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 12 million tonnes grading 1.4% Cu for 159,000 tonnes of contained Cu. 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 Mine, also located in the Northern Cape Province.

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 Cu 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 July 2021, 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.The draft Bankable Feasibility Study was completed and submitted for independent peer review in the third quarter of 2023.

The draft Bankable Feasibility Study was completed and submitted for independent peer review in the third quarter of 2023.

The Mining Right over the Flat Mines Area was granted in July 2022 and executed in December 2022.

Pre-development funding

Pre-development funding for the Okiep Copper Project has been secured through an agreement with the Industrial Development Corporation of South Africa (IDC), under which the IDC acquired 43.75% of the New Okiep Mining Company (NOM) from Orion (with Orion retaining the remaining 56.25% interest).

The IDC funding of pre-development costs in the amount of ZAR35 million (~AUD3.1 million) have been advanced to NOM on the same terms as the pre-development funding amount of ZAR44 million (~AUD3.9 million) that Orion has already advanced to NOM.

NOM is acquiring the Prospecting Rights and the recently granted Mining Right at Okiep from Southern African Tantalum Mining Proprietary Limited (SAFTA), in which the IDC is currently a 43.75% shareholder.

Upon NOM acquiring the SAFTA assets, the IDC will sell 22.22% of its shares in NOM to a Black Economic Empowerment (BEE) company, being a BEE Entrepreneur entity led by Lulamile Xate, to further the Historically Disadvantaged South Africans (HDSA) ownership objectives of the Mining Charter 2018.

Thereafter, Community and Employee Trusts will each acquire a 5% meaningful economic participation interest in NOM, resulting in a 30% meaningful economic participation interest being held by HDSA’s, consistent with the HDSA ownership objectives of the Mining Charter 2018.

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, which hosts numerous historical high-grade intercepts.

Orion’s successful maiden drilling program on the Koperberg-Carolusberg Line confirmed historically reported drill results and highlighted the presence of significant shallow mineralisation, with highlights including

• 7.76m at 1.94% Cu from 29.7m including 4.1m at 2.01% Cu from 33.3m in OKED064; and
• 9.02m at 1.45% Cu from 103.08m including 5.9m at 1.86% Cu from 103.08m in OKWED068.

(Read latest OCP drill program release).

A major SkyTEM™ survey to define high-priority targets for undiscovered mineralisation was completed in 2021, with exploration activities underway using SKYTEM™ magnetic and EM data together with geological and structural interpretive work.

In addition, digital compilation of historical drilling information over various old mines and prospects continues, together with the remodelling of the mineralisation with the aim of re-estimating the Resources.