Wrap Text
Positive Progress Achieved from Optimisation Work on Prieska Copper-Zinc Project Bankable Feasibility Study
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
(“Orion” or “the Company”)
Positive progress achieved from optimisation work on Prieska Copper-Zinc Project Bankable Feasibility Study
- Positive results from water treatment trials for the shaft water to be purified for off-site discharge, thereby
allowing increased pumping rates which will accelerate planned project development timelines.
- Semi-autogenous milling test work indicates reduced processing plant capital and operating costs.
- Mine-to-market optimisation studies on track to deliver results by year-end.
Orion’s Managing Director and CEO Errol Smart, commented:
“We continue to progress a number of significant optimisation opportunities identified during the preparation of
the Foundation Phase Bankable Feasibility Study for the Prieska Project. Our aim is to complete these studies
before the end of the year and have an improved and simple-to-execute project plan with both CAPEX and
OPEX benefits ready for execution next year.
Dewatering the mine is a significant workstream and is the critical path activity where the greatest impact may
be achieved on development timelines and capital costs. Positive results from water treatment trials mean that
we now have more options for dewatering and can improve on what we see as an already very robust plan.
In addition, having SAG milling as a real alternative to ball milling, is yet another opportunity to make material
improvements on capital and operating costs.”
Orion Minerals Limited (ASX/JSE: ORN) (Orion or the Company) is pleased to provide a progress update on the
encouraging results emerging from the ongoing value engineering and optimisation work that has been under
way since the Bankable Feasibility Study (BFS) for the development of the Prieska Copper-Zinc Project (Prieska
Project) was completed in June 2019 (refer ASX release 26 June 2019).
Key studies currently in progress include:
- Water treatment trials investigating supplementary means of dealing with the water to be pumped out
from the underground workings so that the dewatering timeline and costs can be reduced;
- Value engineering of the ore processing plant designs and layouts to improve operational factors and
reduce both capital and operating costs; and
- Mine-to-market enterprise optimisation of the Foundation Phase mining plan, in order to holistically assess
the key value drivers of the project and ensure that the best business scenario is selected for project
execution.
Pilot-Scale Dewatering Field Trials
The historic Prieska mine is currently flooded to within 320m of the surface (Figure 1). The BFS plan assumed the
dewatering of approximately 8.7 million m3 of accumulated mine water, into a lined surface dam, before any
mining can take place.
The current BFS plan assumes an 18-month timeline to set up and empty the mine of the accumulated water,
which would be pumped into a surface dam with a designed maximum capacity of 1 million m3 (Figure 2). A
bank of evaporators will supplement natural evaporation to ensure that evaporation matches the 1,200m3 per
hour average dewatering rate that is planned. Due to the high capital costs for a lined dam, the rate at which
the stored water can be evaporated is the limiting factor as to how quickly mine dewatering can take place.
If current water treatment trials confirm that water can be discharged offsite after treatment, the Prieska Project
economics could significantly improve by increasing the pumping rates to dewater the mine, thereby reducing
the project development timelines and costs.
Although the mine water has been shown to have a neutral pH and low levels of chemical contaminants,
including no micro-biological contaminants at all, laboratory analyses indicate that some metal concentrations
are above the South African National Standards (SANS) Operational Limits for potable water (SANS 241:2015)
(SANS Drinking Water Standards) and will therefore require the water to be treated to achieve chemical
concentrations prescribed by environmental regulations, before off-site discharge options are permitted.
Pilot-scale water treatment trials commenced in July 2019 and were designed to provide the engineering data
required to allow detailed design and costings of water treatment and discharge options (refer ASX release 30
July 2019). The trials are being undertaken at a feed rate of 5m3 per hour, compared with the full-scale operating
throughput which will average >1,200m3 per hour.
The pilot tests are being undertaken in three phases and are due for completion before year-end. A water
treatment plant, designed specifically for the intended water treatment trials, has been constructed and
established on-site (Figure 3). The three phases are outlined below.
- Phase 1 aims to confirm the technical feasibility of treating the shaft water through a combination of
chemical treatment, precipitation, filtration and reverse osmosis to generate water permitted for
agricultural use;
- Phase 2 aims to determine the range of water qualities that can viably be produced; and
- Phase 3 involves completing the trade-off studies on the various available options, taking into account
comparative project economics, environmental impact and regulations (Figure 4).
Phase 1 preliminary results. The design intent of Phase 1 was to treat Prieska Project shaft water to a purity
meeting SANS Drinking Water Standards without being blended with any other water, using the combination of
selected treatment processes (Figure 5).
Water samples used for the testing to date have been obtained by continuous pumping from the main shaft at
depths of 380m and 680m below surface with future tests planned for pumping from 780m and 880m, in order to
assess the operation of the plant for different pumping depth profiles. The performance of each pilot scale
process was monitored to assess effectiveness, reagent consumption rates and scalability.
Preliminary results indicate that water treatment to SANS Drinking Water Standards can be effectively achieved
using the designed water treatment flowsheet. All process stages achieved their design intent, with purified
water recoveries of up to 78%. Reagent and power consumption rates were also determined as tabled below
(Table 1).
The test work procedure, implementation and results, have been independently peer reviewed by Nexus Vitae,
South African engineering specialists in water treatment plant designs and operation.
Parameter Reagent consumption
Lime 600.0 g/m3
Caustic 57.9 g/m3
Hydrochloric acid 103.7 g/m3
Power 4.5 kW/m3
Table 1: Reagent and power consumption measured for the water treatment as a unit of feed water throughput over the two-week preliminary
trial period.
Preliminary Cost Comparison – Based on the work undertaken to date, a preliminary cost comparison of a
technically realistic water treatment scenario to the BFS evaporation plan, indicates that water treatment has
potential merit, given that there is scope to increase the rate of pumping with an offsite discharge option and so
reduce the time to dewater the mine, as well as reduce the size of surface water storage dams. To undertake
the comparison, it was assumed that Prieska shaft water would be treated to agricultural standards such that the
water could be used for irrigation at a location near the project site.
This scenario assumes that 75% of the underground water would be treated to produce a clean permeate
(purified water) at SANS Drinking Water Standards. The balance of the water would be rejected as a brine to be
stored in a brine dam until evaporated. The purified water would then be blended with some shaft water,
partially treated (clarified) to reduce metal concentration, so that the diluted product would be suitable for
irrigation purposes.
Water from the bottom of the mine (12.5% of the water) was assumed to be unsuitable for cost-effective
treatment, and so would be pumped to settle in the tailings storage facility (TSF). This flowsheet would result in
68.5% of the shaft water being made suitable for irrigation, 19% to be concentrated to a brine for evaporation
and 12.5% as water unsuitable for efficient treatment for placement into the TSF.
Using this scenario, total unit costs for water treatment and discharge are estimated (currently +-35% accuracy)
to amount to AUD2.74 per m3 of water treated compared to AUD2.84 per m3 in the BFS case which assumes
using mechanical evaporation, as shown in Table 2.
Parameter Units Water Treatment Evaporation
Total Cost AUDM 23.83 24.14
Capex AUDM 15.00 21.45
Opex AUDM 8.83 2.69
Unit Cost AUD/m3 2.74 2.84
Table 2: Comparative costs for water treatment of the Prieska Shaft water to SANS Drinking Water Standards compared to evaporation.
The results indicate that the costs for the two water handling options are of similar orders of magnitude, before
taking into consideration the other potential benefits of water treatment over evaporation, such as the option
for offsite discharge, reduced storage dam footprint and faster pumping rates which would improve the project
development timelines.
These considerations will be assessed as part of the ongoing phases of the treatment trials and trade-off studies.
Ore Processing Value Engineering
SAG milling potential benefits
Since the completion of the BFS in June 2019, value engineering of the ore processing design has been in
progress, (refer ASX release 30 July 2019). The value engineering exercise is:
- Assessing semi-autogenous grinding (SAG) in the milling section as an alternative to ball milling;
- Investigating improved plant layouts;
- Rationalising the sizes, placement and uses of various plant buildings; and
- Re-estimating efficient surge capacity allowances in line with the proposed refinements.
The use of SAG milling, rather than conventional ball milling as presently incorporated into the BFS, could simplify
plant operability and significantly reduce upfront capital expenditure. The use of SAG milling removes the need
for multi-stage crushing and screening of the rock ahead of milling (refer Figure 6).
The plant and equipment comprising the current multi-stage crushing section of the plant contributes
approximately AUD11 million to the total plant capital cost of AUD109 million (refer ASX release 26 June 2019).
This represents a significant target for reducing capital expenditure without compromising overall plant recovery
performance, while the streamlined layout increases the plant’s mechanical availability and reduces
maintenance effort.
The conventional two-stage ball milling setup was selected as a conservative design option in the BFS on the
grounds that insufficient SAG milling-specific test work had been completed to conclusively assess the viability
and comparative benefits of SAG milling. A preliminary value engineering assessment using the BFS test work
results indicated that a SAG milling circuit, with a pebble crusher, no screening and a reduced length conveyor
layout could be viable. This motivated further SAG milling test work and analyses to confirm amenability of the
ore to SAG milling.
Sample collection
Samples for the SAG milling test work were collected from underground stockpiles on the 178m and 259m Levels.
The samples were selected being mindful that, for SAG milling test work, it is essential to have competent test
samples that have particle sizes greater than 75 mm. The samples were collected to also ensure that they were
representative of the massive and disseminated fresh sulphide mineralisation targeted for mining for the duration
of the Foundation Phase.
For both the massive sulphide and disseminated types of mineralisation, two samples were collected from two
different locations, each sample group weighing in excess of 100kg, for a total of 400kg of samples (Table 3).
Description Ore type Quantity Source
Sample 1A Massive 100 kg 178m and 259m Levels
Sample 1B Massive 100 kg 178m and 259m Levels
Sample 2A Disseminated 100 kg 178m and 259m Levels
Sample 2B Disseminated 100 kg 178m and 259m Levels
Table 3: Summary of samples collected.
Evaluation of results
The JKTech analysis indicated that the Prieska Project ore can be classified as soft and is amenable to milling via
SAG milling. Due to the soft nature of the ore, high steel charge SAG milling will likely be the optimal design to
ensure efficient and reliable operation.
Detailed design, costing and trade-off
A SAG milling layout is being refined and advanced to final design with the development of associated capital
and operating costs. This information will allow a comprehensive comparison to be made between SAG milling
and the conventional ball milling option that is currently the basis of the BFS. This workstream is expected to be
completed during Q4 2019.
Whittle Enterprise Optimisation
Whittle Consulting (Pty) Limited (Whittle) was engaged to undertake mine-to-market optimisation of the business
plan that was formulated as part of the BFS, (refer ASX release 30 July 2019). Whittle use their proprietary
enterprise optimisation process (WEO) which involves the detailed and accurate mapping and linking of the
whole value chain, from the Mineral Resource inventory to the marketed product. Thereafter, critical value
drivers along the value chain are simultaneously varied, using specialised computer algorithms, until optimal
permutations are identified.
Fundamental parameters such as cut-off grades, mining sequence, mining rates, targeted metal recoveries, mill
throughput rates, targeted grind sizes, feed blends, product specifications, product logistics routes and
variances in metal prices are all considered as one integrated system to derive a series of optimal business
scenarios.
Whittle has a demonstrated track record of having dramatically improved base case plans, with previous
projects having achieved in the order of 10% - 30% improvement in Net Present Value (NPV) from their base
cases.
Work is in progress and on track to prepare the base evaluation model that links the key value drivers and
establishes a baseline scenario using the current BFS assumptions. Thereafter, numerous permutations will be run
and the practicality of implementing recommended changes concurrently assessed. This process of assessing
WEO business scenarios is expected to be completed by end of November 2019, culminating in the selection of
optimisations to be incorporated into an updated operating plan.
Errol Smart
Managing Director and CEO
31 October 2019
ENQUIRIES
Investors Media JSE Sponsor
Errol Smart – Managing Nicholas Read Barnaby Hayward Rick Irving
Director & CEO
Denis Waddell – Chairman Read Corporate, Australia Tavistock, UK Merchantec Capital
T: +61 (0) 3 8080 7170 T: +61 (0) 419 929 046 T: +44 (0) 787 955 1355 T: +27 (0) 11 325 6363
E: info@orionminerals.com.au E: nicholas@readcorporate.com.au E: orion@tavistock.co.uk E: rick@merchantec.co.za
Suite 617, 530 Little Collins Street
Melbourne, VIC, 3000
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).
Date: 31/10/2019 08:56:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
