PRIESKA COPPER-ZINC PROJECT
Orion is focusing on the development of the Deep Sulphide Resource, currently comprising 28.73Mt at 1.2% Cu and 3.8% Zn, which underpinned a highly successful Bankable Feasibility Study (BFS) completed in June 2019.
The BFS is based on modern 2.4Mtpa underground and open pit mining operation, with a 10-year ‘Foundation Phase’ delivering payable metal production of 189kt of Copper and 580kt of Zinc in differentiated concentrates. Read the full BFS Announcement.
The BFS delivered strong project economics including:
- Undiscounted free cash-flows of AUD1.1 billion pre-tax (AUD819M post-tax).
- NPV of AUD574M pre-Tax (AUD408M post-tax) at an 8% discount rate.
- IRR of 38% pre-Tax (33% post-tax).
- Peak funding requirement of AUD378M.
- Payback period from first production of 2.9 years.
- All-in-sustaining margin of 44%.
- All-in-sustaining unit costs of AUD5,470/t (USD3,773/t) of copper equivalent metal sold.
The BFS included a maiden Ore Reserve of 13.62Mt at 1.1% Cu and 3.2% Zn for 143kt of contained copper and 433kt of contained zinc, with the mine schedule comprising 65% Probable Ore Reserves and 35% Inferred Minerals Resources.
In addition, the BFS identified outstanding mine plan optimisation and extensional opportunities including:
- Over 9Mt at 1.1% Cu and 3.6% Zn of Mineral Resources not included in the current mine plan.
- Existing mineralised pillars being assessed for future extraction.
- Potential additional cashflows from barite and pyrite by-products.
- High grade drilling intersections on the periphery of the deposit.
- Significant identified satellite deposit potential within an emerging VMS camp.
Since the completion of the Prieska BFS, Orion has been progressing value engineering and optimisation work with the aim of delivering an improved and simple-to-execute project plan with enhanced CAPEX and OPEX outcomes.
Key studies currently in progress include:
- Water treatment trials investigating supplementary means of dealing with the water to be pumped out from the underground workings so that the dewatering timeline and costs can be reduced;
- Value engineering of the ore processing plant designs and layouts to improve operational factors and reduce both capital and operating costs; and
- Mine-to-market enterprise optimisation of the Foundation Phase mining plan, in order to holistically assess the key value drivers of the project and ensure that the best business scenario is selected for project execution.
Positive results have been received from water treatment trials for the shaft water to be purified for off-site discharge. This would enable increased pumping rates which would accelerate planned project development timelines.
In addition, test work has also indicated the potential to utilise semi-autogenous (SAG) milling, rather than conventional ball milling, to reduce processing plant capital and operating costs.
In parallel with the BFS optimisation, Orion is continuing to fast-track the Prieska development, with other key steps including:
- Progressing project financing discussions;
- Progressing project implementation planning; and
- Negotiating agreements with concentrate off-take partners and key suppliers
Orion Minerals is also progressing other key commercial work streams including concentrate marketing, project financing as well as the completion of project permitting.
The Environmental Authorisation for Prieska was awarded in July 2019 paving the way for the award of the Mining Right, which represents the final permit required to commence project construction.