THE Industrial Development Corporation (IDC) has agreed to finance the balance of R79m in pre-development costs for Okiep Copper Project (OCP), said Orion Minerals which added that its venture’s empowerment scheme had also been agreed.
The South African government-owned bank will take a 43.75% stake in OCP’s holding company New Okiep Mining Company. Orion had previously contributed its 56.25% share equal to about R44.5m.
The funds will go into completion of feasibility studies by June next year. “Having also received the long awaited grant of the mining right to the core area, we are finally able to complete the required drilling and metallurgical sampling to finalise the optimisation of the feasibility studies which are already well advanced,” said Errol Smart, MD and CEO of Orion.
Orion announced on August 29 that it been granted the mining right for OCP, which is in the mineral-rich Northern Cape province, from the South African government. The 15-year right over an area called Flat Mines Area was granted to Southern African Tantalum Mining (SAFTA) with an option of extending the mining right up to a maximum of 30 years.
SAFTA is to be acquired by New Okiep Mining which provides the opening for a black economic empowerment deal, the mechanics of which see the IDC selling a 22.22% stake in New Okiep Mining to a firm led by Lulamile Xate.
Xate was the chairman of Resource Generation, a coal development company that recently filed for bankruptcy. He is a director of Cadiz Holdings, an asset management firm and founded Altius Investment Holdings.
Community and Employee Trusts will then each acquire a 5% “meaningful economic participation interest in NOM (New Okiep Mining) resulting in a 30% meaningful economic participation interest being held by HDSAs (Historically Disadvantaged South Africans),” said Orion Minerals.
Completion of the empowerment shareholding would be completed in the next two months, Orion Minerals said.
In February 2021, Orion exercised an option agreement to buy control of the Okiep project for A$7.5m (R86m) which the firm believes could eventually be restored to historic copper production of 40,000 tons of metal annually.