Orion Minerals confident it can unlock base metals potential in NC

ORION Minerals managing director and CEO Errol Smart said this week: “I believe Orion is now well on its way to achieving its goal of unlocking the incredible base metals potential in the Northern Cape.”

In its quarterly update released on Tuesday, the group said it made significant progress in the quarter, finishing the year with a series of important funding.

Key achievements during the December quarter included securing a funding package to progress pre-development activities at the Prieska copper-zinc project and the completion of permitting and early-stage funding for our second base metals hub at the Okiep Copper Project.

These milestone funding arrangements also saw the introduction of the Industrial Development Corporation as a new development partner at Okiep, Smart said.

“The combined pre-development funding being provided by Triple Flag and the IDC for Prieska now totals over R350 million. This will provide funding for Orion to carry out demonstration trial-mining and allow de-watering to commence from underground mine workings.

“Both of these work streams are critical to our early works BFS, which we expect to complete by mid-2023, and marks the official start of development at PCZM,” Smart said.

Orion was entering an exciting phase of its development.

According to the group, the Prieska copper-zinc project development has several key work streams that progressed during the quarter as part of formulating the early production plan for the Prieska copper-zinc project.

“The new plan brings forward revenue generation and potentially reduces the upfront external peak-funding requirements by phasing the mine build while retaining the option to scale up to the full-scale BFS-20 project as sufficient funding becomes available,” it said.

Base metals prices continued their upwards trajectory during the December, 2022 quarter on the back of the relatively bullish sentiment, although the movement was not uniformly upwards.

“Copper remains volatile, having seen over $1 000 (R17 433) per tonne variation in the past three months, ranging from a low point of $7 420 per tonne in mid-october to a high of $8 537 per tonne in early December. It started the quarter on $7 647 per tonne and remained steady at $8 381 per tonne in mid-december,” it said.

Zinc prices fell to a threemonth low of $2 682 per tonne in early November and have rallied since, reaching a quarter high of $3 288 per tonne in mid-december.

“Nickel prices started the quarter low at $22 245 per tonne and peaked at $31 075 per tonne in the first week of December, before easing off to $28 800 per tonne in mid-december, 2022.

The group said Fitch Ratings, however, had kept their copper assumptions unchanged, reflecting “softer market sentiment linked to the global economic slowdown in 2023, offset by supportive short and medium-term supply-demand drivers”.

The same also remains the case for zinc, noting “smelter and refining bottlenecks that kept the market tight in 2022 will continue in 2023, despite growing mine supply”.

Orion said concentrates surpluses would remain until 2024, when new Chinese smelting capacity came onstream, alleviating refined metal scarcity.

Nickel bucks this trend, with an increased price assumption for 2023 that “reflects a price rally in a rather illiquid and volatile market, although our fundamental views on supply and demand remain unchanged”, it said.