Orion Minerals Ltd. announced the positive outcomes of a Bankable Feasibility Study (BFS) for the Foundation Phase of its Prieska copper-zinc project, located in the Northern Cape Province of South Africa. The BFS highlights the Prieska project as a long life, high-margin copper and zinc development project, with opportunities for future growth.
“We are delighted with the results of the BFS, which confirm the quality and scale of the Prieska project and put Orion firmly on track to become a major new South African base metal producer,” said Orion Managing Director and CEO Errol Smart. “The BFS suggests that Prieska will deliver $1.1 billion of pre-tax free-cashflow, a pre-tax net present value (NPV) of $A574 million at an 8% discount rate and an all-in-sustaining margin of 44% during the 10-year foundation phase of the project.”
The NPV is based on long-term forecast metal prices of $6,834/mt ($3.11/lb) for copper and $2,756/mt ($1.25/lb) for zinc. The estimated capital payback period is just under three years from first production.
The Foundation Phase runs for 10 years of run-of-mine production at a design ore processing rate of 2.4 million metric tons per year (mt/y). This phase exploits the portions of the Prieska deposit that were upgraded to indicated and inferred mineral resources from the first surface-based drilling campaign conducted between 2017 and 2018. The production target is composed of 65% probable ore reserves and 35% inferred mineral resources, with ore reserves predominating during the early stages of the mining plan.
Both underground and surface mining methods are planned to be used in conjunction with conventional froth-flotation concentration to produce differentiated copper and zinc concentrates for export.
Peak funding requirements amount to $A378 million including a 10% contingency allowance. This would occur in the third year of the capital expenditure (CAPEX) program. CAPEX incorporates establishment costs for open-pit mining, which is planned at the end of the Foundation Phase. Payback is planned to occur five years from the start of construction or 2.9 years from the start of production.
Unit all-in-sustaining costs (AISC) over the duration of the Foundation Phase would be $1.72/lb copper equivalent metal sold. The realized price (net of smelter charges) would be $3.08/lb copper-equivalent metal sold, yielding in the order of a 44% all-in-sustaining margin. The operating break-even grade is estimated at 1.2% copper equivalent, well below the ore reserves grade of 2.1% copper equivalent, applied in the production schedule.