Orion consolidates ownership of Northern Cape project


Orion consolidates ownership of Northern Cape project

Published Date: 2020-07-14 | Source: Stephen Gunnion | Author: Stephen Gunnion

Orion consolidates ownership of Northern Cape project

Minority shareholders in the Jacomyspan nickel-copper-PGE project will exchange their interests for shares in Orion.

Orion Minerals has struck a deal to buy the remaining minority interest in its Jacomynspan nickel-copper-PGE (platinum group elements) project in the Northern Cape. Jacomynspan is located 65km north of its flagship Prieska copper-zinc project, with the potential to create a mining hub in the region.

The Australian minerals exploration and development company said it was buying the remaining interests from Namaqua Nickel and Disawell in exchange for $750,000 worth of its own stock, taking its stake in the project to 70% and making them Orion shareholders. Its black economic empowerment partners, staff and employee trusts will hold the balance.

Orion entered into a binding earn-in agreement with the two minority shareholders of the Jacomynspan project in 2017 and has since then advanced exploration programmes on the project.

In May, Orion Minerals said an updated bankable feasibility study (BFS) for nearby Prieska delivered a number of improvements on a previous study last June, including a 43% increase in undiscounted free cash flow to A$1.6 billion (R18.6 billion), a five-month reduction in the capital payback period to 2.4 years and a 9% increase in peak funding requirements to A$413 million to cater for the operational improvements. The life of mine was extended by two years to a duration of 12 years.

Following the release of the study, Orion said it would advance project financing discussions, implementation planning, and agreements with service providers for key early works activities at the mine. It said the project's low exposure to imported materials and foreign labour reduced construction challenges as the world overcame and recovered from Covid-19.

Prieska is recorded as one of the world's top 30 volcanogenic massive sulphide ore deposits. The mine was formerly owned by Anglovaal and operated from 1971 to 1991 when it was closed. It had historic production of over 430 000 tonnes of copper and a million tonnes of zinc. The area around the mine has major infrastructure in place, including power, water, road and rail access, and accommodation.

Orion's shares closed 3.9% higher at 27c yesterday.

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