Orion Minerals can begin building the Prieska Copper Zinc Mine in the Northern Cape after the first US$40 million of its Glencore funding package became unconditional, the ASX- and JSE-listed company said on Monday, 19 October.
The Tranche A money became available once Orion's subsidiary, Prieska Copper Zinc Mine (Pty) Ltd, signed the final concentrate offtake and intercreditor agreements and met all conditions precedent. Orion said it expects the first drawdown by the end of October, with first copper and zinc production from the shallow Uppers section targeted by the end of 2027.
The numbers
"We are delighted to have concluded the financing and offtake agreements with Glencore." Tony Lennox, managing director and CEO, Orion Minerals
The Tranche A facility is part of a US$250 million prepayment arrangement with Glencore first announced in February. The remaining US$210 million, Tranche B, is meant for the larger Deeps section and remains conditional: the Deeps must be fully funded and Glencore must line up third-party money for its prepayments. Orion said up to US$50 million of Tranche B could be drawn early for Deeps works, subject to conditions, and that it is still talking to existing and new funding partners.
In return, Glencore takes all of the Uppers bulk concentrate for five years and all Deeps copper and zinc concentrates for at least 10 years. Orion said the facility ranks equally with that of Triple Flag Precious Metals and can be repaid early without penalty.
Contractors on site
Torque Africa has been appointed to drill for geotechnical work and final mine design, and Enprotec will build and operate the 20,000 tonne-a-month Uppers concentrator under a build-own-operate-transfer arrangement. An accommodation village is also planned.
"We are delighted to have concluded the financing and offtake agreements with Glencore," Orion managing director and CEO Tony Lennox said, adding that finalising them had been a lengthy and detailed process. Glencore's Toby Spittle said the trader was pleased to help Orion "bring Prieska back to life".
The orebody
Prieska, near Copperton and about 270 km south-west of Kimberley, produced 430,000 tonnes of copper and about a million tonnes of zinc between 1971 and 1991, as reported by Mining Weekly. Orion's 2025 feasibility study puts the resource at 31 Mt grading 1.2% copper and 3.6% zinc, with nameplate output of 22,000 tonnes of copper and 65,000 tonnes of zinc a year over a combined 13.2-year mine life. The Industrial Development Corporation is an equity partner in the project holding company.
Why it matters
Prieska would bring a mine that closed in 1991 back into production, adding copper and zinc supply, construction jobs and contractor work in the Northern Cape at a time when investment in the country's junior mining sector has been scarce, as Miningmx noted in its report.