Wrap Text
Okiep Copper Project Scoping Study confirms potential for early cash flow and ‘Proof-of-Concept’ copper production
Orion Minerals Limited
Incorporated in the Commonwealth of Australia
Australian Company Number 098 939 274
ASX share code: ORN
JSE share code: ORN
ISIN: AU000000ORN1
Okiep Copper Project Scoping Study confirms potential for early cash flow and ‘Proof-of-Concept’
copper production
Scoping Study encompasses five initial deposits, providing a solid benchmark for determining the economic
merit of the 25 priority targets identified by Orion
HIGHLIGHTS
- Scoping Study completed for a proposed ‘proof-of-concept’-scale copper mining operation at the
brownfields Okiep Copper Project, located in the Northern Cape Province of South Africa.
- The Study was completed as part of Orion’s due diligence program under its Option Agreement to acquire
the Okiep Project, with results from the study confirming that:
o Okiep-style deposits have potential to be mined at low cost by both open pit and underground mining
methods;
o potential exists to rapidly advance the project to production, with critical permitting processes
already underway;
o a ‘proof-of-concept’-scale operation requiring low upfront capital investment can provide
commercially attractive returns and early cashflows; and
o potential exists to identify significant operational synergies with the fully permitted Prieska Copper-
o Zinc Project, also located in the Northern Cape Province, which now awaits funding before mine
construction commences.
- The Scoping Study is focused on the SAFTA portion of the Okiep Copper Project where Orion is evaluating the
purchase of a 56.2% shareholding to partner with the Industrial Development Corporation which currently
owns 43.8%.
- Next steps are to:
o Complete the due diligence evaluation of the option to acquire the Project;
o In the event of the Project being acquired, advance licencing and permitting activities; and
o Advance mine feasibility studies to prepare for commencement of project construction at the
earliest opportunity, subject to funding and a Final Investment Decision.
Orion’s Managing Director and CEO, Errol Smart, commented:
“The outcome of the Scoping Study supports the economic merit of developing a foundation phase mining
operation while Orion conducts the required work and engineering studies to evaluate the potential to re-
establish mining operations with outputs as were previously sustained for decades by previous owners. Newmont
managed to produce 30,000 - 40,000 tonnes per annum of copper.
“Most importantly, we now have a benchmark for determining the potential economic merit of the twenty-five
targets prioritised by Orion, which have historical mineral resources in place that were not mined. Thus far we
have successfully verified and reported JORC 2012 Mineral Resources for an initial six deposits, with this Study now
providing guidance for the targeted cut-off grades for open pit and underground mining that are required for
these deposits to be of economic merit.”
“While the five deposits included in the foundation phase Scoping Study have a significantly lower grade than
the historical average mining grade of 1.7% copper maintained in the district by previous owners (and which
Orion is targeting for ongoing exploration), the lower-grade remnant mineralisation presents a very attractive
early production opportunity.
“Given the current strong copper market conditions and the potential for further price escalation given very firm
global demand fundamentals, we believe the potential for early profitable production from a small-scale
foundation phase is very encouraging – particularly given the Scoping Study assumes a conservative copper
price of USD7,600 per tonne compared to recent prices of over USD10,000/tonne.
“In addition, the presence of a highly regarded partner such as the Industrial Development Corporation, which
currently holds 43.8%of SAFTA and shares Orion’s values of sustainable mining development and high ESG
standards, is also a very important consideration for this potential investment.
“Whilst the 25 targets previously drilled and evaluated by Goldfields are the focus for our resource estimation and
engineering evaluation team, our exploration geological team members are identifying high quality drill targets,
where they believe modern geophysical methods have potential to catalyse the discovery of high tonnage,
high grade mineralisation as previously mined in the district. The exploration team is also progressing plans to fly
the first ever high power, high resolution electromagnetic survey flown over this district, expanding our targets
beyond historic discoveries.
“Based on the strength of the Scoping Study results, we’re now pressing ahead to complete final due diligence
programs at the Okiep Copper Project, with a final decision on the project acquisition to be made by 31 July
2021.”
Cautionary Statement on Forward Looking Statements
The Scoping Study reported in this Announcement assessed the commercial viability of establishing mining and
mineral processing operations at the Okiep Copper Project (Okiep Project or Project). It is a preliminary technical
and economic study of the potential viability of the Okiep Project. It is based on low level technical and
economic assessments that are not sufficient to support the estimation of Ore Reserves. Further evaluation work
and appropriate studies are required before Orion will be in a position to estimate any Ore Reserves or to provide
any assurance of an economic development case.
The Scoping Study was prepared to a capital cost estimation accuracy of ± 25%. It contains Production Targets
and forecast financial information that are supported by a combination of Measured Mineral Resources,
Indicated Mineral Resources and Inferred Mineral Resources. All Mineral Resources used in the Study were
classified and disclosed in compliance with ASX Listing Rules and JORC Code (2012) reporting standards. No Ore
Reserves have been estimated nor incorporated in the report.
The Mineral Resources underpinning the Production Target have been prepared by Competent Persons in
accordance with the requirements in the JORC Code (2012).
Orion is satisfied that the portions of Inferred Mineral Resources included in the Scoping Study and the Production
Targets (approximately 21% of the mining plan) are not the determining factor in Project viability and do not
feature in a manner that minimises their overall impact on the mining plan. Note that there is a low level of
geological confidence associated with Inferred Mineral Resources and there is no certainty that further
exploration work will result in the determination of Indicated Mineral Resources or that the portion of the
production target reliant on Inferred Mineral Resources will be realised.
All material assumptions for the Scoping Study are outlined in this report. These include assumptions about the
availability of funding. While Orion considers all the material assumptions to be based on reasonable grounds,
there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping
Study will be achieved. To achieve the range of outcomes indicated in the Scoping Study, funding in the order
of AUD58 million (which incorporates a 15% contingency allowance) will be required. This funding is expected
to be sourced from a combination of project financing debt and equity.
Given the uncertainties involved, investors should not make any investment decisions based solely on the results
of the Scoping Study.
KEY SCOPING STUDY OUTCOMES
- The Scoping Study indicates the potential to establish a financially robust foundation-phase copper mining
project with:
o First production possible within 16 months of the start of construction;
o Average annual undiscounted free cash flows of AUD32 million post-tax;
o All-in-sustaining costs of USD4,478/t (USD2.03/lb) of copper sold;
o All-in-sustaining margin of 40%;
o Break-even grade of 0.8% Cu for both un-optimised open pit and underground mining operations is
well below the Mineral Resource grades of the deposits considered in the Scoping Study and the
historical head grades typical of the Okiep Copper District;
o Peak funding requirements of AUD58 million (including 15% contingency); and
o Peak annual production of 9kt of copper-in-concentrate, potentially supplementing the 22kt a year
of copper production planned from Orion’s flagship project, the Prieska Copper-Zinc Project.
- The life-of-mine for the ‘proof-of-concept’ foundation phase is modelled for 12 years, during which time
concurrent exploration and mine expansion scenarios will be planned and potentially implemented.
- Total milled production for the foundation phase of 9Mt at 1.29% Cu (comprising 33% Measured Mineral
Resources, 46% Indicated Mineral Resources and 21% Inferred Mineral Resources), with the plan delivering a
total of 102kt of copper in saleable concentrates.
- Only Mineral Resources from the Flat Mines area of the greater Okiep Copper Complex are incorporated in
the foundation-phase plan, leaving significant potential for future expansion scenarios to be considered.
Orion Minerals Ltd (ASX/JSE: ORN) (Orion or Company) is pleased to present the outcomes of a foundation phase
scoping study completed for the development of the Flat Mines and Jan Coetzee copper deposits at the Okiep
Copper Project (Okiep Project or Project) (referred to herein as the Scoping Study or Study). The Okiep Project is
located in the Northern Cape Province of South Africa, approximately 450km to the west of Orion’s flagship
Prieska Copper-Zinc Project (Prieska Project).
The Scoping Study was completed as part of the due diligence program currently being undertaken in relation
to Orion’s exclusive option to acquire the Okiep Project (refer ASX release 2 February 2021). The exclusivity option
expires on 31 July 2021.
The Study evaluates the commercial merits of a foundation phase mining operation, with a production level in
line with the pending Mining Right Application applied for by the project vendors (760ktpa plant throughput).
Orion’s primary interest in the district is in the long-term potential to re-establish mining operations at a level similar
to that delivered by Newmont and later Goldfields, who produced 30,000 - 40,000 tonnes of copper metal per
annum over several decades.
The foundation-phase Scoping Study investigated the commercial viability of establishing mining and mineral
processing operations that would produce saleable copper concentrates from the exploitation of Mineral
Resources delineated within a sub-area of the Okiep Project, referred to herein as the Flat Mines Project area.
The concept-level Study was prepared to a capital cost estimation accuracy of ± 25% and targets a production
scale that is manageable to test mine operating practices best suited to exploiting the numerous copper
deposits identified within the region and are being considered in future production expansion scenarios (hence
‘proof-of-concept’ scale).
The Scoping Study demonstrates that potential exists to establish foundation-scale mining operations as per the
scale of processing included in the Mining Right Application. These foundation scale operations could be in
production within 16 months of the commencement of construction, requiring a low upfront capital expenditure
commitment of AUD53 million (including a 15% contingency allowance), whilst providing substantial early
cashflows averaging AUD32 million annually, high operating margins (40% all-in-sustaining margin, 37% IRR, post-
tax) and attractive overall commercial returns, with a project Net Present Value (NPV) of approximately AUD114
million (post-tax) at a 10% discount rate, using a copper price of @ US$7,600/t .
The proposed foundation scale mining operations could run for 12 years at a design processing plant throughput
of 760,000 tonnes per year, resulting in 9,000 tonnes per year of copper sold in marketable concentrates. Both
underground and surface mining methods would be used in conjunction with mineral processing by
conventional froth-flotation concentration to produce the copper concentrates for export.
This ‘proof--of-concept’ phase of the planned operation targets the mining of only those Okiep Project copper
deposits for which Orion has verified and reported Mineral Resources during the early phase of the due diligence
period. The resulting Production Target is therefore supported by 33% Measured Mineral Resources, 46% Indicated
Mineral Resources and 21% Inferred Mineral Resources. In compliance with disclosure requirements, note that
there is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty
that further exploration work will result in the determination of Indicated Mineral Resources or that the Production
Target or financial forecast information outlined in this document will be realised.
Key assumptions and Project performance parameters resulting from the Scoping Study are presented in Table
1 below:
Executive Dashboard
Price and Forex Assumptions Unit Value Financial Performance Unit Value Unit Value
Metal price - Cu USD/t 7,593 NPV (pre-tax) approximated @10% discount rate ZAR (M) 1,896 AUD (M) 170
Metal price – Au USD/oz 1,889 NPV (post-tax) approximated @10% discount rate ZAR (M) 1,267 AUD (M) 114
Metal price – Ag USD/oz 24 IRR (pre-tax) % 44%
Exchange rate ZAR : USD 17.2 :1 IRR (post-tax) % 37%
Exchange rate ZAR : AUD 11 .1: 1 Payback from first production years 3.25 years
Production Metrics Unit Value Undiscounted free cash flow (pre-tax) ZAR (M) 4,607 AUD (M) 413
Life of Mine (Proof-of-Concept Phase) Years 11.8 Peak funding ZAR (M) 643 AUD (M) 58
Treatment plant capacity ktpa 780 Project Cost Metrics Unit Value Unit Value
Proof-of-Concept Phase tonnage - RoM kt 9,011 Average cash operating unit cost (C1) ZAR/t 781 AUD/t 70
Proof-of-Concept Phase tonnage – RoM U/G kt 7,479 All-in-sustaining cost per unit RoM t ZAR/t 873 AUD/t 78
Proof-of-Concept Phase tonnage – RoM O-Pit kt 1,531 All-in-sustaining cost per unit Cu t sold USD/t Cu 4,478 AUD/t Cu 6,904
RoM Plant Feed Grade - Cu - U/G % 1.29% Price received (net of NSR) - Cu USD/t Cu 7,441 AUD/t Cu 11,473
RoM Plant Feed Grade - Cu – O-Pit % 1.28% All-in-sustaining margin % 40%
RoM Plant Feed Grade – Au g/t conc 2.2 Operating breakeven grade - Cu % 0.83%
RoM Plant Feed Grade – Ag g/t conc 34 Project Cash Flows Unit Value Unit Value
Overall Plant Recovery - Cu % 87.4% LoM net revenue ZAR (M) 12,712 AUD (M) 1,142
Concentrate tonnage - Cu kt 386 LoM operating costs (plus State Royalty) ZAR (M) 7,320 AUD (M) 657
Concentrate grade - Cu % 25.8% Project Start-up Capital Expenditure ZAR (M) 595 AUD (M) 53
NSR as % of metal price - Cu % 96.9% Sustaining Capital Expenditure ZAR (M) 188 AUD (M) 17
Metal sold (in concentrates) - Cu Tonnes 102,329 Income Tax ZAR (M) 1,368 AUD (M) 123
Total Cu Sales Tonnes 386,787 Cash Flow After Tax ZAR (M) 3,241 AUD (M) 291
Level of Accuracy of Financial Model ± 25%, LoM = Life of Mine, NSR = Net Smelter Return, NPV = Net Present Value, IRR = Internal Rate of Return
There is a low level of geological confidence associated with Inferred Mineral Resources and therefore there is no certainty that further exploration work will result in the
determination of Indicated Mineral Resources or that the Production Target or financial forecast information referred to in this Study will be realised. Source: ORN Okiep
Financial Model revision 4.0
Table 1: Key assumptions and project performance parameters for the Okiep Copper Project (Flat Mines Project area) (numbers may contain
apparent rounding errors).
The modelled scenario returns undiscounted free cashflows of approximately AUD413 million pre-tax (AUD291
million post-tax), a Net Present Value (NPV) of approximately AUD170 million pre-tax and post-royalties (AUD114
million post-tax, post royalties), using non-inflation-adjusted estimates and a discount rate of 10%. The Project
achieves an Internal Rate of Return (IRR) of approximately 44% pre-tax (37% post-tax). The financial modelling
assumes long-term forecast metal prices of USD7,593/tonne for copper1.
Peak funding requirements total AUD58 million, including a 15% contingency allowance. This is forecast to occur
in the second year of the capital expenditure (Capex) program. Payback is planned to occur 4.5 years from the
start of construction or 3.25 years from the start of production, shown in the figure below.
Figure 1: Cashflow profile over the life of mine.
The unit all-in-sustaining costs (AiSC) over the proposed mine life (LoM) are estimated to be AUD6,904/t
(USD4,478/t) (USD2.03/lb) copper metal sold. The realised price (net of smelter charges) over the LoM is forecast
to be AUD11,344/t (USD7,358t) (USD3.34/lb) copper metal sold, yielding in the order of a 40% all-in-sustaining
margin. The operating breakeven grade is estimated at 0.8% copper, well below the Run of Mine (RoM) feed
grade of 1.3% copper applied in the production schedule. The break-even grade using direct production costs
(C1) is estimated at 0.7% copper, in line with the cut-off grade used for stating the supporting estimated Mineral
Resources.
Foundation Phase Project Financial Assumptions Sensitivity Analysis
The NPV is most sensitive to variances in the copper grade, copper price, ZAR-USD foreign currency exchange
(Forex) rate and copper recoveries. Project capital expenditure variances have relatively low impact on the
NPV. The post-tax NPV ranges from AUD71 million (-37%) to AUD156 million (+35%) as the applied copper head
grade is varied from -10% to +10% of the base assumption of 1.29%. The post-tax NPV ranges from AUD76 million
(-33%) to AUD151 million (+31%) as the copper price is varied from -10% to +10% of the base assumption of 7,593
USD/t for year 1. The post-tax IRR ranges from 24% to 47% as the assumed ZAR-USD Forex rate varies from -15% to
+15% against base assumption (shown below).
1 Metal price assumptions based on S&P Global Capital commodity long-term real forecast (May 2021).
Figure 2: Sensitivity of the post-tax NPV to changes in key input assumptions for the Okiep Copper Project (Flat Mines Project area).
Synergies with the Prieska Copper-Zinc Project
Production of 9,000 tonnes of copper each year would potentially supplement the 22,000 tonnes of copper
planned to be produced each year2 from the Prieska Project, also located in the Northern Cape Province, South
Africa (refer ASX release 26 May 2020). Combined production volumes could provide opportunities arising from
economies of scale to be investigated, such as the ability to share some administrative costs, supply logistics,
supply of power from a common renewable energy facility and potentially justify the case to investigate the
beneficiation of the copper concentrates to produce metals locally.
OKIEP SCOPING STUDY TECHNICAL REPORT EXTRACTS
Nature of and Contributions to the Scoping Study
The Scoping Study was completed as part of the due diligence by Orion to evaluate the option to acquire the
Okiep Project (refer ASX release 2 February 2021).
The Study investigates the commercial viability of a ‘proof-of-concept’ scale mining and mineral processing
operation. Once proved, the operating concept could become the scalable basis for potential future
expansions to increase metal concentrate output from the Okiep Project operations to match or exceed
historical production levels. Newmont Mining Corporation’s historical production from the copper district peaked
at 40,000 tonnes of copper per year, (refer ASX release 2 February 2021).
The Scoping Study has been completed to a cost estimation accuracy of ±25% and is supported by Mineral
Resources classified by a Competent Person and reported in accordance with JORC Code (2012) guidelines, as
announced in February 2021 and March 2021 (refer ASX releases 10 February 2021 and 29 March 2021).
Conceptual underground mine designs and schedule, as well as unoptimised pit designs and schedules were
completed, containing a combination of Measured, Indicated and Inferred Mineral Resources, with no more
than 21% Inferred Mineral Resources supporting the Production Target. This Announcement of the Scoping Study
2The Prieska production target and schedule were first reported in the ASX release of 26 May 2020: “Updated Feasibility Study Delivers…”
available to the public on http://www.orionminerals.com.au/investors/asx-jse-announcements/. All material assumptions underpinning the
production target detailed in the initial report continue to apply and have not materially changed.
complies with Australian Securities Exchange (ASX) listing rules and Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC Code (2012)) reporting standards.
The Study was carried out and managed by Orion and an experienced team of experts and specialists including:
A&B Global Mining Ltd (Mining); ABS Africa (Pty) Ltd (Environmental); Falcon and Hume Attorneys Inc.; Fraser
McGill (Pty) Ltd (Financial Modelling); Gariep Mining and Exploration (Pty) Ltd (Process plant equipment); Epoch
Resources Ltd (Tailings storage facility); METC Engineering Ltd (Process plant) and PCDS Consultants (Pty) Ltd
(Safety and Health).
The Study also references some information from a Pre-Feasibility Study completed by Minxcon (Pty) Ltd
(Minxcon) in 2019 on behalf of Southern African Tantalum Mining (Pty) Ltd (SAFTA)(SAFTA PFS).
The reference date of this report and for the cost estimates and key financial assumptions applied therein is April
2021. All costs and financial assumptions are reported as of the base date, with no allowance for escalations or
future fluctuations. Production schedules and cashflow modelling have been compiled in monthly intervals for
the LoM duration.
Project Overview
Background
The Okiep Project consists of the collective mineral prospecting and mine development interests held by SAFTA,
the Nababeep Copper Company (Pty) Ltd (NCC) and the Bulletrap Copper Co (Pty) Ltd (BCC). These mineral
rights cover extensive areas of the Okiep copper district. This copper district is of significant historical importance,
with large mines in the area having historically produced more than 2Mt of copper metal over a 150-year period
ending in 2003.
The Scoping Study is focused on evaluating the scenario to develop and mine two copper deposits as open pit
mines (these being the Flat Mine Nababeep (FM Pit) and Jan Coetzee deposit (JC Pit) and three copper deposits
as underground mines (these being the Flat Mine North (FMN), Flat Mine South (FMS) and Flat Mine East (FME)
deposits) (see Figures 4 and 7). The area proposed for this initial ‘proof-of-concept’ phase of mining is a subset
of the wider Okiep Project and is herein referred to as the Flat Mines Project area with all. All deposits within the
Flat Mines Project area are held by SAFTA with applications for Prospecting and Mining Rights pending.
The report incorporates the results from a discounted cashflow financial model based on a scenario to mine the
five mentioned discrete deposits, processing the resulting RoM material at a centralised concentrator to produce
saleable copper concentrates, over a projected LoM of approximately 12 years.
The planned mining operations would serve as a proof-of-concept, run concurrently with exploration, mineral
resources definition and mine feasibility studies that would aim to advance planning for production expansion
scenarios.
Project Geography
The Project is located in the Northern Cape Province of South Africa. The next figure illustrates the location of the
Company’s exploration and mine development activities, with the Okiep Project located at the north-western
extent of the province, approximately 20km north-west of the town of Springbok.
Figure 3: Location of the Okiep Copper Project, Northern Cape Province, South Africa.
The Project is in a semi-desert region with very hot summers and cold winters, with mean maximum and minimum
daily temperatures of 30°C for January and 5°C for July respectively. Rainfall is mainly in the winter months with
a mean annual precipitation of 153mm. The landscape of the area features huge granite and gneiss domes,
smooth glacis and disintegrated boulder kopjes supporting open shrubland up to 1m tall.
The Project is within the Namakwa District Municipality, and the Nama Khoi Local Municipality (NKLM). The area
is sparsely populated, with a population of 115,842 as at the 2019 census. Approximately 90% of the region is used
for livestock grazing, with the remainder comprising agriculture and urban development.
Existing Infrastructure
The Project is serviced for most amenities and accommodation by the regional centre of Springbok and the
smaller nearby towns of Nababeep and Okiep. The project site is accessible via a tarred regional highway from
Springbok, where a 1.5km tarred airstrip is in service. Power supply to the area is via a municipal power grid that
sources power from the national electricity grid via an ESKOM substation located 23km from the Project site. A
municipal water pipeline traverses the site, drawing water from the Orange River 135km away. The administrative
buildings that would service the Project are located at Nababeep.
Mineral Tenements, Licencing and Project Ownership
Mineral Tenements
The Flat Mines Project area (a subset of the Okiep Project area) is covered under two mineral tenement
applications in the name of SAFTA, these being the SAFTA Mining Right application and the contiguous SAFTA
Prospecting Right applications. Together, these tenements cover a combined 8,300 hectares. This is shown in the
following figure and table.
Figure 4: Mineral tenement map for the Flat Mines Project area.
Right Application Reference Applicant Submission Term Extent
Type of Right Acceptance Date Minerals
Number Holder Date (Years) (Ha)
NC10150MR Mining Right
SAFTA 4 October 2018 4 March 2019 15 1,214 Cu, W
(SAFTA Mining Right) Application
Prospecting
NC12755PR SAFTA 9 October 2020 In process 5 7,042 Cu, W
Right
(SAFTA Prospecting Right)
Application
Prospecting
NC12848PR & NC12850PR Awaiting Various commodities
SAFTA Right 4 February 2021 5 8,256
(SAFTA Prospecting Rights) Acceptance including Au and Ag
Application
Table 2: Mineral tenement applications for the Flat Mines Project area.
The wider Okiep Project area incorporates additional prospecting rights and prospecting right applications
adjacent to the Flat Mines Project area that are owned by related entities other than SAFTA. The Okiep Project
area extends over 30,000 hectares in area, effectively covering most of the large historical mines previously
operated by the O’Okiep Copper Company (see below).
Figure 5: Mineral Tenement Map for the whole Okiep Project area (including the Flat Mines Project sub-area).
Licencing Status
Along with applications for mining and prospecting rights pending for the Flat Mines Project area, Environmental
Authorisations and an Integrated Water Use Licence (IWUL) have been applied for and are pending processing
as is required to allow exploration and mining activities to be authorised. A summary of the status of key Project
licences is tabled below.
Type of Authorisation/Licence SAFTA Mining Right Application area SAFTA Prospecting Right Application area
Environmental Authorisation
Submitted 4 October 2018 Submitted 9 October 2020
(and Waste Use Licence)
Mining Right Submitted 4 October 2018 Submitted 9 October 2020
Water Use Licence Resubmitted 20 April 2021 Not currently required
Special Zone (Extractive Industry) Application planned once Mining Right is granted Not currently required
Table 3: Status of key licences required for exploration and mine construction activities within the Flat Mines Project area.
Option to acquire Okiep Project and Project-related data
On 2 February 2021, Orion announced that it had signed an exclusive option to undertake due diligence to
acquire the following:
• a 56.25% interest in SAFTA – alongside the Industrial Development Corporation of South Africa Limited
(IDC) who hold 43.75%;
• 100% of NCC; and
• 100% of BCC,
(together herein being referred to as the ‘Okiep Copper Project’ or ‘Okiep Project’).
SAFTA is currently owned by the IDC (43.75%) in partnership with six other private and corporate entities (56.25%).
Under the terms of the agreement, Orion was granted an exclusivity period extending to 31 July 2021, during
which time Orion could exercise an exclusive option to acquire the Okiep Project.
On 15 February 2021, Orion announced that it had also secured an option to acquire the furnished head office
and database from the O’Okiep Copper Company Proprietary Limited, O’Okiep Australia Pty Ltd and N7
Transport CC. The database includes all historical mining and exploration records over much of the Okiep Project
area. The database also includes O’Okiep exploration records and historical due diligence reviews undertaken
by Newmont and Goldfields over much of the Northern Cape Province, including Orion’s Prieska Copper-Zinc
Mine and the Areachap Belt. This information would be important to the exploration, Mineral Resources definition
and mine feasibility studies planned for the Project.
Proforma Ownership Structures
Orion’s proforma corporate structure for its attributable ownership of the Okiep Project, in the event of
completing the acquisition of the target group of mineral tenements, is shown in the organogram in the figure
below.
Figure 6: Proforma Orion corporate structure showing the attributable ownership (56.2%) of the Flat Mines Project mineral rights at the Okiep
Copper Project, Northern Cape Province, South Africa.
Ownership interests in the Project would be adjusted to pre-emptively comply with the ownership guidelines
stipulated by the Broad-based Socio-Economic Empowerment Charter for the South African Mining and Minerals
Industry, 2018 (Mining Charter 2018). As such, Orion and the IDC would adjust ownership allocation to make
provision for at least 5% Community Trust and 5% Employees’ Trust and 20% BEE Entrepreneur ownership. The IDC’s
participation is neutral in its contribution to the required BEE entrepreneurship credentials3 . The Community and
Employee Trusts would not be required to contribute to any up-front funding of the project development.
However, all funding contributions made on behalf of the trusts would be entitled to be recovered from project
cashflows before any dividend distributions are made to the trusts.
History
Recorded commercial exploitation of copper from the Okiep region dates back to the late 1800s. Modern era
mechanised mining commenced with Newmont Mining Corporation’s acquisition of the O’Okiep Copper
3 In terms of documentation submitted for the MRA, IDC holds BEE Level 1 Certification.
Company in 1940 and their subsequent consolidation of the copper production from the region. Some important
historical events since Newmont’s arrival are summarised in the table below.
Year Event
Newmont Mining Corporation acquires the O’Okiep Copper Company for £537 870 15s 8d,
mining at rates of up to 40,000tpa copper production. The company assets included 105,000
1940 acres of mineral holdings, mineral rights to a further 50,000 acres, plants and equipment, the
narrow-gauge railway to Port Nolloth and the jetty to that port. Historical ore reserves (non-
JORC Code (2012)) at the time of takeover were estimated at 10,200,000 short tons at an
average grade of 2.45% copper.
1984 Goldfields acquires the O’Okiep Copper Company.
1998 Metorex acquires O’Okiep Copper Company from Goldfields.
Metorex moves the plant to their project in central Africa and closes the operations in
Springbok.
2003 PJ Fourie acquires O’Okiep Copper Company from Metorex for ZAR1.00 including all
environmental liabilities.
2013 SAFTA Prospecting Rights granted over the Flat Mines and others.
2018 IDC funds the Flat Mine Project in exchange for equity.
SAFTA applies for a Mining Right over the Flat Mines area.
Feb 2021 Orion secures an option to acquire – SAFTA, NCC and BCC interests in the Okiep Copper Project
Table 4: Chronology of key historical events at the Okiep Copper Project.
The Okiep Project covers the core of a premier historical copper-producing district that produced more than
2Mt of copper over a 150-year period ending in 2003. About 20% of recorded production was pre-1920, including
production from the O’Okiep Copper Company that produced approximately 2.2Mt of hand-sorted ore and
concentrates at an average grade of 14% copper.
Main sources of ore production pre-1920 were:
• Okiep Mine (907,000 tonnes at 21% copper);
• Tweefontein (at least 139,000 tonnes at 25% copper); and
• Nababeep South (816,000 tonnes at 5.5% copper).
After 1940, Newmont mined at a production rate of up to 40ktpa Cu, at an average RoM head grade of 1.9%
Cu. The Newmont operations sourced ore from multiple mines that fed a centralised concentration and copper
smelter facility at Nababeep. Newmont sold the business to Goldfields in 1984, which in turn sold on to Metorex
in 1998. Metorex stopped mining in 2003 (refer ASX release 2 February 2021).
Geology and Exploration
Regional Geology and Mineralisation
The Okiep Copper District lies within the Bushmanland Sub-province of the Namaqua-Natal Mobile Belt, intruded
by the Koperberg Suite and having the Richtersveld Sub-province to the north and the Gariep Supergroup to the
west. Metamorphism reached greenschist/ lower amphibolite facies (~520°C) around 540Ma ago. The
predominant rock type in the Flat Mine area is the Concordia granite.
Copper mineralisation occurs in basic to intermediate rocks of the intrusive Koperberg Suite comprising mainly
anorthosite, biotite diorite, pyroxene diorite and pyroxenite, as well as minor glimmerite and orbicular diorite,
within the granulite grade gneisses and granites of the Okiep Group. The anorthosite appears to be the oldest
member of the suite, followed by increasingly more mafic varieties i.e., leucodiorite, hypersthene diorite (norite)
and minor hypersthenite. The sulphides occur mainly as disseminations in the diorite and were generally regarded
as having formed by immiscibility.
The common sulphide minerals are chalcopyrite, bornite, chalcocite and pyrrhotite with relatively sparse pyrite
and galena. Bornite and chalcopyrite are usually found together at some of the deposits. Frequently bornite
predominates over chalcopyrite or occurs to its exclusion.
Nearly all the reported Mineral Resources are comprised of sulphides which would be expected to produce the
high-grade sulphide material which is well known from the Okiep area, with resulting clean and simple metallurgy
known historically to provide greater than 93% metal recovery4.
Deposit Geology
Mineral Resources estimates have been reported for five deposits within the Flat Mines Project area, namely FMN,
FMS, FME, Flat Mine (Nababeep) and Jan Coetzee Mine (see figure below). A brief discussion on their specific
geology follows with the tabulated Mineral Resources.
Figure 7: Plan showing the copper deposits within the Flat Mines Project area.
Flat Mine North: The Flat Mine area covers a north-south trending valley with the Flat Mine fault along
approximately the centre of the valley and approximately 500m west of the FMN body. There is a strong
tendency for sulphides to accumulate towards the footwall so that the Koperberg Suite is “bottom-loaded” with
occasional assay intervals exceeding 5% Cu. The southern portion of the FMN mineralised deposit has an irregular
pipe-like structure 180m long and 40m wide varying from 15 to 50m in vertical thickness. It strikes 345° and plunges
4 Historical metallurgical test work from FMN was reported in the ASX/JSE release of 10 February 2021: “Orion reports maiden JORC Mineral
Resource…” available to the public on http://www.orionminerals.com.au/investors/asx-jse-announcements/. Competent Person Exploration
Results: Errol Smart. Orion company confirms that it is not aware of any new information or data that materially affects the information
included in the original market announcement. Orion confirms that the form and context in which the Competent Person’s findings are
presented have not been materially modified.
steeply (45º) for the first 60m from surface and then flattens out to become horizontal for the remaining 120m,
attaining a maximum depth of 100m. Usually referred to as the Flat Mine North Extension, the remainder of the
FMN mineralisation virtually adjoins the southern body at its northern extremity like the cross on a “T” at a depth
of 170 to 250m.
Flat Mine East: At FME, the main Koperberg intrusive massif is about 970m long and 20 to 40m wide extending
easterly at a depth of 700m and is open ended. The intrusive dips -50° to -75° WNW and appears to occupy an
ENE–WSW steep structure cutting across the gently dipping Concordia Granite with rafts of Wolfram Schist and
deeper Nababeep Gneiss. Unlike FMN and FMS, diorite is not as volumetrically important as norite which hosts
the bulk of the mineralisation while anorthosite is more erratically mineralised with lower grades.
Flat Mine South: Intruding the Nababeep Gneiss and Concordia Granite with Wolfram Schist bands, the FMS
mafic body has an irregular but continuous configuration; about 600m long and generally about 30m wide
extending to >700m depth where it is often less than 10m thick. A small section outcrops in the middle. The east-
trending Koperberg Suite is mainly sub-surface and dips at about -80º N at >500m depth and is still open ended.
Flat Mine (Nababeep) and Jan Coetzee: The Flat Mine (Nababeep) and Jan Coetzee Mine mineralised deposits
generally strike east-west and dip steeply to the north. Flat Mine (Nababeep) is approximately 225m long and
35m wide and Jan Coetzee Mine has an approximate 170m strike length and is 70m wide.
Exploration
Exploration in the Flat Mine area was carried out intermittently in the period 1953 to 1984, with very little
exploration of the area done from 1985 to 2003. Exploration included: geophysical surveys, surface mapping,
prospect pitting, and drillholes (235 surface and 17 underground) totalling 43,413m for the FMN deposit, 80
surface holes totalling 32,750m for the FMS deposit, and 151 surface holes totalling 51,414m for the FME deposit.
In 2018, a set of historical drill sites were selected by SAFTA from the Okiep Copper Complex database for twin
drilling to test the veracity of the historical data and specially to test significant mineralised intervals, for the
geological modelling and mineral resource estimation. One twin drillhole was done at each of the 13 selected
historic sites at both FMN and FMS.
The twin drilling program consisted of 1,260m percussion and 1,109m diamond drilling. Comparisons of the twin
drill data with the historical drillhole data shows a generally close comparison, in both lithology and assay, except
where excessive deviation had deflected the twin hole. The Competent Person therefore considered that the
historical data were acceptable for use in Mineral Resources estimation.
No twin or verification drill holes have yet been drilled at Flat Mines (Nababeep) and Jan Coetzee. At least 55
historical surface drillhole data (15,263 drill metres) and 158 historical drillhole data (216,693 drill metres) were
digitised and used to re-model Flat Mine (Nababeep) and Jan Coetzee Mine deposits respectively. Numerous
underground drill holes exist but have not yet been digitally captured and used for modelling purposes.
Mineral Resources Estimation
Mineral Resources
An extensive catalogue of historical data was used to guide the verification and twin drilling campaign on FMN.
This program culminated in the declaration of Mineral Resources estimated by a Competent Person and
classified in accordance with JORC Code (2012) guidelines.
Orion’s maiden Mineral Resource estimate for the Okiep Project was reported on 10 February 2021. This estimate
was for the dormant Flat Mines: FMN, FMS and FME. On 29th March 2021, Orion reported further Mineral Resource
estimates, this time for the dormant Flat Mines (Nababeep), Jan Coetzee and Nababeep Kloof mines. The total
of the Orion Mineral Resource estimates, as reported to the ASX on 29 March 2021, are tabulated below.
Total Mineral Resource Estimate for the Flat Mines Area of the Okiep Project (0.7% Cu cut-off)5
Effective Date: 29 March 2021
Measured Indicated Inferred
Mine / Prospect
Mt % Cu t Cu Mt % Cu t Cu Mt % Cu t Cu
Flat Mine (Nababeep) - - - - - - 1.0 1.4 15,000
Jan Coetzee Mine - - - - - - 1.0 1.4 14,000
Nababeep Kloof Mine - - - - - - 0.5 1.2 6,000
Flat Mine East 3.166 1.43 45,000 0.80 1.11 8,900 - - -
Flat Mine North 0.339 1.27 4,300 0.97 1.50 14,500 - - -
Flat Mine South - - - 3.32 1.41 45,600 0.4 0.8 3,000
Total 3.505 1.41 49,300 5.00 1.38 69,000 3.0 1.3 38,000
Table 5: Total Mineral Resource Estimate for the Flat Mines Area of the Okiep Project (0.7% Cu cut-off).
The mining studies that form part of this Scoping Study are informed by the Mineral Resource estimates for FMN,
FMS and FME (underground), Flat Mine (Nababeep)(open pit) and Jan Coetzee Mine (open pit). For the Mineral
Resource estimates used in the Scoping Study mine plan, the proportion of Inferred Mineral Resources is 21%.
Mineral Resources Classification Criteria for the Minerals Resources Estimates
For the FMN, FMS and FME Mineral Resources, refer to ASX release 10 February 2021.
For the Flat Mine (Nababeep), Jan Coetzee and Kloof Mineral Resources, refer to ASX release 29 March 2021.
Cut-off Grade Determination for Mineral Resources Estimation
The Mineral Resources were reported using a base case of 0.7% Cu. The incremental break-even grade resulting
from the financial model used for the Scoping Study is 0.7% Cu. This is the break-even grade estimated using
direct operating C1 costs. This incremental break-even grade is similar to the cut-off grade used to report Mineral
Resources used in the Scoping Study.
Mining Operations
Overview
The Okiep district has been the focus of intensive surface and underground mining, including large-scale
mechanised underground mining, with workings extending to depths of 1,900m below surface. With a well-
documented mining and geotechnical history and with more than 150 million tons of ore historically extracted,
mostly from underground mines but with numerous small open pits and glory holes also mined, the districts mining
conditions are well understood, and previous learnings are readily applicable to this Study.
The proposed mining operations involve both open pit and underground mining from five mineralised bodies in
the Project area, namely:
• the FMN, FME and FMS deposits for underground mining; and
• the Flat Mine (Nababeep) and Jan Coetzee deposits for open pit mining.
5 Mineral Resource for Nababeep, Jan Coetzee and Nababeep Kloof mines reported in ASX/JSE release of 29 March 2021: “Additional
Mineral Resource Estimate for the Okiep Copper Prospect, Flat Mines” available to the public on
http://www.orionminerals.com.au/investors/asx-jse-announcements/. Competent Person Mineral Resource: Dr Deon Vermaakt. Orion
confirms it is not aware of any new information or data that materially affects the information included above. The company confirms that
all material assumptions and technical parameters underpinning the estimates in the original release continue to apply and have not
materially changed. Orion confirms that the form and context in which the Competent Person’s findings are presented have not been
materially modified.
Mineral Resource for FMN, FMS and FME reported in ASX/JSE release of 10 February 2021: “Orion reports maiden JORC Mineral Resource for
the Okiep Copper Complex, Flat Mines” available to the public on http://www.orionminerals.com.au/investors/asx-jse-announcements/.
Competent Person Mineral Resource: Dr Dion Brandt. Orion confirms it is not aware of any new information or data that materially affects the
information included above. The company confirms that all material assumptions and technical parameters underpinning the estimates in
the original release continue to apply and have not materially changed. Orion confirms that the form and context in which the Competent
Person’s findings are presented have not been materially modified.
The open pits are planned to be mined using conventional drilling and blasting in conjunction with loading and
hauling methods. The underground deposits would be mined using trackless, mechanised mobile equipment.
Mine production would commence in Month 11 from FMN which has pre-existing decline and level accesses,
ventilation raises and some production areas already partially prepared for production blasting by the previous
mining operations. Scheduling has allowed installation of mine services and mine dewatering before start of
production at FMN as the underground workings are flooded to within 80m vertical depth from the decline
entrance.
The FM-Pit is scheduled to commence production in Month 16, allowing time for a new pit to be established and
to coincide with the commissioning of the mineral processing plant. The Flat Mine Pit deposit was partially mined
in the past via a small underground operation to a shallow depth. The delineated Mineral R
Figure 8: Plan showing the proposed production from the copper deposits within the Flat Mines Project area.
Underground Mining
Underground Mine Design
The Flat Mines would be accessed by decline from surface, with drill drives, access tunnels and draw point drives
to be developed. A new mine design was prepared for the FMN deposit, while for the FME and FMS mine designs,
the layouts prepared by the SAFTA PFS have been used. Planned dimensions for development excavations are
as listed in the following table.
Cubby
Excavation Profile Method Width (m) Height (m) Diameter (m) Factor
(Eq.m / m)
Declines Square Drill & Blast 5.0 4.5 n/a 1.3
Draw-point Drives Square Drill & Blast 5.0 4.5 n/a 1.2
Drill Drives Square Drill & Blast 6.0 4.0 n/a 1.0
Ventilation raises Circular Raise-bore n/a n/a 2.3 1.0
Table 6: Planned excavation dimensions.
Assumed development advance rates are based on two scheduled blast-times a day using the development
drilling parameters as shown below.
Item Planned Metric
Blast hole length 3.8m
Effective advance per blast 3.4m
Drill bit diameter 48mm
No of drilled holes per blast. 61
Table 7: Development drilling parameters.
The deposits targeted for underground mining display considerable variation in height and width. As a result,
three stoping methods are proposed to optimize extraction, dilution and mining costs. Historically the FMN ore
was being extracted successfully using Vertical Crater Retreat (VCR) mining. It is proposed to continue using this
method, supplemented by Bord & Pillar and Long Hole Open Stoping (LHOS) mining methods due to the size and
configuration of some zones of the known deposits. Typical VCR, Bord & Pillar and LHOS layouts are shown in the
next three figures.
Figure 9: An illustration of Vertical Crater Retreat (VCR) Stoping.
Figure 10: An illustration of Bord and Pillar mining.
Figure 11: An illustration of Long Hole Open Stoping.
Based on the estimated Mineral Resources (prepared by Competent Persons and classified in accordance with
the JORC Code (2012)), approximately 1.4 million production tonnes have been planned from FMN at an
average RoM grade of 1.17% Cu. The average production rate is expected to be 35,000 tpm over six and half
years.
Production stoping from FME is planned at 3.1 mt at an average RoM grade of 1.33% Cu over 4.6 years. A year
and half of decline development would be required to access the first stoping areas. From this point a further 10
months would be required to reach steady state production of 65,000 tpm. The head grade is variable ranging
from 0.7% Cu and peaking at 2.7% Cu.
Production stoping from FMS is planned at 2.9 mt at an average RoM grade of 1.31% Cu over 4.5 years. Sixteen
months of decline development would be required to access the first stoping areas. From this point a further 5
months would be required to reach steady state production of 65,000tpm. The head grade profile is similar to
FME ranging from 0.7% Cu and peaking at 2.5% Cu.
Dilution and recovery factors were applied to the underground Mineral Resource tonnages to determine the
scheduled RoM tonnes and grade. The modifying factors used for underground mine planning are shown in the
table that follows.
Waste Stope
Modifying Factors - Development Decline Stoping
Development Development
Geological & pillar losses (% tonnes) 0.0% 0.0% 0.0% 25.0%
Overbreak (% tonnes) 5.0% 5.0% 5.0% 5.0%
Overbreak grade (% Cu) 0.0% 0.0% 0.0% 0.0%
Mining recovery (% tonnes) n/a n/a 100% 95%
Table 8: Underground design modifying factors.
Underground Mine Ventilation Design
A diagram outlining the mine development, production and ventilation layout for FMN is shown below.
Figure 12: The FMN Deposit mine design.
Ventilation for all the underground mines would be via fresh air intakes down the declines and vent shafts and
return air upcasting through vent raises to surface. The ventilation requirements were determined by the
equipment scheduled to achieve the planned production targets. For the FMN, with a maximum production rate
of 35ktpm, the maximum equipment numbers required have a total effective engine power of 1,672 kW. The
quantity of air required to ventilate the FMN, based on 0.06 m 3/s per kW as stipulated by South African Mining
Regulations is 134m3/s. The ventilation requirements for the FME and FMS were determined in a similar way.
Open Pit Mining
Flat Mine (Nababeep) and Jan Coetzee Mineral Resources outcrop at surface and have been identified as
potential open pit operations. Contract mining is planned to be used for all drill & blast and load & haul activities
which will eliminate upfront mining fleet capital costs for Orion.
Pit optimisation was not performed at this concept study level, and the ultimate pit shells were determined by
estimating a realistic pit depth based on the specified pit slope criteria. Pit-shell optimisations will be performed
during the next study phase to improve the economics of the open pit operations. Production scheduling was
performed using the Datamine™ Enhanced Production Scheduler (EPS). The key mine design parameters used
to develop the conceptual pit designs are tabled below.
Flat Mine
Parameters Jan Coetzee
(Nababeep)
Face Angle (0) 90 90
Bench Height (m) 10 10
Berm Width (m) 5 5
Ramp Width (m) 15 15
Slope Angle (0) 53 57
Maximum ramp inclination 10% 10%
Mineralised block dimensions:
Width 25 25
Length 25 25
Height 10 10
Overburden block dimensions:
Width 25 25
Length 25 25
Height 10 10
Maximum scheduling rates:
Mineralised rock (tpm) 30,555 31,916
Overburden (tpm) 244,435 213,882
Table 9: Open Pit mine design criteria.
The Flat Mine (Nababeep) Mineral Resource is irregular in shape and approximately 200m in length and 35m at
its widest point, extending approximately 180m below surface. The proposed pit is planned to mine 1.05 million
tonnes at an average RoM grade of 1.32% Cu over a 3-year period to a depth of 150m, with a stripping ratio of
5.8:1 (waste tonnes: ore tonnes). Historical drift mining following the higher grade ‘seam’ has taken place in the
deposit from a small vertical shaft. The resultant voids from historic mining will need to be considered in the open
pit mining sequence, however, it is quite common to encounter these voids in open pit mines and mining can
be conducted safely by experienced contractors. A general view of the Flatmine (Nababeep) open pit including
the Mineral Resources model is shown in the following diagram. The grade profile shows an increasing trend as
the pit extends deeper, starting at 1.0%Cu and peaking at 2.5%Cu.
Figure 13: The Flat Mine (Nababeep) Open Pit.
The Jan Coetzee deposit also outcrops on surface and has an irregular structure comprising several lenses. The
Mineral Resource has a length of 170m on surface and is approximately 80m wide, extending 300m below
surface. The proposed pit is planned to mine 480,000 tonnes at an average RoM grade of 1.15% Cu over 18
months to a depth of 120m. The average stripping ratio is estimated to be 5.4 to 1 (waste tonnes : ore tonnes).
Similar to the Flat Mine Open Pit, the RoM product rate for Jan Coetzee Open Pit is expected to be approximately
30ktpm. A general view of the proposed pit including the Resource model is shown in the following diagram.
Figure 14: The Jan Coetzee Open Pit.
Dilution and recovery factors were applied to the open pit Mineral Resources to determine the scheduled RoM
tonnes and grade. Mining recovery was assumed to be 95%. Dilution was planned at 5% for the Flat Mine
(Nababeep) and 8% for the Jan Coetzee deposits respectively. Higher dilution is expected in Jan Coetzee due
to the multiple lens structures. The modifying factors used for open pit mine planning are shown in the table
below.
Flat Mine
Parameters Jan Coetzee
(Nababeep)
Dilution 5.0% 8.0%
Mining recovery 95% 95%
Swell factor 1.67 1.67
Table 10: Open Pit design modifying factors.
Break-even Grade Calculations
The Scoping Study operating costs were applied to the financial model to determine break-even grades for the
underground and open pit mining scenarios. Due to the stripping ratio of the two open pits averaging 5.7:1, this
has resulted in similar costs for both open pit and underground mining, hence similar break-even grades for the
two mining methods. These numbers are shown below.
Open
Cu Cut-off Grade Unit Combined Underground
Pit
All-in Sustaining Cost ZAR/t RoM 873 871 882
FX ZAR:USD 15.88 15.88 15.88
Total cash operating cost USD/t RoM 55 55 56
Cu price USD/t RoM 8271 8271 8271
Cu NSR % 97% 97% 97%
Net Cu price received USD/t RoM 8014 8014 8014
Unplanned Mining Dilution % 5.0% 5.0% 5.0%
Cu Plant Recovery % 87.4% 87.4% 87.4%
Break-even in-situ copper equivalent grade % 0.83% 0.82% 0.84%
Table 11: Break-even Grade calculations.
The Production Target was estimated from a Mineral Resources base comprised of 33% Measured, 46%
Indicated and 21% Inferred Mineral Resources.
Life-of-Mine Planned Production
The LoM mining production is summarised in the following table.
Parameter Combined FMN FME FMS FM Pit JC Pit
Tonnes mined (Mt) 9.01 1.44 3.15 2.89 1.05 0.48
Tonnes milled (Mt) 9.01 1.44 3.15 2.89 1.05 0.48
Grade diluted (% Cu) 1.29% 1.17% 1.33% 1.31% 1.32% 1.15%
Contained Cu (Kt Cu) 115.85 16.75 41.75 37.99 13.83 5.53
Table 12: LoM Planned Production.
Processing Plant and Product Sales
Overview
The Okiep cluster of copper deposits were intensively mined for 150 years until early 2000s and have produced
over 1.5 million tonnes of copper metal. The remarkable metallurgical consistency across deposits mined in the
district, with good recoveries using froth flotation for concentration of sulphide copper ore, is documented in
mine records and published papers. SAFTA undertook limited confirmatory metallurgical test work and achieved
results consistent with historic records.
Historical plant performance figures indicated that 85% to 94% of the copper was recovered into a concentrate
grading between 20% and 36% Cu, depending on the copper head grade and mineral composition. The copper
ore minerals were predominantly disseminated chalcopyrite and bornite with some chalcocite in the deeper
portions of the orebody. Overall grades were relatively consistent, between 1% – 2% copper. Processing for the
planned Okiep Copper Project is expected to treat very similar mineralisation.
The proposed design for the plant was compiled by METC Engineering Ltd and is a crushing-grinding-flotation
circuit with a design capacity of 65ktpm, producing copper concentrate containing Au and Ag by-products.
The concentrate will be exported and so transport costs have allowed shipping to Asian markets.
METC compiled capital cost estimates for the plant using new equipment and an alternative scenario of the
plant using second-hand equipment. A diagram showing the proposed flowsheet is shown overleaf.
Up
Figure 15: Processing plant flowsheet
Page 23 of 60
Metallurgical Test Work
The following table shows the assay results from concentrate analysis carried out during the SAFTA PFS on FMN
material in 2018, the main elements being the Cu and Au (at 2.18 ppm or g/t) 6. Deleterious elements are in low
concentrations and the concentrate can be described as “very clean”.
Assays
Elements Units First Second
Copper (%) 22.9 23.1
Nickel (ppm) 293 289
Cobalt (ppm) 60 63
Silica (%) 11.7 11.2
Aluminium (%) 1.57 1.59
Iron (%) 13.2 12.6
Manganese (ppm) 983 986
Gold (ppm) 2.18 2.17
Palladium (ppm) 0.98 1.14
Platinum (ppm) 0.22 0.23
Silver (ppm) >10 >10
Selenium (ppm) 335 324
Tellurium (ppm) 193 182
Arsenic (ppm) 34 34
Sulphur (%) 13.3 13.7
Table 13: Concentrate assay results.
It was recognised during the SAFTA PFS and by later work carried out by METC that the above sample cannot
be considered fully representative of the mineralised material and that future metallurgical test work with more
representative samples would be required during subsequent plant studies.
Given that the geology in the area is similar from one deposit to another, historical information from the previous
operations at Okiep Copper Mines provide a reasonable basis for selecting design criteria such as the Bond work
index. METC took historical information on the mill sizes with their energy consumption and plant throughput to
back estimate the Bond work index of the ball mills to be 15.5kWh/t. This was used for the required energy
consumption for this Study. In the next phases of project additional test work will be carried out to confirm this
estimate.
Processing Design
Crushing and Milling
Production material will be fed to a primary jaw crusher at 110 t/h either directly from underground or open pit
trucks or using front end loaders reclaiming from a RoM stockpile as required. Production material will be reduced
to -10mm and conveyed to the crushed ore stockpile which will contain eight hours of continuous mill feed. From
here material will be reclaimed into the milling circuit.
Mill feed is planned at a nominal 92 t/h. A single primary ball mill has been selected for the milling duty. The mill
cyclone cluster which separates discharge from the mill into coarse and fine streams is designed at a cut point
of 80% passing 106µm. The cyclones underflow (coarse material) is directed to a flash flotation unit. The overflow
6 Historical metallurgical test work from FMN was reported in the ASX/JSE release of 10 February 2021: “Orion reports maiden JORC Mineral
Resource…” available to the public on http://www.orionminerals.com.au/investors/asx-jse-announcements/. Competent Person Exploration
Results: Errol Smart. Orion company confirms that it is not aware of any new information or data that materially affects the information
included in the original market announcement. Orion confirms that the form and context in which the Competent Person’s findings are
presented have not been materially modified.
(finer material) slurry flows by gravity to the flotation conditioning tank where flotation reagents are added, and
the pH is adjusted.
Flotation
Over-grinding of the copper minerals and in particular bornite has been an issue at the Okiep Copper Project
historically and flash flotation was introduced to remove the copper liberated in the milling circuit and reduce
overgrinding of the softer copper minerals. METC also selected flash flotation in the flotation design. The mill
cyclone underflow is directed to the flash flotation unit and the underflow from the flash flotation will report to
the mill feed, closing the milling circuit. Flash flotation concentrate will be transferred by gravity to either the
recleaner cells for re-floating or to the final concentrate depending on concentrate grades.
The final tails stream from the process is pumped to the tails thickener where it is thickened to approximately 55%
solids to recover water before being pumped to the tailings dam. The final concentrate is delivered to the
concentrate thickener prior to filtration.
Process Control and Sampling
A PLC Controlled SCADA system will be installed to control the plant from a central control room. Automatic and
manual samplers, depending on the requirement, are planned to collect samples from the rougher and cleaner
concentrate streams and the cleaner and recliner tails to allow for good metallurgical control. Automatic
samplers are also planned to collect samples for metal accounting and plant control purposes. No allowance
has been made for online analysis at this stage although this could be added at a later stage.
Final concentrate is expected to be loaded onto trucks for dispatch and auger samplers are designed to
measure the concentrate grades on the trucks for quality control and for payment purposes while a weigh bridge
will measure the concentrate mass dispatched.
A diagram showing the layout of the process plant which is located adjacent to the FMN is shown overleaf.
Figure 16: Processing plant layout.
Plant Water Balance
The water balance estimates that raw water make-up required for the plant equates to 0.74m3 of water (68m3/h)
per tonne treated while there is no return water from TSF during the ramp-up phase. Once at steady state and
the return water is flowing at a consistent rate, the raw water requirement will reduce to 0.47m3 of water per
tonne treated (42m3/h). This assumes that 35% of water in the tailings stream is recycled back to the plant from
the TSF (25m3/h). Raw water for the plant will be sourced from either the Nababeep North Mine Shaft (NMS) or
Municipal water.
Tailings Storage Facility (TSF)
Overview
The TSF has been planned in a partly previously disturbed area near the process plant at FMN. The TSF is designed
to contain approximately 7.5 million tonnes of material over the planned 12-year operating life. A stormwater
dam and a return water dam (RWD) will be constructed as part of the facility. The TSF will be a based on the
upstream spigotted expansion method following the construction of a starter wall. The return water from the TSF
will be pumped into the RWD via a floating pontoon arrangement.
Waste Classification
As part of the SAFTA PFS, Digby Wells (Pty) Ltd undertook a waste classification and assessment study of the
tailings material as required by the Regulations regarding the Planning and Management of Residue Stockpiles
and Residue Deposits (2015). This was done in accordance with the Waste Classification and Management
Regulations, 2013 and the related Norms and Standards for Assessment of Waste for Disposal to Landfill, 2013.
Through this process, Digby Wells determined that the tailings material classifies as a Type 3 waste. Based on the
Norms and Standards for Disposal of Waste to Landfill 2013, a Type 3 waste must be disposed of to a facility with
a Class C liner design. One TSF design is therefore based on a Class C liner which is shown below.
Figure 17: Class C liner.
In September 2018, an amendment to the Regulations regarding the Planning and Management of Residue
Stockpiles and Residue Deposits (2015) was promulgated. In this amendment there is no longer a prescription for
liner requirements for residue deposits. The liner requirements are to be determined through a risk analysis, which
is based among other factors on the classification of the waste. As the tailings to be produced from the Flat
Mines Project area deposits are relatively benign, an alternative design to using a Class C liner is possible and
has been modelled.
Design Criteria
The following parameters have been used as the TSF design criteria:
• Design life of the facility: 12 years
• Processed Ore: Copper
• Processing plant production rate: 60,000 dry tpm nominal
• Tailings deposition rate: 57,900 dry tpm (based on a mass pull of 3.5%) nominal
• TSF capacity 7.2mt of dry tailings
• Particle SG of Tailings product: 2.7
• In-Situ void ratio: 1
• Placed dry density of Tailings: 1.4 t/m3
• Particle size distribution of product: 75% passing 106?m
• Safe Rate of Rise (RoR): 2.5m/annum
• A-Pan to lake evaporation depth factor: 0.75
• Minimum freeboard: 1m
General Engineering Infrastructure
Overview
Surface infrastructure for the Project takes the form of external power and water supply to the Project, internal
supply to the five mine locations, the process plant and the TSF, general buildings and access and haul roads. A
map of the proposed layout is depicted overleaf.
Figure 18: Project site general layout.
Where still relevant, infrastructure designs from the SAFTA PFS were retained for this Study otherwise updated
and new designs were compiled by METC who carried out the general infrastructure scope of the Study.
Water Supply
Water is planned to be sourced from the historical Nababeep North Mine Shaft (NMS) which will not be part of
the new planned mining activities. As part of the SAFTA PFS, SRK Consulting carried out pumping tests and
determined that 1,363m3/day can be abstracted with no effect on the water table (May 2019). Based on this
predicted supply and accounting for the various uses, the follow table shows that there is spare capacity of
203m3/day at steady state conditions.
Water Supply and Uses m3/day
North Mine Shaft supply 1,363
At steady state
Process Plant consumption with 35% return water from 1,032
the TSF
Potable water requirement 48
Mining and dust suppression water 80
All uses 1,160
Spare capacity from NMS 203
During plant ramp-up
Process Plant at full capacity with no return water from 1,632
the TSF
Additional water required during plant ramp-up 269
Table 14: Project water supply and uses.
Any shortfalls in water can be managed by drawing water from the FMN 5,000m 3 capacity collection dam which
is supplied via a settlement dam from the FMN decline dewatering and from other alternative sources. These
sources can be augmented from an existing Government owned water pipe-line from the Orange River which
currently supplies the Okiep area and the local Nama Khoi Municipal water supply. This pipeline traverses the
mining area within 3000m of the planned extraction plant.
Power Supply
The forecast load required for the facility was derived from the SAFTA PFS information and compared to similar
operations for benchmarking.
A similar sized mineral processing facility has a demand of ?4.5 MW for the processing plant. An additional 0.23
MW has been allowed for the TSF requirements. As the bench marked facility had an open cast mining operation,
the mining load of 4.87 MW was derived from the SAFTA PFS. The total operating load is therefore estimated at
9.60 MW and 10.0 MVA (pf = 0.96) as indicated in the table below.
Area Power Demand for 60ktpm
MW MVA
Plant & TSF 4.73 4.93
Mining 4.87 5.07
Total 9.60 10.00
Table 15: Project power demand.
Power can be supplied via the local municipal grid or directly from the national electricity supplier, Eskom. The
municipal power supply tariff is approximately 20% higher than that from Eskom. For this reason, it was decided
to cater for power supplied from Eskom although this requires a new 23km 66 kV power-line from the nearest
Eskom sub-station to FMN.
Incoming power is expected to be received at 11 kV to an 11 kV Main Consumer Substation located at FMN,
Power supply to mining facilities would be from the 11 kV reticulation network as required. Low voltage distribution
at 525V would be derived from distribution transformers for the supply to Motor Control Centres (MCC’s).
Environment, Health, Safety and Community
The health and safety systems already in place for Orion’s Prieska Project would be modified and updated to
meet the requirements of the Okiep Project. These systems are guided by Orion’s commitment to maintain best
practices for occupational health and safety management at its operations, as well as complying with all
regulatory prescriptions. Health and safety matters for mining operations in South Africa are regulated in terms of
the Mine Health and Safety Act 1996 (MHS Act).
The key elements of the safety and health management system to be put in place include:
• Risk management and planning – to ensure risks are identified and a plan formulated to manage them;
• Mandatory Codes of Practices, to provide guidance on health and safety policies and procedures;
• Management personnel – to implement, maintain and improve the management systems;
• Training and documentation – to ensure all personnel know how to work safely;
• Emergency preparedness – to handle unplanned events and limit their adverse effects; and
• Measuring and reporting Systems – to ensure the systems are affective and the well-being of all personnel
is being achieved.
Environmental Management
A baseline environmental audit was undertaken as part of the due diligence to assess the Project for acquisition.
The audit established that:
• The key environmental permissions to undertake exploration and mining activities in the Flat Mines Project
area have either been obtained or are already under application. Hence:
o crucial specialist studies, such as hydrological, biodiversity and heritage impact assessments have
been done precluding the existence of threatened ecosystems, protected areas and that would
prevent mining from taking place; and
o financial provisioning for mine closure is in place.
• The impact of historical mining activity on proposed mining and exploration activity is minimal since the
responsibility to rehabilitate and maintain all historical surface mine residue stockpiles within the mining
and prospecting right areas remains the obligation of the O’Okiep Copper Company;
• There are no protected areas within the mining and prospecting right areas.
• Additional permitting or amendments to the current environmental permits required before the activities
planned in the Scoping Study can be undertaken are manageable and can be obtained within 14
months, consisting of:
o environmental permitting for the proposed new 25km 66kV overhead power-line;
o authorisation to expand the TSF from the 4.5 Mt storage capacity previously applied for to the
7.2Mt capacity in the Scoping Study; and
o authorisations to append open pit mining at Jan Coetzee and Flat Mine (Nababeep) into the
environmental authorisation application currently being assessed.
The Project is planned to aim for an eventual carbon neutral footprint for all metals being produced from the
venture. A ‘Carbon Neutral Roadmap’ will be developed that aims to reduce the Scope 1 and 2 emissions
intensity to zero (0 tCO2e/t Cu) over the LoM. The increased use of renewable energy sources, purchasing zero
carbon electricity, the increase use of battery-electric vehicles and preferentially supplying concentrates to
customers with recognised emissions reduction targets will be investigated as part of the roadmap.
Community Engagement
As part of the SAFTA Mining Right Application currently being processed, a Social and Labour Plan (SLP) was
submitted to the authorities in which commitments relating to Human Resources Development (HRD) and Local
Economic Development (LED) were stated as a condition of being granted permission to mine. The HRD and LED
activities target providing education and training to members of the local community and supporting small
businesses in the Project’s vicinity. The activities committed to will cost AUD0.63 million (ZAR7 million), to be spent
over 5 years.
Orion views the SLP as a dynamic document that will continually be revised as the Project develops and has
already had preliminary discussions with the local municipality to understand the current needs of the local
community.
Operating Costs
The operating cost estimates were compiled from various sources including:
• the SAFTA PFS;
• contractor quotes; and
• benchmark numbers supplied by Study contributors.
Labour and fuel costs are included within each discipline.
The total operating costs for the combined underground and open pit mining activities amount to ZAR880/tonne
treated, which is summarised in the table below.
Operating Costs
ZAR/RoM t AUD/RoM t
Open Pit & Underground
Mining 488 43.9
Ore Processing 228 20.5
General Surface 18 1.6
Conc Transport Charges 39 3.5
General & Admin 14 1.3
Environmental 0.5 0.04
Off-mine Costs 0.9 0.1
Royalties (Government) 70 6.3
Sustaining Capex 21 1.9
Total 880 79.1
Table 16: Operating Expenditure to an estimation accuracy of ± 25%.
Underground mining costs were estimated by A&B Global. The costs were obtained from benchmarked numbers
and compared to contractor-supplied rates from the local area. The average mining development rate was
estimated at ZAR35,000/metre, assuming a contractor mining model, whereby the contractor will supply the
mining fleet. The stoping costs were estimated per mining method and applied to the respective tonnes per
method from the production schedule. The underground mining costs also includes the grade control drilling
program. Labour and fuel costs were included.
Open pit costs were based on written contractor rates for drill & blast and load & haul, as of March 2021. The
services and utilities costs were estimated by the mining team conducting the Scoping Study. The drill and blast
costs include a 5% allowance for pre-split drilling. The load and haul costs are based on a rate of ZAR51.50/tonne
at surface, with a depth premium of 5% increase per 10m additional pit depth. Based on the average stripping
ratio of the two open pits of 5.7:1, the direct open pit mining cost per tonne treated equates to ZAR486/tonne.
In addition to the direct mining costs, mobilisation and de-mobilisation costs of ZAR1.9 million for the underground
mining contractor and ZAR1.6 million for open pit contractor were assumed.
Processing plant working costs were compiled by METC from first principles including labour, reagent prices
based on estimated consumption rates per tonne treated and milling and crushing consumables, based on
planned wear rates based on the estimated ore hardness. The steady state unit cost has been estimated at
ZAR228 per tonne treated.
Concentrate handling and transport costs equates to ZAR39/tonne RoM treated. The estimate is derived from
USD32.82/tonne of concentrate for overland truck transport and USD21.88/tonne of concentrate for shipping in
containers, a total of USD54.70/tonne of concentrate or ZAR939/tonne of concentrate. The trucking costs has
been taken from the SAFTA PFS while the shipping cost was taken from Orion’s Prieska Project’s BFS costs and is
to a smelter in China. Both costs have been escalated into 2021 terms.
Capital Expenditure and Project Program
Capital Expenditure
The estimated capital budget has been prepared to an estimation accuracy of ±25% and according to work
packages reflecting how the Project construction is intended to be controlled. Contingency has been estimated
at 15% of the underlying Capex items. The total capital cost to construct the mine is estimated to be ZAR595
million (AUD53 million) as summarised below.
Capex Summary ZAR ('000) AUD ('000)
Processing Plant 221,110 19,866
Tailings Storage Facility 61,343 5,511
Eskom Powerline 60,973 5,478
EPCM 46,067 4,139
Surface Infrastructure 45,304 4,070
Flat Mines Surface Ventilation 25,174 2,262
Flat Mines Underground Infrastructure 21,806 1,959
Surface Electrical infrastructure 13,288 1,194
Access Roads and Haul roads 5,965 536
Open Pit Power Supply & Surface Reticulation 5,627 506
Geological Capex 5,300 476
Miscellaneous Capex 3,250 292
Environmental rehabilitation 2,500 225
Sub-total 517,706 46,515
Contingency - 15% 77,656 6,977
Total CAPEX 595,362 53,492
Table 17: Capital Expenditure estimate to an estimation accuracy of ± 25%.
Peak funding required is ZAR663 million (AUD58 million). The capex is spread over the 12-year LoM as FME, FMS
and the Jan Coetzee open pit are developed in the middle to later years. The environmental rehabilitation
capex is incurred in Year 14, at the end of the Project’s currently planned life.
The capital estimate was compiled by the various engineering consultants employed by Orion who participated
in the Study. The following companies contributed to the capital estimate:
• A&B Global Mining – Underground and open pit mining;
• METC – Processing plant and general engineering;
• METC – Bulk power and bulk water infrastructure;
• Gariep Mining – Processing plant equipment;
• Epoch Resources – Tailings storage facility; and
• ABS Africa – Environmental rehabilitation.
The above consultants compiled capital estimates from historical and-or benchmarked costs and quotations
and applied factorised estimating principals where appropriate.
Project Program
The Okiep Project entails re-establishing existing underground mining operations at Flat Mine North along with
new open pits (Flat Mine North, and Jan Coetzee West) and underground operations (at Flat Mine East and
South) as well as new infrastructure and a process plant to support a steady state production profile of 60-65ktpm
for approximately 12 years. Some infrastructure remains intact, such as Flat Mine North decline which assist with
the project start-up. All the remaining infrastructure will be built as new facilities.
Feasibility Study Phase
Based on approval from the Orion Board to proceed with the Okiep Copper Project Scoping Study, the next
phase is to undertake a Feasibility Study and assuming a successful economic outcome, proceed to a funding
and construction phase. The deliverables and key activities are outlined as follows:
• completion of exploration drilling program to ensure alignment with Feasibility Study requirements;
• completion of a Feasibility Study document to meet the needs of fund raising and project execution;
• progressing and completing key regulatory permitting applications;
• confirming requirements for long-lead procurement items; and
• selecting an EPCM/EPC contractor for the execution phase.
Execution Phase
The execution team would consist of various Orion staff at a corporate level with the additional of technical staff
as part of a dedicated Owner’s Team. An EPCM team would manage the day to day running of the Project
including detailed design, procurement and construction activities. A proposed Project team is outlined in the
organogram below.
Figure 19: Project execution team structure.
Construction Schedule
Assuming that the remaining regulatory permits are approved, the Company’s internal approvals are completed
and the project is fully-funded then project implementation will take 16 months to first production. A high-level
schedule summary is presented in the following figure which shows activities up to when the 65ktpm production
levels would be reached.
Duration
Activity (months/weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
)
-
Infrastructure 57.3
Project FEED 2.4
Procurement - early contracts 2.0
Permanent Bulk Power Infrastructure 6.0
Permanent Bulk Water Infrastructure 5.0
Surface infrastructure 9.0
TSF design and construction 13.0
Process plant design and construction 14.3
Process Plant Cold commissioning 1.5
Process Plant Hot commissioning 1.5
Flat Mine - Open Pit 43.0
Flat Mine North - UG 49.0
Figure 20: Project Execution Schedule.
Market Analysis and Sales
The Copper Market
Copper metal is extensively used in many applications, mainly electrical cables and motors, piping, construction
and in many metal alloys. Copper is also widely used in the heating and air conditioning industries due to its high
heat conductivity. The global copper metal market is in the region of 24Mt per annum. Copper prices fell from
USD8,920 per tonne in 2011 to USD6,000 per tonne by 2019. Thereafter, prices fell further as the COVID-19 shock
hit world markets. Since April 2020, the price has climbed substantially, peaking at over USD9,000/tonne at the
time of writing (see below).
Figure 21: Copper stocks and price.
The Study has used real price long term forecasts from S&P Global. These numbers are shown in the table
below.
Standard & Poor Forecast Unit 2022 2023 2024 2025 2026 2027 Long Term
March 2021 - Cu USD/lb 3.44 3.29 3.20 3.37 3.56 3.59 3.38
March 2021 - Cu USD/tonne 7593 7262 7064 7425 7844 7918 7452
March 2021 – Au USD/oz 1889 1776 1645 1553 1572 1522 1631
March 2021 - Ag USD/oz 24.26 22.65 20.58 19.50 --- --- 21.88
Exchange Rates USD:ZAR 17.16 17.47 17.45 17.27 17.27 17.38 17.31
Table 18: Metal price forecasts.
Concentrate Customers
Historically, the concentrates produced from the Okiep Copper Project were regarded as clean with low levels
of impurities. Current assay results have indicated that this is likely to be the case going forward. Orion therefore
does not foresee any restrictions on where the concentrates can be sold.
The only copper smelter in South Africa is at the Phalaborwa Mine in the northern-most province of South Africa,
which is owned by Phalaborwa Mining Company and 1,780 km from the Project site. From recent discussions with
Phalaborwa, the smelter has spare capacity. This option will be investigated further in the next round of studies.
Due to Chinese expansion, global growth in primary smelting capacity has out-paced increases in copper
concentrate production over recent years. The Company anticipates selling at least part of its production into
the Asian market in which there are a multitude of potential buyers.
Concentrate Loading and Transport
Orion envisages that a combination of road and rail from the mine site will be used to transport the concentrates
to port. The Port of Saldahna is the preferred destination while other ports remain available if required. Road
transport to Bitterfontein (195 km from the mine) and rail to Saldanha (a further 290 km) is the option which
minimises road transport. Alternatively, road all the way to Saldanha (486 km) is an option if rail turns out not to
be feasible. The logistical aspects of the project will be investigated in more detail in further Project studies.
Financial Evaluation
The evaluated phase of the Project has undiscounted pre-tax cashflows of approximately ZAR4.61 billion or
AUD413 million pre-tax (ZAR3.24 billion or AUD291 million post-tax) and), a pre-tax Net Present Value (NPV) of
approximately ZAR1.90 billion or AUD170 million (ZAR1.27 billion or AUD114 million post-tax), using non-inflation-
adjusted estimates and a discount rate of 10%. The Internal Rate of Return (IRR) is approximately 44% pre-tax
(37% post-tax). The NPV is based on long-term forecast metal prices from S&P Global of USD7,593/tonne for
copper, USD24/oz for silver and USD1,889/oz for gold for the first year of valuation. Peak funding requirements
amount to ZAR643 million or AUD58 million including a 15% contingency allowance on the Capex estimate.
Payback is planned to occur approximately 3 years from the start of construction.
AISCs over the duration of the plan would be approximately AUD6,904/t (USD4,478/t) copper metal sold. The
realised metal price (net of smelter charges) is estimated to be approximately AUD11,473/t (USD7,441/t) copper
metal sold, yielding in the order of a 40% all-in-sustaining margin. The overall operating break-even grade is
estimated at 0.83% copper, well below the diluted grade of 1.29% copper, applied in the production schedule
to establish the production target.. During and beyond this initial phase, it is anticipated that possible mine-life
expansions and extensions would be underpinned by a combination of Mineral Resources not yet incorporated
into the mining plan, as well as new discoveries which will require additional investment for the exploration effort.
Significant potential for nearby satellite deposits has been identified.
The production plan is estimated on the steady-state processing of 65ktpm of mineralised material. Once steady-
state production would be reached, variations in cash-flow are expected to be due primarily to variations in
head-grade. The main Project metrics are shown in the following table. Note that valuation is performed in ZAR,
and figures presented in AUD is converted at the rate of ZAR11.13 : 1AUD
Parameter Unit Total Capex Yr 1 FY 1 FY 2 FY 3 FY 4 FY 5 FY 6 FY 7
ROM Tonnage (Processed) tonnes 9,010,829 463,450 780,000 780,000 780,001 780,000 780,000 780,000
Plant Feed Grade - Cu % 1.3% 0.00% 0.60% 1.13% 1.31% 1.30% 1.15% 1.12% 1.98%
Plant Recovery - Cu % 87.4% 0.0% 55.6% 86.6% 88.4% 87.6% 86.2% 85.8% 91.0%
Concentrate Sold - Cu tonnes 386,787 15,877 30,694 33,961 33,756 31,004 30,472 45,835
Metal Contained - Cu tonnes 102,329 3,497 7,631 9,068 8,979 7,768 7,534 14,294
Revenue (Post-NSR) ZAR '000 13,066,950 - 413,072 913,898 1,138,755 1,162,180 996,843 928,256 1,607,787
Selling & Realisation Charges ZAR '000 - - -438 -656 -656 -656 -656 -656 -656
Net Revenue ZAR '000 13,066,950 - 412,634 913,241 1,138,098 1,161,524 996,186 927,599 1,607,130
Mining, Development, Services Cost ZAR '000 -4,557,646 -4,090 -351,550 -462,078 -446,489 -490,902 -423,890 -282,367 -339,495
Processing Cost ZAR '000 -1,903,205 - -105,447 -162,671 -162,671 -162,671 -162,671 -162,671 -162,671
General Surface, Admin,
Env ironmental and Off-mine Costs ZAR '000 -230,375 -4,610 -11,658 -18,656 -16,697 -20,927 -18,081 -18,302 -18,365
Royalties (Govt.) ZAR '000 -628,905 - -2,065 -4,569 -5,694 -50,692 -46,032 -53,557 -112,545
Cash Operating Costs ZAR '000 -7,320,130 -8,701 -470,720 -647,975 -631,551 -725,191 -650,673 -516,897 -633,076
Cash Operating Profit ZAR '000 5,746,820 -8,701 -58,086 265,267 506,548 436,332 345,513 410,702 974,054
Project Capital ZAR '000 -595,362 -366,432 -173,545 -1,725 -1,725 -4,599 -7,986 -11,068 -
Sustaining Capital ZAR '000 -188,326 - -21,361 -40,182 -28,762 -19,756 -14,788 -13,605 -12,471
Net Cash Flow Pre-Tax ZAR '000 4,607,835 -375,132 -267,514 195,268 445,135 381,174 294,375 358,181 919,609
Income Tax ZAR '000 1,367,017 - - - - 67,161 91,910 111,169 278,682
Net Cash Flow After Tax ZAR '000 3,240,818 -375,132 -267,514 195,268 377,974 289,265 183,206 79,500 853,521
Page 38 of 60
Parameter Unit Total FY 8 FY 9 FY 10 FY 11 FY 12 FY 13 FY 14
ROM Tonnage (Processed) tonnes 9,010,829 780,000 780,000 780,000 780,000 746,577 802
Plant Feed Grade - Cu % 1.3% 1.11% 1.20% 1.00% 1.66% 1.41% 0.06% 0.00%
Plant Recovery - Cu % 87.4% 86.3% 86.7% 84.8% 90.5% 89.2% 6.5% 0.0%
Concentrate Sold - Cu tonnes 386,787 30,414 31,949 28,434 40,097 34,271 23
Metal Contained - Cu tonnes 102,329 7,508 8,184 6,638 11,767 9,455 4
Revenue (Post-NSR) ZAR '000 13,066,950 862,033 1,076,026 959,797 1,678,993 1,328,719 592 -
Selling & Realisation Charges ZAR '000 -656 -656 -656 -656 -656 -55 -
Net Revenue ZAR '000 13,066,950 861,377 1,075,369 959,140 1,678,337 1,328,063 538 -
Mining, Development, Services Cost ZAR '000 -4,557,646 -395,914 -411,833 -342,628 -280,477 -321,750 -4,182 -
Processing Cost ZAR '000 -1,903,205 -162,671 -162,671 -162,671 -162,671 -160,898 -10,150 -
General Surface, Admin,
Env ironmental and Off-mine Costs ZAR '000 -230,375 -22,020 -22,204 -20,232 -18,102 -18,102 -2,318 -100
Royalties (Govt.) ZAR '000 -628,905 -34,627 -57,261 -51,320 -117,530 -93,010 -3 -
Cash Operating Costs ZAR '000 -7,320,130 -615,232 -653,970 -576,851 -578,780 -593,760 -16,653 -100
Cash Operating Profit ZAR '000 5,746,820 246,144 421,399 382,290 1,099,557 734,302 -16,115 -100
Project Capital ZAR '000 -595,362 -118 -6,259 -8,813 -10,217 - -2,875 -
Sustaining Capital ZAR '000 -188,326 -8,461 -6,126 -6,765 -7,460 -8,046 -542 -
Net Cash Flow Pre-Tax ZAR '000 4,607,835 210,144 380,483 341,749 1,046,909 696,950 -19,498 -
Income Tax ZAR '000 1,367,017 66,088 118,191 106,129 314,398 213,289 - -
Net Cash Flow After Tax ZAR '000 3,240,818 91,953 274,355 27,350 833,620 696,950 -19,498 -100
Table 19: Production profile and expected cash flows.
The NPV estimate is most sensitive to the copper grade, followed by the copper price USD : ZAR
exchange rate and copper recovery, as shown in Figure 2. The main production and financial metrics
for the Project are shown in Table 1.
Copper contributes 93.7% of the net revenue (after allowing for concentrate logistics, treatment costs
and refining charges), followed by gold credits that contributes 4.9%, and the balance being silver
credits.
Risk Assessment
The ten headline risks identified for the Project, were ranked according to a likelihood and
consequence measures, with the resulting risk rating out of 25 plotted below.
Figure 22: Headline risks.
For and on behalf of the Board.
Errol Smart
Managing Director and CEO
3 May 2021
ENQUIRIES
Investors Media JSE Sponsor
Errol Smart – Managing Director & CEO Nicholas Read Monique Martinez
Denis Waddell – Chairman Read Corporate, Australia Merchantec Capital
T: +61 (0) 3 8080 7170 T: +61 (0) 419 929 046 T: +27 (0) 11 325 6363
E: info@orionminerals.com.au E: nicholas@readcorporate.com.au E: monique@merchantec.co.za
Competent Person’s Statements
The Mineral Resources for Nababeep, Jan Coetzee and Nababeep Kloof mines were extracted from the ASX/JSE
report entitled “Additional Mineral Resource Estimate for the Okiep Copper Prospect, Flat Mines” created on 29
March 2021 and available to the public on http://www.orionminerals.com.au/investors/asx-jse-announcements/.
The Competent Person for these Mineral Resources is Dr Deon Vermaakt. Orion confirms it is not aware of any new
information or data that materially affects the information included above. The company confirms that all
material assumptions and technical parameters underpinning the estimates in the original release continue to
apply and have not materially changed. Orion confirms that the form and context in which the Competent
Person’s findings are presented have not been materially modified.
The Mineral Resources for FMN, FMS and FME were extracted from the ASX/JSE report entitled “Orion reports
maiden JORC Mineral Resource for the Okiep Copper Complex, Flat Mines” created on 10 February 2021 and
available to the public on http://www.orionminerals.com.au/investors/asx-jse-announcements/. The Competent
Person for these Mineral Resources is Dr Dion Brandt. Orion confirms it is not aware of any new information or data
that materially affects the information included above. The company confirms that all material assumptions and
technical parameters underpinning the estimates in the original release continue to apply and have not materially
changed. Orion confirms that the form and context in which the Competent Person’s findings are presented have
not been materially modified.
Disclaimer
This release may include forward-looking statements. Such forward-looking statements may include, among other
things, statements regarding targets, estimates and assumptions in respect of metal production and prices,
operating costs and results, capital expenditures, mineral reserves and mineral resources and anticipated grades
and recovery rates, and are or may be based on assumptions and estimates related to future technical,
economic, market, political, social and other conditions. These forward-looking statements are based on
management’s expectations and beliefs concerning future events. Forward-looking statements inherently involve
subjective judgement and analysis and are necessarily subject to risks, uncertainties and other factors, many of
which are outside the control of Orion. Actual results and developments may vary materially from those expressed
in this release. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-
looking statements. Orion makes no undertaking to subsequently update or revise the forward-looking statements
made in this release to reflect events or circumstances after the date of this release. All information in respect of
Exploration Results and other technical information should be read in conjunction with Competent Person
Statements in this release (where applicable). To the maximum extent permitted by law, Orion and any of its
related bodies corporate and affiliates and their officers, employees, agents, associates and advisers:
• disclaim any obligations or undertaking to release any updates or revisions to the information to reflect
any change in expectations or assumptions;
• do not make any representation or warranty, express or implied, as to the accuracy, reliability or
completeness of the information in this release, or likelihood of fulfilment of any forward-looking statement
or any event or results expressed or implied in any forward-looking statement; and
• disclaim all responsibility and liability for these forward-looking statements (including, without limitation,
liability for negligence).
JORC (2012) Table 1: Section 4 Estimation and Reporting of Ore Reserves modified for a Scoping Study which includes an approximate Production
Target and/or Forecast Financial Information (as advised in the ASX Scoping Study Interim Guidelines). No Ore Reserves are being reported.
(Criteria listed in Section 1, and where relevant in Section 2 and 3, also apply to this section.)
Commentary – Open Pit: Flat Mine (Nababeep) and Jan
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
Coetzee
• Description of the Mineral • No Ore Reserves are reported. • No Ore Reserves are reported.
Resource estimate used as a
• The preliminary production target is based on the Mineral • The preliminary production target is based on the
basis for the conversion to an
Resources for the Okiep Project classified and reported in Mineral Resources for the Okiep Project classified and
Ore Reserve.
accordance with JORC Code 2012 in ASX release 10 reported in accordance with JORC Code 2012 in ASX
• Clear statement as to
February 2021. release 29 March 2021.8
whether the Mineral
Resources are reported • The Mineral Resource comprises 8.9Mt at 1.37% Cu, • The Inferred Mineral Resources estimated for the Flat
Mineral Resource additional to, or inclusive of, containing 122,000 tonnes copper; consisting of a Measured Mine (Nababeep), Jan Coetzee Mine and
estimate for the Ore Reserves. Resource of 3,505,000 tonnes at 1.41% Cu, an Indicated Nababeep Kloof Mine deposits, total 2.5 million
conversion to Ore Resource of 5,001,000 tonnes at 1.38% Cu and an Inferred tonnes grading 1.4% copper for 35,000 tonnes of
Reserves Resource of 401,000 tonnes at 0.84% Cu. The total Mineral contained copper.
Resource is tabulated in the body of the announcement.7
• The Mineral Resource Estimate for Nababeep Kloof
• Whether the Mineral Resources are reported inclusive or Mine is excluded from the preliminary production
exclusive of the Ore Reserves is not applicable as no Ore target for this announcement.
Resources are reported.
• Whether the Mineral Resources are reported inclusive
or exclusive of the Ore Reserves is not applicable as
no Ore Resources are reported.
7 Mineral Resource reported in ASX/JSE release of 10 February 2021: “Orion reports maiden JORC Mineral Resource for the Okiep Copper Prospect, Flat Mines” available to the public on
http://www.orionminerals.com.au/investors/asx-jse-announcements/. Competent Person Mineral Resource: Dr Dion Brandt. Orion confirms it is not aware of any new information or data that
materially affects the information included above. The company confirms that all material assumptions and technical parameters underpinning the estimates in the original release continue to
apply and have not materially changed. Orion confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified.
8
Mineral Resource reported in ASX/JSE release of 29 March 2021: “Additional Mineral Resource Estimate for the Okiep Copper Prospect, Flat Mines” available to the public on
http://www.orionminerals.com.au/investors/asx-jse-announcements/. Competent Person Mineral Resource: Dr Dion Brandt. Orion confirms it is not aware of any new information or data that
materially affects the information included above. The company confirms that all material assumptions and technical parameters underpinning the estimates in the original release continue to
apply and have not materially changed. Orion confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified.
Commentary – Open Pit: Flat Mine (Nababeep) and Jan
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
Coetzee
• Comment on any site visits • Not applicable as no Ore Reserve stated. • Not applicable as no Ore Reserve stated.
undertaken by the
Competent Person and the
Site visits outcome of those visits.
• If no site visits have been
undertaken indicate why this
is the case.
• The type and level of study to • Pre-feasibility and feasibility studies are planned but have • Pre-feasibility and feasibility studies are planned but
enable Mineral Resources to not been completed; accordingly, an Ore Reserve is not have not been completed; accordingly, an Ore
be converted to Ore being classified and reported. Reserve is not being classified and reported.
Reserves.
• A Scoping Study Technical Report has been completed at • A Scoping Study Technical Report has been
• The Code requires that a
a low level of confidence relative to a Feasibility Study. The completed at a low level of confidence relative to a
study to at least Pre-Feasibility
Scoping Study has been prepared to an accuracy level of Feasibility Study. The Scoping Study has been
Study level has been
± 25% using Measured, Indicated and Inferred Mineral prepared to an accuracy level of ± 25% using
undertaken to convert
Resources; appropriate mine planning and modifying Measured, Indicated and Inferred Mineral Resources;
Study status Mineral Resources to Ore
factors have been applied commensurate to a Scoping appropriate mine planning and modifying factors
Reserves. Such studies will
Study level of accuracy and are deemed to have have been applied commensurate to a Scoping
have been carried out and
reasonable prospects of being technically achievable and Study level of accuracy and are deemed to have
will have determined a mine
economically viable. reasonable prospects of being technically
plan that is technically
achievable and economically viable.
achievable and
economically viable, and
that the material Modifying
Factors have been
considered.
Cut-off • The basis of the cut-off Break-even grade calculations Break-even grade calculations
parameters grade(s) or quality The Scoping Study operating costs were applied to the financial • The Scoping Study operating costs were applied to
parameters applied. model to determine break-even grades for the underground mining the financial model to determine break-even grades
scenario. Very similar break-even grades for the two mining methods for the open-pit mining scenario. The stripping ratio of
resulted. These numbers are discussed in detail in the announcement. the two open-pits average 5.7:1, resulting in the open-
pit costs being very similar to the underground costs
and very similar break-even grades for the two mining
methods. These numbers are discussed in detail in the
announcement.
Commentary – Open Pit: Flat Mine (Nababeep) and Jan
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
Coetzee
• The method and assumptions • No Ore Reserves are reported. • No Ore Reserves are reported.
used as reported in the Pre-
• The Scoping Study used DatamineTM and an MSO as
Feasibility or Feasibility Study • Pit optimisation was not performed at this concept
detailed in the body of the report. Deductions were made
to convert the Mineral study level, the ultimate pit shells were determined by
for material excluded by the MSO, geological and pillars
Resource to an Ore Reserve estimating the optimal depth based on the specified
losses and a mining extraction factor. Dilution is included
(i.e. either by application of slope criteria. Pit-shell optimisations will be performed
during the MSO process. The Mineral Resource conversion
appropriate factors by during the next study phase to improve the
factors are listed below:
optimisation or by preliminary economics of the open pit operations. Production
or detailed design). The • Dilution and recovery factors were applied to the Mineral scheduling was performed using the Datamine™
choice, nature and Resource tonnages to determine the potential RoM tonnes Enhanced Production Scheduler (EPS). The key mine
appropriateness of the and grade. The modifying factors used for underground design parameters used to develop the conceptual
selected mining method(s) mine planning are shown in the body of the report. pit designs are tabled below.
and other mining parameters
The modifying factors, preliminary designs and schedules
including associated design Material assumptions regarding the timeframe for
were applied to the Mineral Resources classified and
issues such as pre-strip, development and production:
released in February 2021 for the FMN, FMS and FME mines).
access, etc. The assumptions
• It is assumed licensing and permitting is in place,
made regarding Material assumptions regarding timeframe for development and
funding is procured and the planned mining
geotechnical parameters production:
sequence is completed to this point following which
Mining factors or (e.g. pit slopes, stope sizes,
• It is assumed that the that the necessary licences and the open-pits will commence.
assumptions etc.), grade control and pre-
production drilling. The major permits are granted by the authorities and that funding is • Mining Method: Conventional open-pit mining will be
assumptions made, and procured. carried out by a mining contractor.
Mineral Resource model used • The mine model scenario for the Scoping Study can be • Geotechnical: A geotechnical assessment report is
for pit and stope optimisation summarised as the establishment of underground planned in order to plan the open pit designs in more
(if appropriate). operations to extract Measured, Indicated and Inferred detail
• The mining dilution factors Mineral Resource from underground to an approximate • Existing Infrastructure: Only basic roads are in place
used. depth of 610 metres accessed via existing and planned for the two open-pit mines.
• The mining recovery factors underground declines. • Additional Infrastructure: Power (lighting) and water
used. reticulation is needed to be installed for the two
• Any minimum mining widths • Mining Method: Tunnel development is planned to be with
open-pit mines.
used. trackless equipment loading blasted rock into trucks to be
• The way Inferred Mineral hauled to surface via declines. Production mining will be
Resources are utilised in from Vertical Crater Retreat, Long-hole stoping and Bord
mining studies and the and Pillar methods depending on the geometry of the
sensitivity of the outcome to deposits. Also using trackless equipment.
their inclusion. • Tunnel dimensions designed at 5.5m x 4.5m high for main
• The infrastructure ramps, haulages and draw-point drives and 6 m x 4 m for
requirements of the selected ore drill drives
mining methods.
• Geotechnical: Further geotechnical studies are
recommended for the next phase of technical studies.
Infrastructure Requirements for the chosen mining methods:
o Existing Infrastructure: FMN has an existing decline down to
180 m below surface.
o Additional Infrastructural Requirements for the chosen
mining methods: FME, FMS will require new decline
development and stope development before production
starts. All ug mines will require new ventilation fans and
additional vent raises into the ug workings. Surface water
storage dams will be required for the three underground
mines.
Commentary – Open Pit: Flat Mine (Nababeep) and Jan
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
Coetzee
• The metallurgical process • The design of the processing plant allows for treatment of • The design of the processing plant allows for
proposed and the underground and open-pit material. treatment of underground and open-pit material.
appropriateness of that
• Metallurgical Process: conventional, crushing, grinding and • Metallurgical Process: conventional, crushing,
process to the style of
froth flotation processing is proposed for the mined material grinding and froth flotation processing is proposed for
mineralisation. Whether the
which is designed to produce saleable concentrates of Cu the mined material which is designed to produce
metallurgical process is well-
with the potential for Ag and Au as by-products. saleable concentrates of Cu with the potential for Ag
tested technology or novel in
and Au as by-products.
nature. The nature, amount • Appropriateness: appropriate for the type of material
and representativeness of anticipated from the mining operation. • Appropriateness: appropriate for the type of material
metallurgical testwork anticipated from the mining operation.
• Tested Technology: The processing technology used for this
undertaken, the nature of the
Metallurgical Project is commonly used in industry and was successfully • Tested Technology: The processing technology used
metallurgical domaining
factors or used during the previous operations. Historical plant for this Project is commonly used in industry and was
applied and the
assumptions performance figures indicated that 85 to 94% of the copper successfully used during the previous operations.
corresponding metallurgical
was recovered into a concentrate grading between 20% Historical plant performance figures indicated that 85
recovery factors applied. Any
and 36% Cu, depending on the copper head grade and to 94% of the copper was recovered into a
assumptions or allowances
mineral composition. The copper ore minerals were concentrate grading between 20% and 36% Cu,
made for deleterious
predominantly disseminated chalcopyrite and bornite with depending on the copper head grade and mineral
elements.
some chalcocite in the deeper portions of the orebody. composition. The copper ore minerals were
• The existence of any bulk
Overall grades were relatively consistent, between 1 – 2% predominantly disseminated chalcopyrite and
sample or pilot scale testwork
copper. Processing for the planned Okiep Copper Project is bornite with some chalcocite in the deeper portions
and the degree to which
expected to treat very similar mineralisation. of the orebody. Overall grades were relatively
such samples are considered
consistent, between 1 – 2% copper. Processing for the
representative of the • Metallurgical Test Work: The SAFTA PFS reported testwork
planned Okiep Copper Project is expected to treat
orebody as a whole. For results on FMN material, the main elements being the Cu
very similar mineralisation.
minerals that are defined by and Au (at 2.18 ppm or g/t). It was recognised during the
Commentary – Open Pit: Flat Mine (Nababeep) and Jan Coetzee
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
a specification, has the ore SAFTA PFS and by later work carried out by METC that the • Metallurgical Test Work: The SAFTA PFS reported
reserve estimation been above sample cannot be considered fully representative of testwork results on FMN material, the main elements
based on the appropriate the mineralised material and that future metallurgical test being the Cu and Au (at 2.18 ppm or g/t). It was
mineralogy to meet the work with more representative sample will be required recognised during the SAFTA PFS and by later work
specifications? during subsequent plant studies. Given that the geology in carried out by METC that the above sample cannot
the area is similar from one deposit to another, historical be considered fully representative of the mineralised
information from the previous operations at Okiep Copper material and that future metallurgical test work with
Mines provide a reasonable basis for selecting a design more representative sample will be required during
Bond work index. METC took historical information on the mill subsequent plant studies. Given that the geology in
sizes with their energy consumption and plant throughput to the area is similar from one deposit to another,
back calculate the Bond work index of the ball mills to be historical information from the previous operations at
15.5kWh/t. This was used for the required energy Okiep Copper Mines provide a reasonable basis for
consumption for this study. In the next phases of project selecting a design Bond work index. METC took
additional test work will be carried out to confirm this historical information on the mill sizes with their energy
estimate. consumption and plant throughput to back calculate
the Bond work index of the ball mills to be 15.5kWh/t.
• Assumptions or allowances made for deleterious elements:
This was used for the required energy consumption for
The following table shows the assay results from concentrate
this study. In the next phases of project additional test
analysis carried out during the SAFTA PFS on FMN material,
work will be carried out to confirm this estimate.
the main elements being the Cu and Au (at 2.18 ppm or
g/t). Any deleterious elements are in low concentrations • Assumptions or allowances made for deleterious
and the concentrate is described as “very clean”. elements: The following table shows the assay results
from concentrate analysis carried out during the
Recovery Factors: Historical plant performance figures
SAFTA PFS on FMN material, the main elements being
indicated that 85 to 94% of the copper was recovered into a
the Cu and Au (at 2.18 ppm or g/t). Any deleterious
concentrate grading between 20 and 36% Cu, depending on
elements are in low concentrations and the
the copper head grade and mineral composition. For the
concentrate is described as “very clean”.
purpose of the Scoping Study an average plant recovery of
87.4% has been used.
The Cu NSR is based on: • Recovery Factors: Historical plant performance
figures indicated that 85 to 94% of the copper was
• a Cu payability of 96.0%
recovered into a concentrate grading between 20
• Cu TC/RCs of US$68.14 per tonne of concentrate and
and 36% Cu, depending on the copper head grade
US$0.68 per lb of Cu metal in the concentrate
and mineral composition. For the purpose of the
• A Ag payability of 91.8% and a Ag refining cost of US$1.88
Scoping Study an average plant recovery of 87.4%
per tonne of concentrate
has been used.
• A Au payability of 1.75 g/t of concentrate and a Au refining
costs of US$0.23/t of concentrate The Cu NSR is based on:
• A combined Cl and F penalty of US$0.75/t of concentrate.
• a Cu payability of 96.0%
• The above inputs result in an NSR of 96.9%
• Cu TC/RCs of US$68.14 per tonne of concentrate and
US$0.68 per lb of Cu metal in the concentrate
• A Ag payability of 91.8% and a Ag refining cost of
US$1.88 per tonne of concentrate
• A Au payability of 1.75 g/t of concentrate and a Au
refining costs of US$0.23/t of concentrate
• A combined Cl and F penalty of US$0.75/t of
concentrate.
The above inputs result in an NSR of 96.9%
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME Commentary – Open Pit: Flat Mine (Nababeep) and Jan Coetzee
• The status of studies of • The previous mine owner, O’Okiep Copper Mining • The previous mine owner, O’Okiep Copper Mining
potential environmental Company retained the environmental liabilities associated Company retained the environmental liabilities
impacts of the mining and with the old mining structures, waste and tailings dumps. associated with the old mining structures, waste and
processing operation. Details tailings dumps.
• The SAFTA Mining Right application was submitted on 4
of waste rock
October 2018 together with the Environmental Authorisation • The SAFTA Mining Right application was submitted on
characterisation and the
application (EAA) and Waste Management Licence (WML) 4 October 2018 together with the Environmental
consideration of potential
application, in terms of the NEMAct, 1998, and processing Authorisation application (EAA) and Waste
sites, status of design options
by the authorities runs concurrent to the Mining Right Management Licence (WML) application, in terms of
considered and, where
application. The Integrated Water Use License (IWUL) the NEMAct, 1998, and processing by the authorities
applicable, the status of
application process was recently reactivated. Specialist runs concurrent to the Mining Right application. The
approvals for process residue
studies to inform the Environmental Impact Report (EIR), Integrated Water Use License (IWUL) application
storage and waste dumps
Environmental Impact Assessment (EIA) and Environmental process was recently reactivated. Specialist studies to
should be reported.
Management Programme (EMPr), WML and WUL were part inform the Environmental Impact Report (EIR),
of the Environmental Authorisation (EA) application process Environmental Impact Assessment (EIA) and
Environmental
and are completed. The EA process also integrates the Environmental Management Programme (EMPr),
concerns raised during the Public Participation Process and WML and WUL were part of the Environmental
incorporates mitigation measures for issues raised by Authorisation (EA) application process and are
affected parties. completed. The EA process also integrates the
concerns raised during the Public Participation
• The SAFTA Prospecting Right application was submitted to
Process and incorporates mitigation measures for
the authorities on 9 October 2020 together with an EA
issues raised by affected parties.
application in terms of the NEMAct, 1998, which runs
concurrent to the Prospecting Right application. • The SAFTA Prospecting Right application was
submitted to the authorities on 9 October 2020
• The estimate agreed with the Department of Minerals and
together with an EA application in terms of the
Energy (DMRE) for the Financial Provision is currently ZAR1
NEMAct, 1998, which runs concurrent to the
million and this has been provided to the DMRE in the form
Prospecting Right application.
of a Centriq Financial Guarantee. Rehabilitation and
closure costs of the proposed mine are anticipated to be re- • The estimate agreed with the Department of Minerals
and Energy (DMRE) for the Financial Provision is
estimated by specialists in terms of the EIA in the next phase currently ZAR1 million and this has been provided to
of technical studies. the DMRE in the form of a Centriq Financial
Guarantee. Rehabilitation and closure costs of the
proposed mine are anticipated to be re-estimated by
specialists in terms of the EIA in the next phase of
technical studies
• Once granted, the current existing environmental
permissions, will require MPRDA Section 102
applications together with Environmental
Authorisation modifications to acquire formal
authorisations for the planned addition of open pit
mining.
Commentary – Open Pit: Flat Mine (Nababeep) and Jan
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
Coetzee
• The existence of appropriate • The combined area for the SAFTA mining right and • The infrastructure described in the central column will
infrastructure; availability of prospecting right applications upon which the mine and also serve the open-pit mines. In addition, the two
land for plant development, mine infrastructure is planned, is approximately 8,300 open-pit mines will have water storage dams installed
power, water, transportation hectares in extent. to handle any water required to be pumped from the
(particularly for bulk pits.
• Surface Rights: The area has a history of over 150 years
commodities), labour,
mining legacy and in many areas, mining predates surface
accommodation; or the ease
ownership. Current land surface and servitudes are held by
with which the infrastructure
private entities (which predominantly use the area for sheep
can be provided or
grazing) and an area was donated to the local
accessed.
Namaqualand Municipality by O’Okiep Copper Mines. A
few municipal ‘tenants’ reside in this area.
Infrastructure • According to SAFTA no written access agreements have
been concluded. Orion is investigating access agreements
as part of the due diligence process.
• In addition, once awarded, the holder of a prospecting and
mining right is entitled to carry out the relevant operations
for the winning of minerals in terms of Section 54 of the
MPRDAct, 2002. As part of the application process, Land
Claims are investigated and none were found however
Orion is conducting an independent investigation. The
Company has used reasonable endeavours to confirm that
land is therefore available for the building of new or use of
any existing infrastructure.
Commentary – Open Pit: Flat Mine (Nababeep) and Jan
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
Coetzee
• Zoning: Once the mining right is granted, the mining area
will be required to be rezoned in terms of the SPLUMA
Regulations.
Infrastructure Requirements:
• Power: Incoming power will be taken at 11 kV from the
nearest Eskom sub-station via a new 23 km line to an 11 kV
Main consumer sub-station with a 15 MVA transformer
located at FMN. From this point, power will be reticulated
throughout the OCC Complex as required with 11 kV
reticulation. Low voltage distribution, at 525V, would be
derived from distribution transformers at each of the mining,
plant and TSF locations.
• Water: The Nababeep North Mine Shaft has been identified
as a water source. Water abstraction tests undertaken for
the PFS by SRK Consulting at the NMS indicate that 1,363 m3
per day can be safely abstracted with no effect on the
water table. Under steady state conditions, the OCC Project
will require 1160 m3/day of water.
• Pumping: All underground mines will have new pumping
systems installed to handle mining water which will be
pumped to surface and stored in 6,000m3 storage dams.
• Roads and access: An access road is in use currently to FMN,
Flat Mine Open pit and Jan Coetzee open-pit. Where
required these roads will be upgraded. New access roads
will be required for FME and FMS. Costs have also been
allowed for security and access control at the relevant
points.
• Buildings: Existing mine buildings and stores will be used for
the planned OCC Project. A degree of upgrading and
modernising will be required. Power is already supplied to
these buildings through the Municipal supply.
Commentary – Open Pit: Flat Mine (Nababeep) and Jan
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
Coetzee
• The derivation of, or Capital Cost (Capex) Assumptions: Capital Cost (Capex) Assumptions:
assumptions made, regarding • Capex: The estimated capital budget has been prepared • Capex: The estimated capital budget has been
projected capital costs in the to an estimation accuracy of ±25% and according to work prepared to an estimation accuracy of ±25% and
study. packages reflecting how the Project construction is according to work packages reflecting how the
• The methodology used to intended to be controlled. Contingency has been Project construction is intended to be controlled.
estimate operating costs. estimated at 15% of the underlying Capex items. The total Contingency has been estimated at 15% of the
• Allowances made for the capital cost to construct the mine is estimated to be ZAR595 underlying Capex items. The total capital cost to
content of deleterious million (AUD54 million) construct the mine is estimated to be ZAR595 million
elements. The derivation of • Construction Schedule – Assuming that the remaining (AUD54 million)
assumptions made of metal regulatory permits are approved (14 months), the • Construction Schedule – Assuming that the remaining
or commodity price(s), for the Company’s internal approvals are completed (2 months) regulatory permits are approved (14 months), the
principal minerals and co- and funding is sourced following the completion of a Company’s internal approvals are completed (2
products. successful Bankable Feasibility Study and infill drilling months) and funding is sourced following the
• The source of exchange rates campaign (10 months), project implementation will completion of a successful Bankable Feasibility Study
used in the study. commence in month 13 with detailed engineering design. and infill drilling campaign (10 months), project
• Derivation of transport On-site activities are expected to commence 4 months later implementation will commence in month 13 with
charges. in month 17 (critical to which is the conclusion of the detailed engineering design. On-site activities are
Costs • The basis for forecasting or permitting processes) and will continue until month 28 when expected to commence 4 months later in month 17
source of treatment and the processing plant C4 commissioning starts by receiving (critical to which is the conclusion of the permitting
refining charges, penalties for ROM ore. Currently certain critical permitting processes, and processes) and will continue until month 28 when the
failure to meet specification, procurement streams necessary to allows the bankable processing plant C4 commissioning starts by receiving
etc. feasibility study to commence as planned are underway. ROM ore. Currently certain critical permitting
• The allowances made for • LoM - approximately 12 years when Inferred Mineral processes, and procurement streams necessary to
royalties payable, both Resources are incorporated. allows the bankable feasibility study to commence as
Government and private. • Target accuracy of ±25%. planned are underway.
• The base currency is the South African Rand (ZAR) and an • LoM - approximately 12 years when Inferred Mineral
exchange rate has been fixed at ZAR17.2 : USD1, ZAR11.1. Resources are incorporated.
Source of Capex estimated costs: • Target accuracy of ±25%.
• The estimate is base dated to April 2021. • The base currency is the South African Rand (ZAR)
• Process Plant: Second-hand equipment was priced for the and an exchange rate has been fixed at ZAR17.2 :
plant and factors were used to determine, earthworks, civils, USD1, ZAR11.1
Source of Capex estimated costs:
• The estimate is base dated to April 2021.
• Process Plant: Second-hand equipment was priced
for the plant and factors were used to determine,
earthworks, civils, electrical C&I, piping and steelwork.
electrical C&I, piping and steelwork. These factors are These factors are highlighted in the Scoping Study
highlighted in the Scoping Study report. report.
• Surface Infrastructure: Road access, security, water and • Surface Infrastructure: Road access, security, water
power reticulation were priced from the SAFTA PFS. and power reticulation were priced from the SAFTA
• Underground Mining: Surface ventilation fans and water PFS
and power reticulation were priced from the SAFTA PFS. • Underground Mining: Surface ventilation fans and
EPCM costs: These have been factored based on the water and power reticulation were priced from the
underlying capital costs for the plant and mining. SAFTA PFS
Opex Costs: A summary of the total estimated operating • EPCM costs: These have been factored based on the
cost for the underground and open pit mining is detailed in underlying capital costs for the plant and mining.
the body of the report. Opex Costs: A summary of the total estimated
operating cost for the underground and open pit
• The operating cost estimates were compiled from various
mining is detailed in the body of the report.
sources, including:
o The SAFTA PFS undertaken by Minxcon; • The operating cost estimates were compiled from
o contractor quotes; various sources, including:
o benchmark numbers supplied by study o The SAFTA PFS undertaken by Minxcon;
contributors; and o contractor quotes;
o labour and fuel costs are included within each o benchmark numbers supplied by study
discipline. contributors; and
o labour and fuel costs are included within
• Underground mining costs were estimated by A&B Global.
each discipline.
The costs were obtained from benchmarked numbers and
compared to contractor-supplied rates from the local area. • Open pit costs were based on written contractor
The average mining development rate was estimated at rates for drill & blast and load & haul, as of March
ZAR35,000/metre, assuming a contractor mining model, 2021. The services and utilities costs were estimated by
whereby the contractor will supply the mining fleet. The the mining team conducting the Scoping Study. The
stoping costs were estimated per mining method and drill and blast costs include a 5% allowance for pre-
applied to the respective tonnes per method from the split drilling. The load and haul costs are based on a
production schedule. The underground mining costs also rate of ZAR51.50/tonne at surface, with a depth
includes the grade control drilling program. Labour and fuel premium of 5% increase per 10 metre additional pit
costs were included. depth. Based on the average stripping ratio of the
• In addition to the direct mining costs, mobilisation and de- two open-pits of 5.7:1, the direct open-pit mining cost
mobilisation costs of ZAR1.9 million for the underground per tonne treated equates to ZAR486/tonne.
mining contractor and ZAR1.6 million for open pit contractor • In addition to the direct mining costs, mobilisation and
were assumed. de-mobilisation costs of ZAR1.9 million for the
• Processing plant working costs were compiled by METC from underground mining contractor and ZAR1.6 million for
first principles including labour, reagent prices based on open pit contractor were assumed.
estimated consumption rates per tonne treated and milling • Processing plant working costs were compiled by
and crushing consumables, based on planned wear rates METC from first principles including labour, reagent
based on the estimated ore hardness. The steady state unit prices based on estimated consumption rates per
cost has been estimated at ZAR228 per tonne treated. tonne treated and milling and crushing consumables,
• General and Admin: These costs were taken from the SAFTA based on planned wear rates based on the
PFS
Commentary – Open Pit: Flat Mine (Nababeep) and Jan
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
Coetzee
• Off-mine Costs: These costs were taken from the SAFTA PFS estimated ore hardness. The steady state unit cost has
• The base currency see ‘revenue’ below been estimated at ZAR228 per tonne treated.
• Commodity price assumptions and source: see ‘revenue’ • General and Admin: These costs were taken from the
below. SAFTA PFS
• Transport charges: Costs have been assumed at US$32.80 • Off-mine Costs: These costs were taken from the
and US$21.90 per tonne of concentrate for road and SAFTA PFS
shipping respectively • The base currency see ‘revenue’ below
• Penalties and allowances for deleterious elements: refer to • Commodity price assumptions and source: see
the NSR estimate detailed in this release. ‘revenue’ below.
• Government Royalties: the royalties were set at the formula • Transport charges: Costs have been assumed at
for “unrefined minerals”, in terms of the Royalties Act, 2010, US$32.80 and US$21.90 per tonne of concentrate for
linked to the MPRDA, 2002. Where Y = 0.5 + EBIT/(gross sales road and shipping respectively
of unrefined minerals) x 9] x 100 {maximum Y is 7.0%}. • Penalties and allowances for deleterious elements:
refer to the NSR estimate detailed in this release.
• Government Royalties: the royalties were set at the
formula for “unrefined minerals”, in terms of the
Royalties Act, 2010, linked to the MPRDA, 2002. Where
Y = 0.5 + [EBIT/(gross sales of unrefined minerals) x 9] x
100 {maximum Y is 7.0%}.
• The derivation of or • Mining modifying factors were applied to Mineral Resources • Mining modifying factors were applied to Mineral
assumptions made regarding grades as covered in the document. Resources grades as covered in the document.
revenue factors including
• Metal Price Assumptions: • Metal Price Assumptions:
head grade, metal or
commodity price(s), Metal Prices USD/tonne USD/lb Source Metal Prices USD/tonne USD/lb Source
exchange rates, Copper 7,593 2.03 S&P, March 2021 Copper 7,593 2.03 S&P, March 2021
transportation and treatment
Precious Metals USD/oz USD/lb Source Precious Metals USD/oz USD/lb Source
charges, penalties, net
Gold 1,889 n/a S&P, March 2021 Gold 1,889 n/a S&P, March 2021
smelter returns, etc.
Revenue factors • The derivation of assumptions Silver 24 n/a S&P, March 2021 Silver 24 n/a S&P, March 2021
made of metal or commodity • Metal Price assumptions were based on S&P Global • Metal Price assumptions were based on S&P Global
price(s), for the principal Consensus LT Forecast March 2021. Consensus LT Forecast March 2021.
metals, minerals and co-
products. • Contribution by the co-products of silver and gold were • Contribution by the co-products of silver and gold
included in the estimates for the Feasibility Study. were included in the estimates for the Feasibility
Study.
Commentary – Open Pit: Flat Mine (Nababeep) and Jan
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
Coetzee
• Foreign Currency Exchange Rate Assumptions: • Foreign Currency Exchange Rate Assumptions:
FX Rate USD AUD ZAR FX Rate USD AUD ZAR
USD 1.0 - 17.2 USD 1.0 - 17.2
AUD - 1.0 11.1 AUD - 1.0 11.1
• The rates of exchange used have been empirically The rates of exchange used have been empirically estimated
estimated and are based on exchange rates at the time of and are based on exchange rates at the time of this report.
this report.
• The demand, supply and • Copper contributes 93.7% of the net revenue (after allowing • Copper contributes 93.7% of the net revenue (after
stock situation for the for concentrate logistics, treatment costs and refining allowing for concentrate logistics, treatment costs
particular commodity, charges), followed by gold credits that contributes 4.9%. and refining charges), followed by gold credits that
consumption trends and contributes 4.9%.
factors likely to affect supply Demand, supply and stock situation for copper:
and demand into the future. Demand, supply and stock situation for copper:
• Historically the concentrates produced from the Okiep
• A customer and competitor
Copper Project were regarded as clean with few and low • Historically the concentrates produced from the
analysis along with the
levels of impurities. Current assay results have indicated that Okiep Copper Project were regarded as clean with
identification of likely market
this will be the case going forward. It can be concluded that few and low levels of impurities. Current assay results
windows for the product.
the low level of impurities in the concentrates will generate have indicated that this will be the case going
• Price and volume forecasts
strong demand as smelters require clean concentrates to forward. It can be concluded that the low level of
and the basis for these
blend down impurities with those of lower quality. Orion impurities in the concentrates will generate strong
forecasts.
therefore does not foresee any restrictions on where the demand as smelters require clean concentrates to
Market concentrates can be sold. blend down impurities with those of lower quality.
assessment Orion therefore does not foresee any restrictions on
Customer Analysis: where the concentrates can be sold.
• The only copper smelter in South Africa is at the Phalaborwa
Customer Analysis:
Mine in the northern-most province of South Africa, which is
owned by Phalaborwa Mining Company. This is 1,780 km • The only copper smelter in South Africa is at the
from the Project site. From recent discussions with Phalaborwa Mine in the northern-most province of
Phalaborwa, the smelter has spare capacity. This option will South Africa, which is owned by Phalaborwa Mining
be investigated further in the next round of studies. Company. This is 1,780 km from the Project site. From
recent discussions with Phalaborwa, the smelter has
• The Scoping Study caters for road transport and shipping to
spare capacity. This option will be investigated further
a smelter in China. A high-level competitor analysis is
in the next round of studies.
planned at the Feasibility Study stage.
• The Scoping Study caters for road transport and
shipping to a smelter in China. A high-level competitor
analysis is planned at the Feasibility Study stage.
Commentary – Open Pit: Flat Mine (Nababeep) and Jan Coetzee
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
• The inputs to the economic • The sensitivity analysis provides a range of outcomes for the • The sensitivity analysis provides a range of outcomes
analysis to produce the net Project when the key parameters are varied from their base- for the Project when the key parameters are varied
present value (NPV) in the case values. The sensitivity outcome is displayed in the figure from their base-case values. The sensitivity outcome is
study, the source and shown in the body of the announcement. The Proof of displayed in the figure shown in the body of the
confidence of these Concept Phase NPV estimate is most sensitive to the Copper announcement. The Proof of Concept Phase NPV
Economic economic inputs including estimate is most sensitive to the Copper grade,
grade, followed by the Copper price USD:ZAR exchange
estimated inflation, discount rate and Copper recovery. followed by the Copper price USD:ZAR exchange
rate, etc. rate and Copper recovery.
• NPV ranges and sensitivity to
variations in the significant
assumptions and inputs.
• The status of agreements with • Surface Use: Currently, in the due diligence phase, the • Surface Use: Currently, in the due diligence phase,
key stakeholders and matters Company currently has no written agreements with surface the Company currently has no written agreements
leading to social licence to users. with surface users.
operate.
• Social Responsibility: • Social Responsibility:
• This aspect is guided by the Mining Charter and regulated • This aspect is guided by the Mining Charter and
by the Social and Labour Plan (SLP) which was compiled regulated by the Social and Labour Plan (SLP) which
and submitted as part of the SAFTA Mining Right application. was compiled and submitted as part of the SAFTA
The SLP is currently being evaluated by the South African Mining Right application. The SLP is currently being
Social
regulatory authorities. evaluated by the South African regulatory authorities.
• As part of the due diligence process, the Company has • As part of the due diligence process, the Company
initiated a relationship with the Nama Khoi Local has initiated a relationship with the Nama Khoi Local
Municipality and Namaqualand District Municipality. Municipality and Namaqualand District Municipality.
• The Company views the SLP as being a dynamic document The Company views the SLP as being a dynamic document
that will continue to be revised as the Project develops and that will continue to be revised as the Project develops and the
the needs and understanding of the local community needs and understanding of the local community change.
change.
• To the extent relevant, the • No Ore Reserves are reported. • No Ore Reserves are reported.
impact of the following on the
project and/or on the • Identified material natural occurring risks: the Company is • Identified material natural occurring risks: the
estimation and classification of currently aware of none. A due diligence process is in Company is currently aware of none. A due diligence
the Ore Reserve; Any identified progress. process is in progress.
Other material naturally occurring
• Status of material legal agreements: all Company material • Status of material legal agreements: all Company
risks.; The status of material
agreements are current and active. material agreements are current and active.
legal agreements and
marketing agreements. The Option to acquire Okiep Project and Project-related data Option to acquire Okiep Project and Project-related
status of governmental data
agreements and approval
Commentary – Open Pit: Flat Mine (Nababeep) and Jan Coetzee
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
critical to the viability of the • On 2 February 2021, Orion announced9 that it had signed • On 2 February 2021, Orion announced10 that it had
project, such as mineral an exclusive option to undertake due diligence to acquire signed an exclusive option to undertake due
tenement status, and the following: diligence to acquire the following:
government and statutory
approvals. There must be o a 56.25% interest in SAFTA – alongside the o a 56.25% interest in SAFTA – alongside the
reasonable grounds to expect Industrial Development Corporation of South Industrial Development Corporation of
that all necessary Government Africa Limited (IDC) who hold 43.75%; South Africa Limited (IDC) who hold 43.75%;
approvals will be received o 100% of NCC; and o 100% of NCC; and
within the timeframes o 100% of BCC, o 100% of BCC,
anticipated in the pre-feasibility
or Feasibility study. Highlight (together herein being referred to as the ‘Okiep Copper (together herein being referred to as the ‘Okiep
and discuss the materiality of Project’ or ‘Okiep Project’). Copper Project’ or ‘Okiep Project’).
any unresolved matter that is
• Under the terms of the agreement, Orion was granted an • Under the terms of the agreement, Orion was granted
dependent on a third party on
exclusivity period extending to the 31st of July 2021, during an exclusivity period extending to the 31st of July
which extraction of the reserve
which time Orion could exercise an exclusive option to 2021, during which time Orion could exercise an
is contingent.
acquire the Okiep Project. exclusive option to acquire the Okiep Project.
• On 15 February 2021 Orion announced that it had also • On 15 February 2021 Orion announced that it had
secured an option to acquire the furnished head office and also secured an option to acquire the furnished head
database from the O’Okiep Copper Company Proprietary office and database from the O’Okiep Copper
Limited, O’Okiep Australia Pty Ltd and N7 Transport CC Company Proprietary Limited, O’Okiep Australia Pty
(together the ‘Data Vendors’). The database includes all Ltd and N7 Transport CC (together the ‘Data
historical mining and exploration records over much of the Vendors’). The database includes all historical mining
Okiep Project area. The database also includes Okiep and exploration records over much of the Okiep
exploration records and historical due diligence reviews Project area. The database also includes O’Okiep
undertaken by Newmont and Goldfields, over much of the exploration records and historical due diligence
Northern Cape Province, including Orion’s Prieska Copper- reviews undertaken by Newmont and Goldfields,
Zinc Mine and the Areachap Belt. This information would be over much of the Northern Cape Province, including
important to the exploration, mineral resources definition Orion’s Prieska Copper-Zinc Mine and the Areachap
and mine feasibility studies planned for the Project. Belt. This information would be important to the
exploration, mineral resources definition and mine
• Status of material marketing agreements: no signed
feasibility studies planned for the Project.
agreements are in place.
• Status of material marketing agreements: no signed
Government Agreements:
agreements are in place.
9
Refer ASX-JSE release 2 February 2021.
10
Refer ASX-JSE release 2 February 2021.
Commentary – Open Pit: Flat Mine (Nababeep) and Jan Coetzee
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
• Tenement Status: Mineral tenure in South Africa is regulated Government Agreements:
by the MPRDA, 2002, with the environmental aspects
• Tenement Status: Mineral tenure in South Africa is
regulated by NEMA, 1998, both managed under the
regulated by the MPRDA, 2002, with the
authority of the DMRE. The Project mineral tenure or
environmental aspects regulated by NEMA, 1998,
tenement holding comprises a set of contiguous mining and
both managed under the authority of the DMRE. The
prospecting right applications covering the Flat Mine
Project mineral tenure or tenement holding comprises
Project area: the SAFTA Mining Right application and the
a set of contiguous mining and prospecting right
SAFTA Prospecting Right application. The primary tenement
applications covering the Flat Mine Project area: the
licenses and applications are detailed below:
SAFTA Mining Right application and the SAFTA
• SAFTA Mining Right Application Prospecting Right application. The primary tenement
licenses and applications are detailed below:
Mining Right application: NC30/5/1/2/2/10150MR. The
SAFTA Mining Right application was submitted to the DMRE • SAFTA Mining Right Application
on 4 October 2018, in terms of Section 22 of the MPRDA,
Mining Right application: NC30/5/1/2/2/10150MR. The
2002, over part of the previous SAFTA prospecting right areas
SAFTA Mining Right application was submitted to the
for copper, and tungsten in respect of a portion of portion
DMRE on 4 October 2018, in terms of Section 22 of the
3, a portion of portion 13, a portion of portion 14 and a
MPRDA, 2002, over part of the previous SAFTA
portion of portion 21 of the farm Nababeep No. 134;
prospecting right areas for copper, and tungsten in
administrative District of Namaqualand, Northern Cape
respect of a portion of portion 3, a portion of portion
Province for requested initial period of 15 years which may
13, a portion of portion 14 and a portion of portion 21
be renewed for up to 30 years at a time. The mining right
of the farm Nababeep No. 134; administrative District
application was submitted together with the pre-requisite
of Namaqualand, Northern Cape Province for
EA and WML) and includes the proposed Mining Works
requested initial period of 15 years which may be
Program and SLP. The WUL application process has recently
renewed for up to 30 years at a time. The mining right
been reactivated.
application was submitted together with the pre-
• Orion is currently undertaking a due diligence on the
requisite EA and WML) and includes the proposed
proposed purchase of the SAFTA assets. SAFTA effectively
Mining Works Program and SLP. The WUL application
holds a 100% interest in the Right, with a 43% holding by the
process has recently been reactivated.
IDC. If the option to purchase is effected, it is proposed that
• Orion is currently undertaking a due diligence on the
Orion will effectively hold 70% of the granted mining right
proposed purchase of the SAFTA assets. SAFTA
and will require a 20% BEE ownership (IDC), 5% community
effectively holds a 100% interest in the Right, with a
trust and 5% employee trust in compliance with Mining
43% holding by the IDC. If the option to purchase is
Charter, 2018 guidelines and existing legislation. An
effected, it is proposed that Orion will effectively hold
organogram is shown in the body of the ASX/JSE release.
70% of the granted mining right and will require a 20%
BEE ownership (IDC), 5% community trust and 5%
• SAFTA Prospecting Right Application.
employee trust in compliance with Mining Charter,
Prospecting Right: NC30/5/1/1/2/12755PR. The SAFTA 2018 guidelines and existing legislation. An
Prospecting Right Application, in terms of Section 16 of the organogram is shown in the body of the ASX/JSE
MPRDA, 2002 was submitted to the DMRE, for the remaining release.
Commentary – Open Pit: Flat Mine (Nababeep) and Jan Coetzee
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
part of the previous prospecting right area for copper and
tungsten in respect of portion 10, a portion of portion 13, a • SAFTA Prospecting Right Application.
portion of portion 14 , portion 15, portion 16 and a portion of
Prospecting Right: NC30/5/1/1/2/12755PR. The SAFTA
portion 21 of the farm Nababeep No. 134 and plot 206 of
Prospecting Right Application, in terms of Section 16
Okiep Township; administrative District of Namaqualand,
of the MPRDA, 2002 was submitted to the DMRE, for
Northern Cape Province for requested initial period of 5
the remaining part of the previous prospecting right
years which may be renewed for up to 3 years. The
area for copper and tungsten in respect of portion 10,
application was submitted to the authorities, together with
a portion of portion 13, a portion of portion 14 , portion
the pre-requisite EA application, on 9 October 2020. The
15, portion 16 and a portion of portion 21 of the farm
application includes the proposed Prospecting Work
Nababeep No. 134 and plot 206 of Okiep Township;
Program. The application is in process at the DMRE.
administrative District of Namaqualand, Northern
• Orion is currently undertaking a due diligence on the Cape Province for requested initial period of 5 years
proposed purchase of the SAFTA assets. SAFTA effectively which may be renewed for up to 3 years. The
holds a 100% interest in the Right, with a 43% holding by the application was submitted to the authorities, together
IDC. If the option to purchase is effected, it is proposed that with the pre-requisite EA application, on 9 October
Orion could effectively hold 70-80% of the granted mining 2020. The application includes the proposed
right as the Mining Charter, 2018 does not require BEE at the Prospecting Work Program. The application is in
prospecting stage. An organogram is shown in the body of process at the DMRE.
the ASX/JSE release.
• Orion is currently undertaking a due diligence on the
• Tenure Compliance: Not applicable. proposed purchase of the SAFTA assets. SAFTA
effectively holds a 100% interest in the Right, with a
• According to the documentation for the mining right
43% holding by the IDC. If the option to purchase is
application from 2019, there are there are no land claims on
effected, it is proposed that Orion could effectively
any of the properties covered by the prospecting rights
hold 70-80% of the granted mining right as the Mining
however as part of the due diligence, Orion has
Charter, 2018 does not require BEE at the prospecting
independently approached the Department of Land
stage. An organogram is shown in the body of the
Restitution and Reform and is awaiting updated detailed
ASX/JSE release.
information. This affects the surface ownership and not the
tenement status. • Tenure Compliance: Not applicable.
• The application process for the Okiep Project land use • According to the documentation for the mining right
change from Unspecified Zone to Special Zone (Extractive application from 2019, there are there are no land
Industry) will be submitted once a mining right is granted, claims on any of the properties covered by the
with approval required from the Nama Khoi and prospecting rights however as part of the due
Namaqualand Municipalities. diligence, Orion has independently approached the
Department of Land Restitution and Reform and is
• Status of government and statutory approvals: Orion knows
awaiting updated detailed information. This affects
of no reason why all necessary government approvals
the surface ownership and not the tenement status.
Commentary – Open Pit: Flat Mine (Nababeep) and Jan Coetzee
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
shouldn’t be received within the timeframes anticipated in • The application process for the Okiep Project land use
the Scoping Study. change from Unspecified Zone to Special Zone
(Extractive Industry) will be submitted once a mining
• At this Scoping Study stage, MOU’s and material
right is granted, with approval required from the
agreements with service providers such as ESKOM and the
Nama Khoi and Namaqualand Municipalities.
municipalities for water and electricity are still in process of
negotiation and are all pending the results of the Orion • Status of government and statutory approvals: Orion
options to purchase the Okiep Project. knows of no reason why all necessary government
approvals shouldn’t be received within the
• Unresolved matters with 3rd parties which would materially
timeframes anticipated in the Scoping Study.
affect the results of the Feasibility stage – the project is still at
the Scoping Study stage. • At this Scoping Study stage, MOU’s and material
agreements with service providers such as ESKOM
and the municipalities for water and electricity are still
in process of negotiation and are all pending the
results of the Orion options to purchase the Okiep
Project.
• Unresolved matters with 3rd parties which would
materially affect the results of the Feasibility stage –
the project is still at the Scoping Study stage.
• The basis for the classification • No Ore Reserves are reported. • No Ore Reserves are reported.
of the Ore Reserves into
• Section 4 of JORC Table 1 is being completed as part of the • Section 4 of JORC Table 1 is being completed as part
varying confidence
Scoping Study requirement to disclose a conceptual of the Scoping Study requirement to disclose a
categories.
Production Target estimate linked to forecast financial conceptual Production Target estimate linked to
• Whether the result
information. forecast financial information.
appropriately reflects the
competent Person’s view of
the deposit.
Classification • The proportion of Probable
Ore Reserves that have been
derived from Measured
Mineral Resources (if any).
Commentary – Open Pit: Flat Mine (Nababeep) and Jan Coetzee
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
• The results of any audits or • No audits or reviews of the Scoping Study have been No audits or reviews of the Scoping Study have been
reviews of the Ore Reserve undertaken. undertaken.
estimates.
Audits or reviews
• Where appropriate a • No Ore Reserves are reported. • No Ore Reserves are reported.
statement of the relative
accuracy and confidence • The level of accuracy for the Scoping Study Technical • The level of accuracy for the Scoping Study Technical
level in the Ore Reserve Report is ± 25%. Report is ± 25%.
estimate using an approach or
• The level of confidence for the preliminary estimates used in • The level of confidence for the preliminary estimates
procedure deemed
the conceptual production schedule is too low to classify used in the conceptual production schedule is too
appropriate by the Competent
and report Ore Reserves. low to classify and report Ore Reserves.
Person. For example, the
application of statistical or • For the combined underground and open pit operations, a • For the combined underground and open pit
geostatistical procedures to 33% Measured, 46% Indicated and 21% Inferred Mineral operations, a 33% Measured, 46% Indicated and 21%
quantify the relative accuracy Resource estimate was used for the purposes of the Scoping Inferred Mineral Resource estimate was used for the
of the reserve within stated Study. The Company is confident in using the Inferred purposes of the Scoping Study. The Company is
confidence limits, or, if such an
Mineral Resource to guide the Scoping Study process as it confident in using the Inferred Mineral Resource to
approach is not deemed
has considered that this Mineral Resource is a continuation guide the Scoping Study process as it has considered
appropriate, a qualitative
Discussion of of a historically-mined deposit and a large amount of that this Mineral Resource is a continuation of a
discussion of the factors which
relative historical operational data remains on site - which lends historically-mined deposit and a large amount of
would affect the relative
accuracy/confide accuracy and confidence of confidence to the assumption made that the Mineral historical operational data remains on site - which
nce the estimate. The statement Resource has the potential to be economically mined. lends confidence to the assumption made that the
should specify whether it Mineral Resource has the potential to be
• Mining studies in preparation for a Pre-feasibility Study
relates to global or local economically mined.
and/or Feasibility Study are planned, depending on the
estimates, and, if local, state
results of the Option to Purchase Agreement for the Okiep • Mining studies in preparation for a Pre-feasibility Study
the relevant tonnages, which
Project. and/or Feasibility Study are planned depending on
should be relevant to technical
and economic evaluation. the results of the Option to Purchase Agreement for
• A sensitivity analysis has been included in the Scoping Study
Documentation should include the Okiep Project.
and is included in the “economic” section above.
assumptions made and • A sensitivity analysis has been included in the Scoping
procedures used. Accuracy • The data compares very favourably with historical
Study and is included in the “economic” section
and confidence discussions production records for the O’Okiep Copper Company
above.
should extend to specific which operated between circa 1940 and 2003 on the Okiep
discussions of any applied Project. • The data compares very favourably with historical
Modifying Factors that may production records for the O’Okiep Copper
have material impact on Ore
Reserve viability. It is recognised
Commentary – Open Pit: Flat Mine (Nababeep) and Jan Coetzee
Criteria JORC Code explanation Commentary – Underground: FMN, FMS and FME
that this may not be possible or Company which operated between circa 1940 and
appropriate in all 2003 on the Okiep Project.
circumstances. These
statements of relative
accuracy and confidence of
the estimate should be
compared with production
data, where available.
Date: 03-05-2021 08:55:00
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