Orion Minerals says copper project will not fail

AFTER the best part of a decade of planning, Orion Minerals is determined to make a success of its Prieska Copper Zinc Mine with its CEO promising “high-end governance” as the focus falls on project execution.“We’re embarking on this with high-end governance,” said Tony Lennox. “And when I say high-end, I don’t mean over the top. We’re not flying by the seat of our pants.”Lennox was commenting on September 17 shortly after Orion unveiled a financing and offtake deal for PCZM with Glencore worth up to $250m.PCZM is situated in South Africa’s Northern Cape province which is where another copper project backed by Copper 360 has run into serious difficulties, potentially endangering the  the company.As with Copper 360, Orion’s PCZM is development of previously worked mine in a province recognised for its minerals promise, but short on delivery.Lennox acknowledges there may be scepticism but said the market would soon see the extent to which Orion intends to make its promises stick. A project director will soon be announced and there are plans for implement “value engineering”.“As you would appreciate in feasibility studies there is a high degree of estimation, and sometimes you get sugar-coating of things,” he said.“So the value engineering is looking at what the function is fundamentally trying to achieve, whether it’s mining, processing, transport, ESG which is then divided by the cost of doing that and trying to minimise the cost without taking away from the functionality.”First though the Glencore agreement has to be concluded – a development that will require the support of PCZM’s co-investors which includes the South African government’s Industrial Development Corporation and Triple Flag, the Canadian ‘streamer’.Orion needs about R6.7bn to redevelop the entire PCZM consisting of a near-surface ‘Uppers’ project and a second phase, capital-intensive ‘Deeps’. All in all, PCZM is forecast to produce 22,000 tons of copper and 65,000t of zinc a year based on a feasibility study completed in March.The first tranche of Glencore’s financing – about $40m – will more than cover the cost of the A$50m Uppers project, especially as an estimated $5m equity component will be accommodated. As for the ‘Deeps’, half of its $400m capital cost will be funded by Glencore, with the balance provided by the IDC, which has a R250m convertible structure in place (including empowerment shareholders), and Triple Flag’s $80m streaming deal.Orion has to create alignment with these prior financing structures and marry guarantees between the financing parties and Glencore, which is providing its interest-bearing loans so it can buy and market the copper and zinc concentrate.Purchase of the concentrate will be priced on spot minus a discount. “It’s typical offtake terms,” said Lennox. “We’ll get ‘ninety-something’ percent of the spot price or market prices. It’s very competitive.Lennox said Orion was discussing an offtake with a number of parties before opting for Glencore. He said: “Glencore came through at the end with quite a degree of gusto, and we found the terms they were offering very palatable and acceptable given the size of Orion and the size of the facility”.The post “We’re not flying by the seat of our pants”: Orion CEO appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com