Projects

Okiep Copper Project

Overview

The Okiep Copper Project (OCP) is located in the Northern Cape Province of South Africa, approximately 570km north of Cape Town and 450km west of the Company’s flagship Prieska Copper-Zinc Project.

The Project comprises the core of a premier historical copper district that produced >2Mt of copper over a 150-year period ending in 2003.

Orion signed an Option Agreement to acquire the OCP in February 2021 and immediately commenced due diligence programs to support the proposed acquisition. As part of this work, Orion reviewed historical Mineral Resource Estimates and completed a Scoping Study which confirmed the economic merits of developing a foundation-phase mining operation based on an initial six deposits.

Based on these results, Orion exercised its option to acquire the OCP in July 2021 and is now progressing further feasibility studies for the foundation phase development, as well as conducting exploration programs to further expand its Resource and Reserve inventory.

The mineral rights held by Orion include numerous existing drilled copper orebodies including some with decline mine access and services in place.

In addition to its acquisition of the OCP, Orion has also acquired an extensive historical database of mining and exploration records from the Okiep Copper Company covering more than 60 years.

Resources

Total JORC Mineral Resources at the OCP currently stand at 11.5 million tonnes grading 1.4% copper for 159,000 tonnes of contained copper. This resource estimate covers an initial six deposits and is based on a detailed review of historical drilling data and subsequent geological modelling. Orion sees excellent potential to further expand this resource base through the ongoing analysis of the OCP extensive historical exploration database, as well as through the Company’s own exploration programs.

Development Strategy

The OCP has delivered significant historical copper production with previous owners, such as Newmont and Goldfields, producing 30,000 to 40,000 tonnes of copper metal per annum over many decades. Orion believes there is a compelling opportunity to re-establish this scale of production following the completion of further drilling and feasibility work.

However, in the near-term, Orion will focus on a smaller proof-of-concept-scale copper mining operation at the OCP. The Company completed a Scoping Study for a proof-of-concept mining operation in May 2021 as part of its due diligence program to acquire the Okiep Project, with results from the study confirming that:

  • Okiep-style deposits have potential to be mined at low cost by both open pit and underground mining methods;
  • potential exists to rapidly advance the project to production, with critical permitting processes already underway;
  • a proof-of-concept-scale operation requiring low upfront capital investment can provide commercially attractive returns and early cashflows; and
  • potential exists to identify significant operational synergies with the fully permitted Prieska Copper-Zinc Project, also located in the Northern Cape Province, which now awaits funding before mine construction commences.

The Scoping Study indicates the potential to establish a financially robust foundation-phase copper mining project with:

  • First production possible within 16 months of the start of construction;
  • average annual undiscounted free cash flows of AUD32 million post-tax;
  • all-in-sustaining costs of USD4,478/t (USD2.03/lb) of copper sold;
  • all-in-sustaining margin of 40%;
  • break-even grade of 0.8% Cu for both un-optimised open pit and underground mining operations. This is well below the Mineral Resource grades of the deposits considered in the Scoping Study and the historical head grades typical of the Okiep Copper District;
  • peak funding requirements of AUD58 million (including 15% contingency); and
  • peak annual production of 9kt of copper-in-concentrate, potentially supplementing the 22kt a year of copper production planned from Orion’s flagship project, the Prieska Copper-Zinc Project.

The life-of-mine for the proof-of-concept foundation phase is modelled for 12 years, during which time concurrent exploration and mine expansion scenarios will be planned and potentially implemented.

Only Mineral Resources from the Flat Mines area of the greater Okiep Copper Complex (OCC) are incorporated in the foundation-phase plan, leaving significant potential for future expansion scenarios to be considered.

Following its decision to exercise its option to complete the OCP acquisition in August, Orion has now commenced further feasibility studies for the development of a proof-of-concept scale mining operation at OCP in line with the parameters outlined in the May 2021 Scoping Study.

Exploration

Following the successful due diligence programs at the OCP, which validated approximately 25% of the historical Newmont/Goldfields-era Okiep Copper Company (OCC) resource estimates of un-mined mineralisation, Orion is now pressing ahead with confirmation drilling to validate the remaining database, initially targeting near-surface mineralisation close to major infrastructure and existing mine development.

The first drill targets are on the historical Koperberg-Carolusberg line, where the OCC database that has been acquired reports high-grade intercepts.

A major SkyTEM™ survey to define high-priority targets for undiscovered mineralisation has recently been completed. Initial interpretation and generation of targets is underway.