Orion eyes Prieska funders
Orion Minerals is assessing various potential strategic investors in the resumption of zinc and copper mining at its mothballed Prieska mine in the Northern Cape as one of a variety of financing options, CEO Errol Smart said on Thursday.
Orion Minerals is assessing various potential strategic investors in the resumption of zinc and copper mining at its mothballed Prieska mine in the Northern Cape as one of a variety of financing options, CEO Errol Smart said on Thursday.
Orion, which is listed in Johannesburg and Sydney, hoped to secure its mining right in the first quarter of 2019 and complete its bankable feasibility study by June 2019, two key items it needed to finalise the financing model for the remote mine and processing plants, Smart said in an interview.
“There are some strategic partners who are showing an interest and have a benefit. We are speaking to them, but we are set up to run this thing alone if there’s no better alternative,” Smart said.
“The financing plan will be debt and equity, in all probability, but there are some other innovative ways to fund this without raising equity. We hope that, with our mining right in hand by mid-2019, we can break ground next year for construction.”
The Prieska mine operated for two decades but was stopped in 1991, leaving a large, untouched resource underground that Orion plans to extract, using highly mechanised and automated processes, minimising labour on the mine.
Orion is in advanced talks with Transnet about options to move a train loaded with containerised concentrate every two or three days to one of SA’s six harbours, with the company’s preference being Port Elizabeth or Cape Town, but with the parastatal asking it to consider Durban or Richards Bay.
The decision will depend on cost and customer demand for the two streams of concentrate containing either zinc or copper, with the latter containing enough gold and silver to be a valuable by-product for Orion.
Smart is insistent that while Orion will use existing shaft infrastructure, there are no other legacy issues to bedevil its plans to create a modern mining operation that is not hampered by the social and labour conditions that affect other SA mines.
The closest community to Prieska was 65km away, so there were no issues around having to move homes or families, and the planned levels of mechanisation meant there would be a small, highly skilled workforce earning good wages.
Orion is testing the use of the chemical sodium meta-bisulphate in its processing plant instead of sodium cyanide, making the process of extracting more environmentally friendly.