Orion secures funding for Prieska Copper-Zinc Mine

Highlights:

• US$80 million of Precious Metal Stream funding to be advanced against the delivery of 84% of future gold and silver by-product production, with each stream rate reducing to 50% after certain milestones. Orion will also receive payments of 10% of the delivered precious metal value at spot gold and silver prices at the time of delivery.
• An additional AUS$10 million to be advanced against calculated payments equal to 0.8% of gross revenue from future mineral sales.
• First draw-down of funds from the A$10 million Funding Arrangement expected in January 2023.
• Definitive agreements for an Executive Committee approved ZAR250 million convertible loan with the Industrial Development Corporation of South Africa Limited (IDC) are progressing well.
• The AUS$10 million from the funding arrangement with Triple Flag, combined with the IDC Convertible Loan, will underpin the completion of a feasibility study for early mining at Prieska and enable commencement of mine dewatering.

Orion’s Managing Director and CEO, Errol Smart, commented:

“This funding, provided by Triple Flag together with the IDC, is pivotal for Orion as we transition from being an exploration company to a mine developer. Our new operations team at Prieska Mine, under the experienced leadership of recently appointed Executive – Eastern Operations, Johan Stolz, has already made huge progress in preparing Prieska for development. This includes establishing underground dams and pump stations, and preparing development at the +105 trial mining area to allow for the safe commencement of drilling and blasting. We look forward to seeing the first ore on surface and water out of the mine early in the New Year.

“The trial mining of high-grade remnant ore in the upper levels of the mine is key to us completing a revised feasibility study by mid-2023, paving the way for an early start-up of production and cash-flow while the mine is dewatered over a three-year period. This will provide us with a staged pathway to steadily ramp-up production to eventually reach 2.4 million tpy milled, with ore sourced from the dewatered Prieska Deeps area.

“It is particularly comforting to be working with knowledgeable mine financiers such as Triple Flag, who have demonstrated a strong technical and commercial understanding of our intended mining operations during the many months of their incisive due diligence and most importantly share Orion’s high values in regard to ESG standards. Triple flag has been rated by Sustainalytics, and ranked as the fourth best precious metals company in the world out of 121 global issuers and a mere 0.3 points behind the leaders. We look forward to a long and rewarding relationship with Triple Flag.”

Triple Flag’s CEO, Shaun Usmar, commented:

“The execution of definitive agreements with Orion marks an important milestone towards returning the Prieska mine to production in a historically prolific copper mining district. This agreement demonstrates a commitment to our mission to be a preferred funding partner to mining companies throughout the commodity cycle by providing customised streaming and royalty financing solutions. The AUS$10 million provided under the funding arrangement in exchange for payments equal to 0.8% of gross revenue provides Triple Flag with immediate exposure to Prieska while the early mining feasibility study is being finalised and dewatering is commenced. Upon delivering an executable mine plan, the US$80 million precious metals stream will form a key part of a fully funded financing package that will enable the development of Prieska, benefiting the South African economy and local stakeholders through investment and much-needed job creation. The low-carbon footprint of the planned operations, as well as the resource potential in a highly prospective district, provides Triple Flag with long-term, sustainable optionality.”

Read the article online at: https://www.globalminingreview.com/mining/15122022/orion-secures-funding-for-prieska-copper-zinc-mine/