During the reporting period for the year ended 30 June 2020, Orion Minerals completed an updated Bankable Feasibility Study (BFS) for the development of the Prieska Project, located in the Northern Cape region of South Africa, confirming the Project’s potential to underpin a significant near-term, low-cost, copper and zinc development, with exceptional opportunities for future growth.
The updated BFS was completed to the highest possible level of detail and quality, and the end result reflects substantial improvements over the June 2019 BFS. These improvements include increased free cash-flow, net present value, mine life and total metal production.
This is an exceptional achievement and attained while adhering to the highest standards of health, safety, environmental preservation and corporate governance and while successfully managing the effects that the COVID-19 pandemic has had on the Company’s business.
With the updated BFS now complete, Orion has commenced discussions with potential Project development partners and financiers, received the remaining regulatory approvals required and the Project is now ‘shovel-ready’.
Orion is targeting a final investment decision for the Project as soon as these financing negotiations have been concluded. Orion intends to fund the Prieska Project development through a combination of debt and equity and is progressing discussions with both potential debt and equity providers. The Company has appointed Macquarie Capital to assist in evaluating equity funding alternatives.
While these negotiations are underway, the Orion team is continuing to progress project execution planning, contracting activities and working towards building an owner’s team for the construction phase.
The near mine and regional exploration strategy and programs for the Areachap belt were updated to ensure the project development pipeline was in line and complementary to the anticipated Prieska Project development milestones.
Orion’s main activity is exploration, evaluation and development of base metals, gold and PGE projects in South Africa and Australia and as such it does not have a source of income, rather it is currently reliant on equity raisings and/or debt to fund its activities.
During the financial year, the Company raised AUD12.8 million before costs to fund exploration and development of its projects, primarily in South Africa. Net cash used in operating activities and investing activities totalled AUD13.83 million (2019: AUD18.78 million) and included payments for exploration and evaluation of AUD9.81million (2019: AUD15.06 million) principally related to the development of the Prieska Project and exploration within Orion’s Areachap Projects, South Africa.