- A feasibility study will determine whether Orion Minerals’ plans to bring an open pit into production earlier are viable.
- If viable, the pit could see Prieska mine produce copper within 19 months.
- Orion expects the shorter lead time of the project will attract a bevy of investors.
Orion minerals is fast-tracking plans to produce first copper from its Prieska project in order to take advantage of soaring copper prices and bring early cash into the business.
The junior miner is developing the R4.8 billion Prieska Copper-Zinc project in the Northern Cape with a view to produce copper to meet growing demand in an increasingly electrified world.
On Thursday Orion announced that investigations into an early production scenario are now under way and due for completion by mid-2022. This scenario re-schedules production from open pit mining, which could be producing within 19 months from the start of construction, pushing it forward to occur concurrently with the 33-month development phase of the Prieska Deeps Mine.
According to Orion CEO Errol Smart, the company has awakened to a new, huge, opportunity.
The pit is smaller and has a shorter life than the Prieska Deeps Mine in development, and while the recovery of copper from here is much lower – about half – the grade is almost double.
"When we started our feasibility study work at Prieska back in 2017 we were building with a belief and expectation in the long term that the copper price was going to go up," Smart said.
"At the time, copper was $6 000 a ton and now, in the last couple of weeks, it touched $10,000 a ton. It's a different world now. Suddenly being able to do lower tonnage of high-grade ore early in the mine life has become quite attractive."
Now the open pit project which scheduled to be undertaken from year 13 of the mine life, could in fact be the first operation to produce copper at Prieska.
Initial management studies suggested the open pit project could be developed in parallel with Prieska Deeps and making use of some of the infrastructure (including commissioning one mill early) without compromising the project. The feasibility study will seek to confirm as much.
The shorter lead time on this project means Prieska can start generating cash early, it also means more investors are able to get involved.
"Many investors have a mandate that doesn't allow them to invest into long lead time projects, and a four-year lead time project is a tough ask for many investors," said Smart. "But if it's a two-year lead time project, certainly it opens it up to a whole lot of investors."
Smart believes there is little risk of missing a copper price boom.
"Copper is one metal that's universally required in the whole greening and electrification of the world. So we are very confident that copper is going to be in demand.
"In fact, he said he believed early copper projects like this are the safest bet.
"There's a lot of money pouring into exploration and development now and possibly 10 to 15 years from now there could be big copper mines coming online. But the guys stepping in to fill the gap in the short term are going to be best off and that's where we want to position ourselves."