Orion Minerals Brochure i51 Spring 23

EXECUTIVE INSIGHT

Progress Rock-Solid

Orion Minerals, a globally diversified metals explorer and developer, is on track to become a new-generation base metals producer through the development of its projects in South Africa’s Northern Cape.

Progress Rock-Solid

Orion Minerals, a globally diversified metals explorer and developer, is on track to become a new-generation base metals producer through the development of its projects in South Africa’s Northern Cape.

Orion Minerals has achieved incredible progress since it came to South Africa in 2015. Today, with three projects under its belt and a major funding package in place, the company is well positioned to deliver critical metals for the global energy transformation.

“The Northern Cape province of South Africa is extraordinary – it is a traditional base metals mining district, with large-scale mines for a variety of metals including iron ore, manganese, copper, zinc and others. However, since the 1990s, the area had been neglected with virtually no exploration undertaken,” said Orion’s Managing Director and CEO Errol Smart.

A geologist by profession with an impressive 30-yearplus career spanning junior and mid-tier mining and exploration projects around the globe, Mr Smart saw a clear opportunity in the Northern Cape as a very attractive exploration and mining investment destination – offering incredible geological terrain, fantastic, well-developed infrastructure and properties available for acquisition and consolidation. Under his leadership, Orion Minerals has grasped this opportunity, putting together one of the best portfolios of prospecting and mining rights for base metals in the world.

Three pillars

Orion currently has three major properties, with the Prieska copper-zinc project being the centrepiece of its South African asset portfolio. Historically mined between

the 1970s and 1990s, Prieska is one of the world’s top-30 volcanogenic massive sulphide base metal deposits, with major potential.

“We have already proved that the ore body remains open in every dimension, which means that Prieska can become an even more significant long-life copper-zinc producer under our ownership than it was previously,” says Errol Smart.

The second asset is the Okiep copper project, located 450km west of Prieska, in a premier historical copper district where ore was mined as long ago as the 17th century. Orion saw a fantastic opportunity in this area that, yet again, had been neglected since the 1990s, and consolidated six different groups of properties in that region.

“In Okiep, we tested some new exploration technology using airborne electromagnetic surveying, and very quickly made a new nickel-copper discovery. There’s enormous exploration potential that has not been tapped using modern exploration methods.”

And last but not least, within the Areachap Belt, Orion holds yet another property that hosts the Jacomynspan deposit containing copper, zinc and nickel sulphide mineralisation, waiting

to be exploited using the latest processing technology. The application of this technology represents a potential game-changer, says Mr Smart, as it is delivers greatly improved recoveries and economics.

Responsible mining

He points out that widespread adoption of the latest technologies is making the mining industry more environmentally and socially friendly. “We came to South Africa with a very strong ESG culture and mindset, long before ESG was so widely embraced by the mining industry. We set out to operate in an environmentally

and socially responsible manner. We have achieved very strong stakeholder engagement, working with our local communities, developing local supply chains and redeveloping our mining world.”

“The aim has always been to get sustainable livelihoods built around our mining operations so that, when the mine eventually closes, as it will, the surrounding economy will sustain – it may be an agricultural economy, or it could be a manufacturing economy. That has always been very important to us.”

He explained that Prieska will use renewable energy, with 175 MW of operating solar

power and 250 MW of wind power at its disposal. In addition, on the project boundary, one of South Africa’s largest green hydrogen projects is currently being built. “On a 24-hour cycle, we’ve got 16 to 20 hours of effective renewable energy generation. That opens the doors for a whole lot of opportunity in the modern world of critical metals, and ESG.”

Orion is also striving to localise its contractors and suppliers as much as possible – both at the South African level but also at the local towns and Northern Cape level. The company has been well supported by local

suppliers as well as engineering and study groups, without the need to import experts from abroad. “We’ve got a top skill set right here, in South Africa,” affirms Mr Smart.

Funded to progress

With the company now transitioning to a mine development and construction phase, Orion has been assembling the key elements of an overarching strategic funding package that will allow it to accelerate the development of its two most advanced base metal assets, Prieska and Okiep, towards production.

In December 2022, Orion Minerals signed

definitive agreements with certain subsidiaries of Triple Flag Precious Metals for a US $87 million funding package. In February 2023, the company signed off on ZAR250 million (over US $13,5 million) worth of funding facilities secured from South Africa’s Industrial Development Corporation (IDC).

And on 15 March 2023, the company unveiled a strategic funding package comprising an AU $13 million (US $8,7 million) placement underpinned by highly regarded private South African mining group Clover Alloys (SA) together with an attaching options package that provides a clear pathway to secure additional equity funding of up to AU $60 million (US $40 million).

The placement is also supported by existing long-term Orion shareholders Delphi Group and, subject to shareholder approval, Tembo Capital.

Clover Alloys, led by prominent mining executives Adam Fleming as Chairman and Philip Kotze as CEO, has a strong track record in developing and operating chrome operations with specialist expertise in the rapid, highly capital efficient development of modular processing plants.

Mr Smart pointed out that the overarching funding package being provided by Triple Flag

together with the IDC and the recently unveiled AU $73 million (US $48 million) strategic funding package with Clover Alloys, was pivotal for Orion’s transition from being an exploration company to a mine developer.

“Securing the involvement of Clover Alloys as part of a broad strategic funding package represents a game-changer for Orion that puts us in an outstanding position to realise our growth vision as a major new South African base metals producer,” he said.

“Clover Alloys’ expertise will be invaluable to Orion as we complete the feasibility studies at Prieska and Okiep and execute our rapid development plan. This investment brings huge momentum to our company and, together with the support of our other cornerstone shareholders, puts us in an outstanding position to become a near-term producer.”

The funds secured will allow Orion to carry out demonstration trial mining and allow de-watering to commence from underground mine workings. “Both of these work streams are critical to our early works Bankable Feasibility Study (BFS), which we expect to complete by mid-2023 and mark the official start of development at the Prieska copper-zinc mine,” Mr Smart says.

A senior project developer representing IDC added: “The Prieska copper-zinc mine represents

an important, long-life base metals asset that promises to deliver high socio-economic returns in the Northern Cape. We are delighted to be on board as a development funding partner, therefore assisting to unlock what we feel is a high-impact project.”

Changing the rules of the game

Mr Smart reflected that, looking back, overall progress has been astonishing. “It has been exactly six years since Orion exercised its option to acquire the Prieska copper-zinc project. This is a relatively short time to take a base metals project of this scale from closure over thirty years ago, to a fully permitted project with a long mine life.”

He further noted that a lot has changed in South Africa’s mining industry over that space of time, a process in which he himself took an active part as the Chairman of the Minerals Council South Africa Junior and Emerging Miners’ Forum. The forum has been pivotal in facilitating change, particularly in regards to key regulations and legislation governing mineral rights in South Africa.

“South Africa is a traditional mining region.

To bring a junior mining company into this environment, with a mining culture, great mining skills and established mining supply chains, is a fantastic opportunity,” he concluded. An opportunity Orion Minerals is set to maximise.