Projects

Prieska Copper Zinc Mine

The Prieska Copper Zinc Mine (PCZM) is the centrepiece of Orion’s future-facing metals portfolio. Historically mined between the 1970s and 1990s, Prieska is one of the world’s top-30 volcanogenic massive sulphide (VMS) base metal deposits, with a recorded historical production of over 430k tonnes of copper and 1Mt of zinc from 46.8Mt of sulphide ore milled.

Location and Infrastructure

PCZM is in the Northern Cape Province of South Africa, 270km south-west of the regional capital Kimberley. Importantly, the project has access to significant local and regional infrastructure, including:

  • Sealed access roads to the project site
  • 50km via bitumen road to existing rail siding
  • Four high-voltage regional lines linked to the national electricity grid
  • 175MW operational solar power plants in the area – with an additional 675MW approved and a further 300MW pending authorisation
  • 800km rail link to a major, bulk commodity and deep-water ports at Coega and Saldanha Bay
  • Bulk water pipeline supplies the site from the Orange River with all-year-round pumping capacity
  • Good contractor accommodation available in the private village of Copperton, ~3km from the project site
  • Low environmental sensitivity – existing disturbed/rehabilitated mine footprint

Resources

PCZM contains a globally significant VMS resource totalling 31Mt at 1.2% Cu and 3.6% Zn including Indicated Mineral Resources of 20.00Mt at 1.22% Cu and 3.47% Zn and an Inferred Mineral Resources of 11Mt @ 1.2% Cu and 3.9% Zn for 130kt of contained Cu and 420kt of contained Zn (refer to ASX/JSE release 25 July 2023) (refer to ASX/JSE release 28 March 2025). Probable Ore Reserves at PCZM total 15.6Mt at an average grade of 1.1% Cu and 3.1% Zn, resulting in 164kt of contained Cu and 458kt of contained Zn. Resources remain open with both strike extensions and up-folded limb extensions identified by down-hole geophysics.

Development Strategy

To capitalise on the positive near-term outlook for the base metals market, Orion released its Definitive Feasibility Study in March 2025 (refer to ASX/JSE release 28 March 2025) outlining a two-phased development strategy aimed at de-risking the development pathway and fast-tracking value-creation.

The plan is designed to accelerate revenue generation and potentially reduce the upfront external peak funding requirements by phasing the mine build while retaining the ability to scale up to a full-scale project as sufficient funding becomes available.

Upper-Level Phase – This phase is based on mining near-surface supergene sulphide ore, which is accessible from an existing decline.  First production is expected 13 months after the start of construction and would continue for 4.3 years.

The Deeps Phase – This phase will commence following completion of mine de-watering, refurbishment of the main shaft and construction of the mining infrastructure. Mining of the Deeps has a life of mine (LoM) of 11 years and will overlap with the last 2.2 years of the Upper-Level mining. This gives a combined LoM of 13.2 years.

Early production plan and trial mining

Trial mining took place over seven months at PCZM with a development mining team to test mining efficiency and prepare for future, longer-term mining operations in the Upper Levels. The trial mining was also aimed at confirming geological contacts, distribution of mineralisation across the mineralised units, and to confirm forecast Cu and Zn grades. These results improved the mine planning that was carried out for the Upper Levels area.

A revised mine sequence to extract the mine’s crown pillar (+105 Level Crown Pillar), which currently sits above the accumulated water level, first using underground mining methods. Extraction of the +105 Level Crown Pillar was originally planned to occur at the end of the mine life using open-pit mining. Mining the crown pillar upfront offers the potential advantage of earlier concentrate production and allows for dewatering to be undertaken at lower pumping rates and concurrently with early revenue generation from crown pillar mining.

The potential opportunistic extraction of the mineralised pillars left behind from previous mining and located above the accumulated water level. Production from the remnant pillars could supplement the early mining and defer the need to access the Prieska Deeps Deposit.

Project Funding

PCZM signed a non-binding term sheet with a wholly owned subsidiary of Glencore plc for financing of US$200 million to US$250 million and concentrate offtake for the Prieska project (refer ASX/JSE release 28 March 2025).

 The financing will be made available to PCZM in two tranches:

  • Tranche A of US$40 million to be used for the construction and startup of the Uppers at Prieska;
  • Tranche B of US$160 million – US$210 million to be used for the construction and startup of the Deeps at Prieska, of which up to US$50 million may be drawn early to commence early works on the Deeps, based on certain conditions being fulfilled.

The Early Development Strategy is underpinned by a ZAR250 million (~A$20 million), senior secured, convertible debt funding facility secured with the Industrial Development Corporation of South Africa Limited (IDC) and two funding instruments secured from certain subsidiaries of Triple Flag Precious Metals Corp. (TSX/NYSE: TFPM) (collectively TF R&S Canada Ltd. and Triple Flag International Ltd., (Triple Flag) for an early funding arrangement (Funding Arrangement) facility of A$10 million to fund trial mining and dewatering and a precious metals streaming agreement (Precious Metal Stream) of US$80 million to be available for the development of commercial operations following completion of a revised bankable feasibility study (BFS) and demonstration of Orion having secured sufficient development finance.

Orion has fulfilled all conditions precedent for the ZAR250 million IDC Convertible Loan and other conditions to the Triple Flag A$10 million Funding Arrangement, enabling it to submit drawdown notices to both the IDC and Triple Flag for an initial drawdown totalling ZAR167 million (~A$13.8 million) (refer ASX/JSE release 17 July 2023).

Key financial outcomes

  • Net Present Value (NPV) (at an 8% discount rate) of:
    • Pre-tax: AUD797 million (ZAR9,966 million),
    • Post-tax: AUD568 million (ZAR7,105 million);
  • Internal Rate of Return (IRR) of 31% pre-tax (26% post-tax);
  • Payback period from start of construction of 5.8 years;
  • Peak funding requirement of AUD578 million (ZAR7,230 million);
  • Total project capital expenditure (including contingency) of AUD607 million (ZAR7,592 million);
  • Capital intensity of USD9,174/t annual copper equivalent production, to achieve nameplate annual Cu production of 22ktpa and Zn production of 65ktpa;
  • All-in-sustaining costs of USD4,550/t (USD2.06/lb) of copper equivalent metal sold;
  • All-in-sustaining cost net of by-product credits of USD2,359/t (USD1.08/lb) of payable copper sold;

Exploration

Orion sees the potential to define a major new VMS camp in the region surrounding the Prieska deposit, with near-mine exploration programs delivering a series of compelling new targets.

These include the emerging Ayoba VMS discovery, located 5.3km south-west of Prieska, where the discovery drill hole intersected 9.5m of massive sulphides grading 0.63% Cu and 0.93% Zn, including 1.50m at 0.89% Cu and 4.98% Zn. (refer ASX/JSE release 28 November 2018).

Ayoba represents the first new VMS discovery in the Areachap Belt in over 36 years and highlights the enormous upside over and above the large, high-quality Mineral Resource already defined at Prieska.

Geophysical surveys have also identified numerous compelling targets for both VMS-style copper-zinc mineralisation and nickel-copper sulphide mineralisation within a 15km radius of Prieska.

VMS deposits generally occur in clusters in proximity to one large or giant deposit and often comprise two or three medium-sized deposits and five or six smaller deposits.

Despite Prieska being one of the single largest VMS exhalite bodies known in the world, the area around the deposit has had virtually no exploration in over 36 years. Now, with the application of advanced, modern geophysics and the latest geological thinking, Orion can vector into targets which offer outstanding opportunities for new VMS discoveries.