Wrap Text
September 2023 Quarterly Activities Report
Orion Minerals Limited
Incorporated in the Commonwealth of Australia
Australian Company Number 098 939 274
ASX share code: ORN
JSE share code: ORN
ISIN: AU000000ORN1
September 2023 Quarterly Activities Report
HIGHLIGHTS
- Orion continued its transition towards becoming a mine developer and operator at the Prieska
Copper Zinc Mine (PCZM), with critical path items including recruiting and onboarding of a skilled
operating team, preparation of detailed designs together with execution plans for the trial mining
program and installation of primary infrastructure upgrades all progressing according to plan.
- Updated PCZM +105 Mineral Resource reported, increasing the resource to 2.3Mt at 1.7% Cu and
1.6% Zn including an Indicated Resource of 1.9Mt at 1.82% Cu and 1.70% Zn and increases the total
PCZM Mineral Resource to 31Mt grading 1.2% Cu and 3.6% Zn.
- Initial drawdown of project development funding, ~A$13.8 million was called in July 2023, from
facilities totalling ZAR370 million, being the ZAR250 million (~A$20 million) Industrial Development
Corporation of South Africa Limited convertible loan facility and the Triple Flag A$10 million early
Funding Arrangement.
- Trial Mining Contract awarded to experienced South African contract mining company, Newrak
Mining Group. Newrak will operate both with a fleet of conventional load, haul & dump loaders and
an innovative continuous loading machine introduced recently to the South African market.
- Installation of the main 178m rising main dewatering pipe completed, with primary dewatering
expected to commence in Q1 2024 following commissioning of the primary 15MW electrical power
supply.
- Updated Feasibility Study on the accelerated development strategy and staged ramp-up at Prieska
well advanced and on track for completion by mid-CY2024, once trial mining has been completed.
- Upgraded Mineral Resources completed for the Flat Mines area at the Okiep Copper Project (OCP),
with a revised geological interpretation resulting in improved definition of the mineralised zones,
together with an increase in the total Mineral Resource.
- Mineral Resources at Flat Mine North, East and South now total 9.3Mt at 1.3% Cu for 130,000 tonnes of
contained copper, including a Measured and Indicated Resource of 7.4Mt at 1.4% Cu.
- Mineral Resource for the entire OCP increased to 12Mt at 1.4% Cu for 160,000 tonnes of contained
copper.
- Updated Mineral Resource is incorporated in the Bankable Feasibility Study (BFS) for the OCP, which
has been completed and handed to the Independent Technical Adviser for review.
- Orion received the AAMEG Emerging ESG Leader Award for the Company's pioneering approach to
community involvement in its projects, particularly its Community Participation Framework at PCZM.
Orion's Managing Director and CEO, Errol Smart, said:
"This is a very exciting period for Orion as we make the transition from an exploration company into an
operating copper mining company. With our multi-pronged funding strategy implemented last quarter,
we were able to push ahead with a range of key activities during the September Quarter which saw our
strategy to bring the PCZM back into production, rapidly gaining momentum.
"At the core of our strategy is securing an appropriately skilled, local resident operating team comprised
of select full time staff supported by skilled contractors. We have been particularly successful in securing
the services of the previous mine senior management who bring valuable experience in the mining and
metallurgical operations for this specific orebody.
"We spent the greater part of the September Quarter completing essential preparations, such as installing
underground refuge chambers, upgrading the hoisting capacity of the emergency escapeway to the
surface and sourcing and installing key ventilation equipment in preparation for trial mining.
"We awarded a six-month trial mining contract to experienced contract mining company Newrak, who
will target the near-surface, +105 Level Crown Pillar deposit using both conventional and alternative
underground mining methods.
"The updated Mineral Resource for the +105 Resource Block which was completed last quarter, outlined
a very attractive early mining opportunity focussed on the high-grade supergene sulphide Indicated
Resource, with a grade of 2.6% copper. Ore sourced from the trial mining will be used for metallurgical
optimisation tests and the detailed design of an initial processing plant at Prieska with all the data and
results to feed into the Early Production, Bankable Feasibility Study, which is expected to be completed
by mid-2024.
"While we are very busy at Prieska, we have not lost sight of the huge opportunity we have at our second
emerging production hub, the Okiep Copper Project, also in the Northern Cape. During the Quarter, we
delivered an increase in the total Mineral Resource for the Flat Mines area at Okiep following a detailed
geological review. This has given us greater confidence in the resource model, with the positive outcome
now incorporated into the OCP BFS.
"Importantly, our vision for the acquisition and the consolidation of mineral rights of the majority of the
most prospective areas of the historic O'okiep Copper Company's mineral holdings, also took a major
step forward during the Quarter, with the Department of Mineral Resources and Energy granting Orion
prospecting rights over five additional areas in the Okiep Copper District. These grants have increased
our tenement holding by about 30,000 hectares and give us access to additional minerals within the Flat
Mines Mining Right including tungsten, silver, and gold.
"The busy Quarter was topped off by Orion receiving the AAMEG Emerging ESG Leader Award at the
2023 Africa Downunder Conference in Perth for our pioneering approach to community involvement at
our projects, particularly our Community Participation Framework which was developed at Prieska. A
strong commitment to the environment, communities and ethics have always been at the heart of Orion's
operating strategy, and we have worked hard over many years to ensure we deliver genuine, positive,
long-term benefits for the regions in which we operate. We are incredibly proud to have received this
award, the second time we have done so. This shows what can be achieved in the ESG arena,
irrespective of the size of the company."
Orion Overview
Orion Minerals Ltd (ASX/JSE: ORN) is a diversified international base metals company which is developing
three complementary base metal production hubs in South Africa's Northern Cape Province, a richly
endowed mineral province and well-established mining jurisdiction.
Orion is prioritising the development of projects capable of meeting the growing demand for key future
facing metals – such as copper, zinc and nickel – that have strong market fundamentals because of
declining global resource inventories, falling grades at major mines and lack of investment in new mines.
The use of these metals in clean energy technologies makes them critical to a low-carbon future.
The Company is fast-tracking the development of its flagship Prieska Copper Zinc Mine (PCZM), with an
Early Production Feasibility Study currently in progress targeting a staged ramp-up of operations and
production. Key inputs to this study include the upcoming trial mining program and metallurgical test
work, with dewatering of the underground mine also commencing in early CY2024. The Feasibility Study
is due for completion by mid-CY2024.
Orion is also advancing the development of a second production hub, initially based on the Flat Mines
area at the Okiep Copper Project (OCP), while also conducting exploration programs to increase the
Resource and Reserve base to underpin a larger-scale, longer-term operation. A BFS on Flat Mines has
been completed and handed over to the Independent Technical Expert for review. The OCP comprises
the core of a premier historical copper district that produced >2Mt of copper over a 150-year period
ending in 2006.
Orion's third project, the Jacomynspan Nickel-Copper-Cobalt-PGE sulphide (JMP) project will leverage
off modern refining technology specifically directed toward production of metal products that are critical
to the energy transition. The metal vapour refining technology currently being tested on JMP metal
sulphide concentrates presents an exceptional opportunity to maximise metal recovery to high value
products with high ESG credentials.
Operations Report
Health and Safety, Community Engagement and Environmental Management
Health and Safety
One injury was recorded during the September 2023 Quarter and the hours worked for the Quarter and
the 2024 financial year to date are shown in the table below:
Table 1: Hours worked at the Group's Areachap and Okiep Copper Projects (South Africa).
Hours Worked
Category of Work
Quarter FY2024 YTD Total
Exploration 3,682 3,682
Surface 11,326 11,326
Underground 5,988 5,988
Contractors 8,089 8,089
Total 29,085 29,085
The Lost-Time Injury Frequency Rate (LTIFR) per 200,000 hours worked is 0.0 for the September Quarter.
At the end of the Quarter, the team celebrated 1,506 days without a Lost Time Injury (LTI) and 333
accident-free days to 27 September 2023. Following Quarter end, a minor accident occurred, whereby
a hand injury was sustained, and the Group's accident-free count was reset to zero.
Community and Stakeholder Engagement
Orion – AAMEG Award for leadership in ESG
In September 2023, Orion received the Australia-Africa Minerals & Energy Group (AAMEG) Emerging ESG
Leader Award, which recognises Australian companies performing exemplary ESG work on the African
Continent. This is the second time Orion has won this prestigious industry award, having also received the
inaugural Emerging ESG Leader Award in 2020.
This year's award recognises Orion's pioneering approach to community involvement in its projects,
particularly its Community Participation Framework, which was developed at PCZM.
The framework, which has evolved through a year-long series of in-person meetings with representatives
from local businesses and resident groups, commits Orion to proactively encourage host community
involvement in its operations through targets of 50% of employment, 30% of the procurement of goods
and services, and 40% of sub-contracting opportunities.
As the mine begins its transition to the implementation of the Early Production Plan, Orion has already
started implementing initiatives that will equip the host community and businesses to meet and beat
these targets as the mine develops. Orion anticipates that the framework will create the opportunity for
local small enterprises to grow as standalone businesses or via joint ventures with larger established
suppliers.
It is also the first of its type among junior mining companies operating in South Africa. The framework is a
model for community engagement and participation that can go a long way towards stabilising
relationships with those who live close to, and often depend on, mining operations.
Orion's PCZM Community Participation Framework also provides a template that will be implemented in
all of Orion's other operational areas as our projects move into development and then production.
Further information about the Community Participation Framework can be accessed via our website,
https://orionminerals.com.au/sustainability/community/. Orion's entry submission for the AAMEG award
can also be viewed via AAMEG's website.
Orion continues productive engagements to update on progress
Orion continues to engage productively with its host communities to update them on the recent progress
in securing funding and fast-tracking the development plans for its projects.
Siyathemba Community
Pixley Ka Seme District Economic Symposium
Orion participated in the Pixley Ka Seme District Economic Symposium, organised by the Department of
Economic Development and Tourism in Prieska from 23 to 24 August 2023. Delegates from provincial and
district government departments and local businesses convened to discuss economic development in
the district and the wider Northern Cape region, funding opportunities and services for small businesses.
Orion presented its vision for the region, outlining its investment and plans for the integrated mining and
beneficiation of future-facing metals in the province.
Local Enterprise Development and Skills Transfer
The first PCZM Social & Labour Plan Human Resource Development program commenced with 20 local
candidates participating in Competency B (underground safety) training, which entails, amongst others,
skills to identify risks and to install, maintain and remove underground support. Training took place at the
Murray & Roberts Training Centre in Carletonville and transportation services were arranged through a
local vendor.
PCZM promotes mining as a career path
In September, PCZM staff members assisted with a career day event hosted by Copperton Wind Farm.
The event was supported by the Kimberley TVET College, Garob Wind Farm, Acciona Energy, the Mulilo
Prieska Community Trusts and Orion. Valuable information about subject choices and further study
options was shared with matriculants and post-matriculant students.
In addition, PCZM made a financial contribution to the sponsorship of an academic excursion to Cape
Town for members of the Moreson Primary School, Prieska, in collaboration with Mulilo Prieska Community
Trust. This excursion was made possible through a combination of internal fundraising and parental
contributions. This excursion allowed learners to be exposed to historical sites, career path choices and
stimulated personal growth.
Nama Khoi Community
Orion continues productive engagements with stakeholders
Orion continues with its efforts to foster trust and strengthen relationships with various stakeholders. During
the quarter a Stakeholder Engagement meeting was convened to share information with the ward
councillors. In addition, the partnership with the local radio station, Radio NFM 98.1, was renewed. Our
research has shown that radio remains an effective way to communicate with stakeholders in
Namaqualand. This partnership allows us to use the platform to share information on Orion's latest
developments and plans.
First Social and Labour Plan projects underway
Significant progress was achieved towards the execution of two Flat Mines Social and Labour Plan (SLP)
projects during the Quarter. These Local Economic Development projects are focused on animal
husbandry and agriculture to ensure that communities have a way to sustain their livelihoods beyond
mining.
A dedicated project team has identified that the projects' next phase will include training, and Orion has
initiated discussions with the Department of Agriculture to define the necessary training structure and
requirements. While locating suitable sites for these projects has presented challenges, a solution is
anticipated by early next year.
Facilitating economic growth and regeneration
Orion contributed towards the cost of venue hire for the 7th Karoo Small-Town Regeneration Conference,
organised by the South Africa Local Government Association (SALGA).
Hosted in Springbok in September, the conference aims included coordination, integration, and
harmonisation of socio-economic infrastructure investments within the region. Addressing spatial
transformation strategies with a shared vision and a set of development objectives for the Karoo region,
the conference was also aimed at ensuring economic growth and job creation. Orion is proud to support
efforts to facilitate economic growth and regeneration in its host communities.
Environmental Management
Making positive contributions to the state of the natural environment, reducing pollution, and ensuring
negligible contamination from operational activities are central to Orion's business model and part of our
commitment to delivering the highest level of environmental compliance while managing and
monitoring the environmental impacts of our activities throughout the mining lifecycle.
There were no environmental incidents recorded during the September 2023 Quarter.
Prieska Mine Development and Exploration
Human Resources
As PCZM moves towards trial mining and continuous operations, the permanent team has transitioned
from a rotation shift working arrangement to being permanently site-based, as well as residing in the
nearby town of Prieska. The strategy remains to integrate PCZM employees within the Prieska community
and local economy. Given that specialist mining skills are currently not available locally, skills transfer
remains a high priority while the positive impact of disposable incomes being spent within the local
economy benefit the entire host community.
The first group of 20 local community candidates attended underground mining Competency B training
at the Murray & Roberts Training Centre in Carletonville during the Quarter. A second group is scheduled
for training in Q4 CY2023. The aim is to have a pool of local candidates available to feed into PCZM and
contractor mining positions as these become available, and as the mine moves towards full operations.
Critical Focus Items
During the Quarter, a number of critical items were addressed in preparation for trial mining and
dewatering at PCZM. These included:
• The Skyjack hoisting platform installed in the Hutchings Shaft has been upgraded and has been
approved by the DMRE as second escape from underground.
• A fixed underground refuge chamber has been built and commissioned on the 163 Level, allowing
30 people at a time to work safely underground.
• A second mobile refuge chamber increases the underground capacity to 50 persons at a time.
• Two engineering companies have been approached for the design, fabrication and installation
of ring back ladderways in the Marais Shaft as a further option for second escapeway to surface
and back-up to the Skyjack.
• Designs and plans for the self-build of a 15MVA Eskom grid connection sub-station expansion were
approved by Eskom.
• Detailed design and scheduling of work for trial mining of selected +105 Level blocks was
completed.
• Experienced South African mining contractor P2 Mining (part of Newrak Mining) was appointed
for the trial mining program.
• A 30,000 litre sample of underground water was sent to Trailblazer Technologies for pilot plant
testing of an ion exchange water purification process, with high value fertiliser as by-products.
• Installation of a 178m rising main dewatering steel pipe was completed in a large-diameter drill-
hole from surface to the 178 Level.
• The 7t Telehandler was delivered to site and operator training was completed.
Dewatering
The water depth is presently approximately 274m below surface. Primary dewatering will commence
once electrical power becomes available in Q1 CY2024 and a final decision has been made on the
underground water treatment method.
The submersible pumps for installation in the main Hutchings Shaft and the multi-stage pumps to be
installed on the 178-Level have been delivered to site and will be installed in Q4 CY2023.
The main dewatering bypass hole has been drilled and fitted with screwed 250mm diameter steel pipe
with flanged connections at both surface and the 178 Level. Drilling of the second hole to carry services
such as power cables and compressed air from surface to the 178 Level has also been completed.
Photo 1: Dewatering pumps.
Water treatment and purification options for the underground water are now being optimised into a two-
stage process to reduce capital and opex intensity, while achieving the same technical dewatering
solution within the design timeframe. The development of an early mining plan focussed on near to
surface material has reduced the need for high-rate early dewatering with the benefit of further cost
reductions.
Diagram 1: Anticipated water treatment and purification process.
The water treatment is now planned to progress in two phases, with the first phase focussing on volume
reduction and yield of water to agricultural standard. This first phase will utilise standard reverse osmosis
and evaporation as originally included in our PCZM BFS20. This treatment solution relies on readily
available equipment offered on hire for fixed term contracts. The concentrated brine waste will then be
temporarily stored in a contained, lined impoundment facility located within the footprint of the future
lined tailings dam.
A second phase of water treatment will then follow at a later stage, being less time sensitive and will focus
on the future treatment of brine temporarily stored in the lined facilities, to be treated to recover agri-
products and fertilisers as part of a potential joint venture with parties specialised on that industry.
The Phase One Reverse Osmosis (RO) plant is largely constrained, due to the downside of RO purification
producing a residual brine product containing 30% of the water treated and requiring very specific
storage in dedicated double-lined evaporation ponds. Orion has done extensive testwork over the past
year to identify methods to reduce high cost, permanent brine storage and rather harvesting the minerals
to produce agri-minerals and fertiliser and thereby potentially generating a by-product revenue stream
to defray water treatment costs.
The Phase Two methods under consideration are electrolysis and ion exchange to harvest the minerals
from the brine solution.
A "Rotowinner" electrolysis plant has been proven on trial basis on site, and a proposal has been received
from Rotowinner for a full-scale plant which is being commercially evaluated. This method recovers
relatively low-value agri-minerals and is less operating cost intensive than the RO option.
The second brine treatment method being considered is the Trailblazer ion-exchange plant. A 30,000-litre
sample of underground water has been treated by Trailblazer in their ion-exchange and fertilizer
manufacture pilot plant at their premises in Gauteng. The ion-exchange technology works by removing
all dissolved solids from the saline mine water and producing high-value fertilizer with clean water
available for agricultural use. There is also an opportunity to generate revenue from the sale of high value
potassium nitrate and ammonium sulphate fertilizer to offset infrastructure and treatment costs.
The early dewatering program is on track to complete installation of dewatering pumping at a rate of
100 m3/hr initially in Q1 CY2024, building up to 500 m3/hr by mid-year. Dewatering will commence with
the scheduled 15MVA Eskom power connection in Q1 CY2024 and the availability of a dedicated sub-
station to support the preferred water treatment plant.
Power Reticulation
The engineering design of the 15MVA electricity supply point sub-station extension has been approved
by Eskom for construction by Orion. PCZM have partnered with PPE Technologies (Power Plant Electrical
Technologies) for electrical specifications and electrical project management. The 15MVA upgrade is
scheduled to be completed by early 2024. In the meantime, the surface and underground electrical
reticulation is being project managed by PPE in readiness for the delivery of the long-lead items of the
15MVA upgrade.
The interim arrangement to increase the currently available electrical supply to 1MVA has commenced
with the delivery of the transformers to PCZM site and PPE managing the 11kV overhead powerline
installation and tie-in. The Medium Voltage (11kV) extension to the underground workings powers the
mining drills and ventilation fans for trial mining at the 105 Level and draw-point loading at the 143 Level.
Exploration
A program of shallow in-fill Reverse Circulation holes was completed. The purpose of the program was to
increase the amount of drilling data in the oxide Mineral Resource above the +105 Level supergene
sulphide Mineral Resource and to provide material for oxide leach test work purposes. This could facilitate
the evaluation of the open pit oxide mining concept. Thirty-two holes were drilled, totalling 1,286m
(Figures 1 and 3).
Figure 1: Drill holes – actual oxide hole positions.
Mineral Resources
An Independent Mineral Resource update for the +105m Level Crown Pillar block was completed during
the Quarter by Z Star Mineral Resource Consultants. The updated Mineral Resource Estimate incorporated
all 2022 drilling data and an updated geological interpretation (see Table 2 and Figure 1).
The update resulted in a significant increase in the +105 Mineral Resource to 2.3Mt at 1.7% Cu and 1.6%
Zn including an Indicated Resource of 1.9Mt at 1.82% Cu and 1.70% Zn (refer ASX/JSE release 25 July 2023).
This includes a significant increase in the oxide resource based on new more robust interpretations. The
updated Mineral Resource for the +105 block has resulted in an increase in the contained copper and
zinc metal by 11,000 and 300 tonnes respectively from the January 2019 Mineral Resource Estimate (refer
ASX/JSE release 15 January 2019).
The Prieska total Mineral Resource, reported and classified in accordance with the JORC Code (2012), is
now 31Mt grading 1.2% Cu and 3.6% Zn.
Table 2: Global Indicated and Inferred Mineral Resource Statement for the +105m Level Resource Block of the
Prieska Project.1
Cu Cu Zn Zn
Classification Mineralised Zone Tonnes
(tonnes) (%) (tonnes) (%)
HW Oxide 200,000 1,000 0.48 2,000 0.90
Oxide 490,000 4,000 0.81 4,000 0.73
Indicated Supergene Sulphide 1,100,000 28,000 2.58 22,000 2.06
Hypogene 120,000 1,000 1.23 4,000 3.78
Total 1,900,000 34,000 1.82 32,000 1.70
HW Oxide 30,000 100 0.4 300 1.0
Oxide 300,000 3,000 1.0 2,000 0.8
Inferred Supergene Sulphide 60,000 1,000 1.4 300 0.6
Hypogene 20,000 100 0.8 100 0.4
Total 400,000 4,000 1.0 3,000 0.8
+105m Level Mineral Resource Total 2,300,000 38,000 1.7 35,000 1.6
Note: +105m Level Mineral Resource bottom cut-off = 0.3% Cu. Tonnes are rounded to second significant figure, which may
result in rounding errors.
Figure 2: View showing the +105m Level Mineral Resource with the Supergene Sulphide Zone in red, the Hypogene
Sulphide Zone in purple, the main Oxide Zone in yellow and the HW Oxide Zone in green. The area between the
main Oxide and Supergene Sulphide zones is a leached (clay) zone (blue) with insignificant Cu and Zn values and
is excluded from the Mineral Resource. Brown represents the interpreted overburden.
Since the previous +105m Level Mineral Resource (refer ASX/JSE release 15 January 2019), 14 holes
comprising 918m were successfully drilled to intersect supergene sulphide mineralisation (refer ASX/JSE
release 11 July 2022). A further five holes were drilled and abandoned due to poor ground conditions
and unacceptable core loss.
Given the changes in the interpretation of mineralised domains, a direct comparison of the updated and
previous (2019) resource figures is difficult. The increase in overall tonnes can be largely attributed to the
1 Mineral Resource reported in ASX release of 25 July 2023: "Prieska Crown Pillar +105 Level Mineral Resource increases to 2.3Mt @
1.7% Cu and 1.6% Zn ahead of Trial Mining" available to the public on http://www.orionminerals.com.au/investors/asx-jse-
announcements/ . Competent Person Orion's exploration: Mr Paul Matthews. Competent Person: Orion's Mineral Resource: Mr Sean
Duggan. Orion confirms it is not aware of any new information or data that materially affects the information included above. For
the Mineral Resources, the Company confirms that all material assumptions and technical parameters underpinning the estimates
in the ASX release of 25 July 2023 continue to apply and have not materially changed. Orion confirms that the form and context in
which the Competent Person's findings are presented here have not been materially modified.
9
extension of the interpreted crown pillar mineralised zone towards the south-east to where it intersects
the sidewall of a sinkhole.
The more comprehensive interpretation of the mineralised zone in the hanging wall to the main crown
pillar mineralisation also contributes significantly to this increase in tonnage (and to that of the oxide
tonnage). The changes in the geological interpretation of the bottom of the oxide zone (particularly in
the north-west) have had a significant positive impact on the oxide tonnage.
The increase in copper can be largely attributed to higher grades in the south-east of the supergene
sulphide zone from the 2022 drilling, the extended interpretation of the crown pillar mineralisation to the
south-east and the changes in the interpretation of the bottom of the oxides.
Trial Mining
P2 Mining, (part of Newrak Mining – a company with more than 25-years of contractor mining experience)
has been appointed as mining contractor for the 6-month trial mining period.
The 6-month trial mining covers the following activities:
• Development of cross-cut ramp in competent footwall formations to access the Crown Pillar
Resource. Indicative total development 120m at 4.5m wide x 4.5m high;
• Development of 'reef drive' on strike in the supergene orebody. Indicative total development
300m at 3.0m x 3.0m; and
• Development of 2 x raises up-dip in ore to approximately 36m above reef drive at 2.0m x 2.0m
cross-section.
The aim of the trial mining project is to test conventional load-haul-dump and alternative underground
mining methods using continuous loaders matched with bi-directional trucks (Photo 2) with learnings and
efficiency improvements feeding into the revised mining BFS as well as 143, 201 and 259 Level draw-point
sampling exercise to evaluate the quality of broken ore remaining in old stopes in the upper areas of the
underground workings.
Photo 2: Trial mining equipment – at the PCZM project site.
Mining Fleet Secured for Trial Mining Phase
The mining fleet of vehicles and machinery secured for the trial mining phase at PCZM and will be on site
for the program is shown in the table below.
Item Description Quantity
LHD Aard 5.t 2
Dump Trucks 14 t low profile Fermel 2
Drill Rig Sandvik DD321 1
Utility Vehicle UV120 1
Continuous Loader ITC120N 1
Bi-directional drive Dump Trucks 20t Paus ITC 10 2
Metallurgical Process Re-evaluation and Early Concentrator Plant Design
Orion is in the process of engaging with various technical and turnkey process plant service providers for
the supply of a 30-60ktpm modular process plant to treat ore from the trial mining phase at PCZM. The
test work is being undertaken on supergene material as initial feed into the sulphide process plant being
designed.
Figure 3: Long Section showing supergene metallurgical holes and oxide drill holes.
Processing routes developed by Mintek in 2018 include hypogene milling, sequential copper (Cu)
flotation, zinc (Zn) flotation and ultra-fine grinding. However, opportunities exist to improve on the
processing route for the supergene sulphide portions of the deposit (+105 Level Crown Pillar).
Flotation testing of hypogene samples in line with historical recoveries of the mine achieved over 86%
recovery for both Cu and Zn, with Cu concentrate grades above 28% and Zn at 53% (refer ASX/JSE release
26 May 2020). Test work is now being progressed to assess the supergene sulphide recoveries from Locked
Cycle testing. The results of this test work will be incorporated into the Early Mining Plan and modular
process plant design. The plant will be designed to treat the different ore bodies in separated treatment
campaigns from surface stockpile material.
Mr Bryan Broekman, the previous Chief Metallurgist for Anglovaal Group – who was directly responsible
for most of the metallurgical process plant optimisations at Prieska Copper Mines to treat mixed oxide,
supergene sulphide and hypogene sulphide ores from 1988 until mine closure in 1991 – has been
contracted to oversee the two sets of supergene flotation test work currently undertaken by Enprotec
and MTEC Engineering respectively. The pilot plant tests are being undertaken on 1.5 tonnes of fresh
metallurgical samples drilled from four holes in the supergene sulphide zone of the +105 Resource blocks
(Figure 3). The test work has already commenced.
Mr Broekman has recommended testing a refined process flow that promises to deliver improved
recoveries and produce higher quality concentrates specifically from the ore sources in the upper levels
of the mine, above the current water level and targeted in the trial mining exercise.
Orion has also approached two different service providers for XRF and XRT ore sorting technology, to
allow for the concentration of ore after waste removal. The target material for ore sorting is the historical
surface waste rock dump and the ore from the historic stope drawpoints on 143, 201 and 269 levels.
Documented test work completed on both supergene and hypogene ore indicated both XRF and XRT
technologies can differentiate between ore and waste. Five sampling trenches have already been
excavated on the waste rock dump and material has been stockpiled for treatment on one of three
surface pad areas.
Okiep Copper Project Development and Exploration
Feasibility Study Report
The draft Feasibility Study Report was completed during the Quarter. This followed the finalisation of the
TSF engineering design report and updating of the project financial model to include the cost estimates
for the TSF construction and operation.
The Feasibility Study Report includes the revised Ore Resource Model, updated Mining Plan and schedule
and the completed TSF design. The draft report has been submitted for peer review.
Environmental Management
Water Use Licence Application (WULA)
The completion of the TSF design report facilitated the finalisation of the Integrated Water Use Licence
Application (IWULA) by ABS (Africa). The application was submitted to the Department of Water and
Sanitation (DWS) early in September, and a certificate of acceptance was received. Approval of the
WULA by DWS is anticipated in Q1 CY2024.
Tailings Storage Facility (TSF)
As previously reported, the TSF is planned to be located in an area impacted by prior mining operations.
The final design of the facility with the accompanying groundwater impact modelling shows that the
operation of the facility will have positive short and long-term impacts on the groundwater in the
immediate vicinity of the TSF.
In light of the expected improvement of groundwater quality in the vicinity of the TSF, the Project Team
expects the DWS will have a favourable view of the WULA.
Okiep Project Development
Metallurgical Processing Plant
The conceptual design and costing of the Processing Plant to feasibility level accuracy was completed
in the December 2022 Quarter. No further work in this area was undertaken during the Quarter and the
metallurgical portion of the Feasibility Study Design report has been finalised.
Mineral Resources
A review of the geological interpretation at Flat Mine North, Flat Mine East and Flat Mine South has
resulted in an improved definition of the mineralised zones together with an increase in the total Mineral
Resources.
At the end of August, Orion announced that Mineral Resources at Flat Mine North, Flat Mine East and Flat
Mine South now total 9.3Mt at 1.3% Cu for 130,000 tonnes of contained copper including a Measured
and Indicated Resource of 7.4Mt at 1.4% Cu. In addition to the previously announced Mineral Resource
of 2.5Mt at 1.4% Cu at Flat Mine (Nababeep), Jan Coetzee Mine and Nababeep Kloof Mine, this brings
the total Mineral Resources within the Flat Mines area of the OCP to 12Mt at 1.4% Cu for 160,000 tonnes
of contained copper. Other historical mines and prospects are currently being modelled, with the
potential to deliver further growth in the OCP Mineral Resource.
While this initial Resource has been used to support a foundation stage BFS and economic assessment of
the Okiep Copper Project, we see outstanding potential to further grow and upgrade the Mineral
Resources with in-fill drilling into areas with low drill density as well as drilling potential plunge and strike
extensions of the known deposits.
Table 3: Mineral Resources Statement for the Flat Mine North, Flat Mine East & Flat Mine South.
Table 4: Total Mineral Resources Statement for the Flat Mines area of the OCP.
Mine Planning
Following the Independent review of the Mineral Resources, the mine development layouts and schedule
were adjusted to accommodate the minor changes in stope shapes. The mine plans and report were
finalised and included in the Bankable Feasibility Report (BFS).
Infrastructure
As reported previously, the plans for the provision of power and water to the Flat Mines operations have
been finalised and incorporated in the BFS. No further work in this area is required currently.
Rehabilitation of the Nababeep waste-water-works by the local municipality is in progress, with
consultants appointed by the municipality to oversee the work. The refurbishing works required have been
put out to tender, and the appointment of contractors is imminent.
Discussions are underway with the Local Authority (NKM) technical department to finalise the
arrangements for the provision of construction power for the project development phase. This workstream
is planned as part of the early works programme to establish the provision of services in advance of the
project kick-off.
Communications with the NKM municipality executive team continue to be regular and cordial. The
Infrastructure Steering Committee, set up to manage the provision of power and water to the project via
the municipal infrastructure, continues to meet on a quarterly basis.
Land Access
As reported previously, access to the land on which the bulk of the surface mining infrastructure will be
located has been secured through a lease agreement with the local municipality. The Rezoning
Application for Mining Use will be submitted in the Q4CY2023, with the Engineering Services Report now
having been received.
The fact that the rezoning application applies to land owned by a NKM means that approval for the
rezoning does not require Department of Agriculture approval. The rezoning approval is therefore of
relatively short duration.
New Okiep Mining Company Permitting
During the Quarter, Orion received notice from the DMRE for the addition of five new "copper ore" and
"tungsten ore" areas to its existing tenement portfolio. This has increased the Company's tenement
holding west, south and east of the central Southern African Tantalum Mining (Pty) Ltd (SAFTA) mining
right area (red outlined area, Figure 4) by approximately 30,000 hectares (grey and orange shaded areas,
Figure 4).
Figure 4: Grey shaded areas showing three new S102 areas, orange areas showing three newly granted
prospecting rights.
Once executed, the grant of these additional areas opens up a number of exciting opportunities for
Orion to explore for potential copper and associated minerals to supplement the Flat Mines Project, which
is currently undergoing an Independent Expert's Review of the BFS, while also expanding its control over
several high-priority targets including the very important historical Nigramoep Mine.
Jacomynspan Project
Figure 5: Jacomynspan Project area map in the Northern Cape, South Africa.
The Jacomynspan Project offers the potential for a Class-1 nickel-copper-cobalt-PGE-gold open pit and
shallow underground mining project. The Namaqua Nickel Mining Right, which was granted by the DMRE
in September 2016, was notarially executed with the DMRE in December 2022. The right has been lodged
for registration with the Mineral and Petroleum Titles Registration Office. An Extension Letter of the Mining
Rights is under review, prior to submission to the DMRE in mid-November 2023.
Work continues to focus on planning for a trial mining exercise to generate a sufficiently sized
representative bulk sample to test innovative metallurgical refining/battery pre-cursor production at a
pilot scale. Orion has an exclusivity agreement with Stratega Metals (Pty) Ltd (Stratega) to undertake
amenability test work on a 250kg sample of Ni-Cu-Co-PGE-Au concentrates from the Jacomynspan
Project after the initial laboratory amenability test work on a sample of Jacomynspan concentrate
provided promising results.
Work during the Quarter has focussed on refining and updating a 2013 feasibility study for the project that
forms the basis of the approved mine works plan. Opportunities have been identified for improved water
management and inclusion of renewable energy power supply that presents significant upside
opportunity for the project.
Work was also progressed on water supply agreements from the Orange River and for related water use
licencing.
Stratega Metals Vapour Refining Project
A series of gram scale laboratory tests on chloro-vapour extraction of sulphur and metals are underway
to optimise thermodynamic conditions of the metal vapour process. These tests will determine the
thermodynamic and kinetic parameters for selective chlorination and extraction, metal gas transfer,
distillation, and carbonylation. The targeted outcome is the optimised refining configuration for
production of high value products such as pure elemental sulphur, separated metal products and
compounds and metal carbonyl powders.
The review process with an Independent Scientist have commence to evaluate and validate the
outcome of the test results. The next phase of the Amenability Test will consist of a larger sample (500g)
and will start after the verification of Stage gate 1 test results review.
Figure 6: High-level timeline for the Stratega Test Work.
As reported in the June Quarterly Report, Stratega have progressed discussions with electric vehicle (EV)
manufacturers which are potential end users of the metal vapour powder products to be produced.
One large European EV manufacturer has accepted Stratega onto its accredited supplier listing and has
expressed interest in funding a vertically integrated mine and refinery facility to produce its metal product
requirements.
Areachap Exploration
Areachap is an under-explored belt with multiple copper-zinc and nickel-copper-cobalt-PGE-gold
intrusive targets within Orion's tenements.
Chief among these are:
• the near-mine open pit and underground targets at Prieska with high-grade copper-zinc
intersections;
• several high-grade copper-gold targets with historical and recent drill-hole intersections; and
• lithium, beryllium and Rare Earth Element (REE) opportunities, which are currently being
investigated.
No exploration work took place during the Quarter.
Australian Projects
Fraser Range – Nickel-Copper Projects (Western Australia)
The Fraser Range Project is a belt-scale project highly prospective for high-value magmatic nickel-
copper-cobalt sulphide discoveries. ASX-listed IGO Limited is the dominant landholder in the Fraser Range
and owns the Nova Operation, which is mining and processing the Nova-Bollinger Ni-Cu-Co sulphide
deposit discovered in 2015.
Orion maintains a sizeable tenement package in the Fraser Range under a joint venture with IGO. In terms
of the joint venture, IGO is responsible for the exploration of all the tenements while Orion is free-carried
by IGO through to the first Pre-Feasibility Study. This allows Orion to maintain exposure to ongoing
exploration and development of the project, without any ongoing financial commitment.
During the September Quarter, IGO completed a rehabilitation across all tenements under the JV
agreement. In the coming Quarter, IGO intends to complete additional rehabilitation works on E28/2367
including tracks and collars. Desktop review of the tenements will continue into the coming Quarter.
Walhalla – Gold and Polymetals Project (Victoria)
While the Walhalla-Woods Point District is best known for gold mining, high-grade copper-nickel and PGE
mineralisation also occurs within the belt. Both the gold and copper-nickel-PGE mineralisation within this
district are hosted within dykes from the Woods Point Dyke Swarm, a series of ultramafic to felsic dykes
occurring over a 75km long north-south belt.
No field or exploration work was carried out on the Walhalla Project during the reporting period.
Corporate
Cash and Finance
Cash on hand at the end of the Quarter was $15.74 million. Payments made to related parties and their
associates during the Quarter was $145k for director fees and consulting fees, as listed in Section 6 of the
Company's Quarterly Cash Flow Report (Appendix 5B).
Project Funding
On 17 July 2023, Orion announced that it had taken another important step in advancing the funding
strategy for the PCZM after satisfying numerous substantive conditions required to commence drawdown
on project development funding facilities totalling ~ZAR370 million (~$30 million), being the IDC ZAR250
million (~$20 million), Convertible Loan and the Triple Flag $10 million Funding Arrangement.
Drawdown of the IDC Convertible Loan will be in tranches and will be pro rata matched by the
drawdown requests that Orion will make under the Triple Flag Funding Arrangement. In August 2023,
Orion received ~$13.8 million in cash from the initial drawdown of the IDC Convertible Loan Facility and
the Triple Flag early Funding Arrangement.
Orion's flagship Prieska Copper Zinc Mine (PCZM) is transitioning to the mine development and
construction phase following the conclusion of the key elements of an overarching strategic funding
package.
This funding package allows Orion to progress the development of the PCZM, including the
commencement of trial mining and processing of ore, mine dewatering and the completion of feasibility
studies for the PCZM Early Production Plan.
The PCZM Early Production Plan, which was first announced in January 2022 (refer ASX/JSE release 20
January 2022), brings forward revenue generation and potentially reduces the upfront external peak
funding requirements by phasing the mine build while retaining the option to scale-up to the full-scale
project (as outlined in the Bankable Feasibility Study published in 2020, refer ASX/JSE release 26 May 2020)
as sufficient funding becomes available. The BFS for the Early Production Plan for the PCZM is well
advanced, with targeted completion in mid-2024.
IDC – Convertible Loan
In February 2023, Orion and the Industrial Development Corporation of South Africa Limited (IDC) signed
definitive agreements for a ZAR250 million (~$20 million) senior secured loan facility (IDC Convertible Loan)
to fund early mining works and key pre-development activities at the PCZM. Under the terms of the IDC
Convertible Loan, the IDC will provide the ZAR250 million to Agama, or its wholly-owned subsidiary, which
will be on-lent to PCZM on similar terms to fund the completion of the Feasibility Study for the previously-
articulated Early Production Plan at Prieska (refer ASX/JSE release 20 January 2022), while also allowing
the Company to commence dewatering of the existing underground mine – a critical path activity
required for the broader long-term development of the project.
A summary of the material terms of the IDC Convertible Loan definitive agreement is provided in
Appendix 1 of the 8 February 2023 ASX/JSE release.
Triple Flag – Precious Metal Stream and Funding Arrangement
In December 2022, Orion announced that it had signed definitive agreements with Triple Flag Precious
Metals Corp. (TSX/NYSE: TFPM) (with its subsidiaries, Triple Flag) for a US$87 million (~$127 million) secured
funding package for PCZM made up of a precious metals stream (Precious Metal Stream) and an
additional early funding arrangement (Funding Arrangement).
The Precious Metal Stream, which comprises US$80 million (~$117 million) of funding to be drawn down in
tranches, alongside other bank and/or third-party funding during mine development, is conditional on
the mine development being fully funded, finalisation of an executable mine plan to Triple Flag's
satisfaction, South African regulatory approvals, and fulfilment of drawdown conditions standard for such
arrangements.
Triple Flag will also provide an additional $10 million (~US$7 million) Funding Arrangement, to complete
the Early Production Plan BFS and Dewatering Project.
Under each of the Precious Metal Stream and the Funding Arrangement, PCZM and other obligors will
agree to grant a first ranking security in favour of Triple Flag and the IDC over certain assets and claims
related directly and indirectly to the Project, with the security in respect of the Precious Metal Stream to
be subordinated to Prieska Project financiers on terms to be agreed in an intercreditor arrangement that
is consistent with the principles set out in the Precious Metal Stream agreement.
A summary of the material terms of the Triple Flag definitive agreements is provided in Appendix 1 of the
13 December 2022 ASX/JSE release.
Annual General Meeting
The Annual General Meeting of shareholders of Orion will be held at the offices of Clayton Utz,
Level 27, QV1 Building, 250 St Georges Terrace, Perth, Western Australia on Tuesday, 28 November 2023,
commencing at 3:00 p.m. (AWST).
31 October 2023
JSE Sponsor
Merchantec Capital
Tenement Table
Ownership Change in
Tenement Project Joint Venture Partner
Interest Quarter
South Africa
NC30/5/1/1/2/11850PR
Bartotrax 100% --- ---
NC30/5/1/1/2/13528PR1
NC30/5/1/2/2/10138MR Prieska Copper-Zinc 70% --- ---
Mine
NC30/5/1/2/2/10146MR Prieska Copper-Zinc 70% --- ---
Mine
NC30/5/1/1/2/12257PR Prieska Near Mine-OE5 100% --- ---
NC30/5/1/1/2/12258PR Prieska Near Mine-OE5 100% --- ---
NC30/5/1/1/2/12287PR Prieska Near Mine-OE5 100% --- ---
NC30/5/1/1/2/12405PR Prieska Near Mine-OE5 100% --- ---
NC30/5/1/1/2/11840PR Doonies Pan 70% --- ---
NC30/5/1/2/2/10032MR Namaqua-Disawell 25% --- Namaqua Nickel Mining (Pty) Ltd
NC30/5/1/1/2/12216PR Namaqua-Disawell 25% --- Namaqua Nickel Mining (Pty) Ltd
NC30/5/1/1/2/10938PR Namaqua-Disawell 25% --- Disawell (Pty) Ltd
NC30/5/1/1/2/13397PR1
NC30/5/1/1/2/11010PR Namaqua-Disawell 25% --- Disawell (Pty) Ltd
NC30/5/1/1/2/13398PR1
NC30/5/1/1/2/12292PR Masiqhame 50% --- Masiqhame 855 (Pty) Ltd
NC30/5/1/1/2/12197PR Boksputs North 70% --- ---
NC30/5/1/1/2/11125PR
NC30/5/1/1/2/13395PR1 Okiep 100% --- ---
NC30/5/1/1/2/12357PR Okiep 100% --- ---
NC30/5/1/1/2/12897PR Okiep 70% --- ---
NC30/5/1/2/2/10150MR Okiep 56.25% --- Industrial Development Corporation
of South Africa Limited (IDC)
NC30/5/1/1/2/12850PR Okiep 56.25% Granted Industrial Development Corporation
of South Africa Limited (IDC)
NC30/5/1/1/2/12852PR Okiep 100% Granted ---
NC30/5/1/1/2/12854PR Okiep 100% Granted ---
Western Australia
E28/2367 Fraser Range 30% --- IGO Limited
E28/2596 Fraser Range 30% --- IGO Limited
E39/1653 Fraser Range 35% --- IGO Limited & Geological
Resources Pty Ltd
E39/1654 Fraser Range 10% --- IGO Limited & NBX Pty Ltd
Victoria
EL6069 Walhalla 100% --- ---
EL5042 Walhalla 100% --- ---
This Quarterly Report is authorised by the Board.
Date: 31-10-2023 09:01:00
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