June 25. Held through its Tembo Capital Mining Fund, Tembo Capital owns about 25% of Orion Minerals which is developing the Prieska Copper-Zinc Project.
Development of the project has been delayed by the COVID-19 pandemic with construction of the project only likely in the first quarter of next year with first production in 2024. This may coincide with a recovery in the copper market, said Smart in an interview with Miningmx in May.
“In the short-term, there’s going to be pain in the copper market,” said Smart of expectations of global recession as a consequence of the COVID-19 lockdown. “It will take about two to three years before the smelters are seeing the benefit [of a restocked pipeline]. We’ve also seen quite a lot of destruction in the zinc market.”
There was only the most preliminary work taking place on site until funding was in place, but Orion was hoping to finalise the last of its required permits from South Africa’s Department of Mineral Resources and Energy, principally a water use authorisation. “Local officials are back at work but it is constrained understandably,” said Smart.
Orion recently published updated findings on a bankable feasibility study for the project which found that production could be increased to 22,000 tons of copper and 70,000 tons of zinc annually over 12 years instead of a 10-year life of mine.
However, the capital cost of the project has increased to A$413m from A$378m in order to accommodate technical improvements.