Prieska project to start production by 2020

JOHANNESBURG (miningweekly.com) – Dual-listed base metals miner Orion Minerals’ Prieska zinc/copper project could start production by 2020, says Orion MD and CEO Errol Smart.

Addressing a media roundtable on Tuesday, he commented that the current project timeline envisages the completion of a Joint Ore Reserves Committee-compliant resource estimate by the first quarter of 2018, the lodging of a mining right application in the second quarter, feasibility study results by the fourth quarter and the start of construction of the plant in mid-2019.

Smart said the massive sulphide zinc/copper exploration project will likely be split into an openpit and underground operation, with the openpit mine to produce ore while the underground operations are dewatered and re-established.

He said that the underground operation would likely start production by 2022.

“The baseline project that Orion is evaluating envisages the mine producing about 100 000 t/m,” said Smart, adding that this rate of production would translate to about 12 000 t/y to 15 000 t/y of copper concentrate and 20 000 t/y to 25 000 t/y of zinc concentrate – consistent with the mine’s historic throughput. 

Further, he noted that the previous operation had recoveries of 86% copper and about 88% zinc, producing a minimum of 28% copper concentrate and a minimum of 51% to 53% zinc concentrate. 

He expects the new operation will produce better recoveries given that technologies, reagents and methodologies have improved since the former mine’s closure in 1991.

Smart stressed that Orion was not reopening a mine, but “building a new mine in the shadow of the old one.”

Nonetheless, the new project will benefit from existing infrastructure, such as the municipal pipeline and power lines, the tarred access road, rail infrastructure linked to the country’s ports, as well as existing shafts.    

Smart pointed out that Orion was able to fast-track the feasibility study because it knew Prieska’s metallurgical history was “exceptional”, as it had produced premium-quality concentrate for 20 years. “We just had to drill our own intersections to validate the previous data.”

In the past, Prieska produced 47-million tonnes of sulphide and, according to previous mine plans, there are at least another 23-million tonnes of potential ore remaining. Orion currently has prospecting rights over the main mine tenement, with several additional prospecting rights pending.

Smart added that the timing of the project has been ideal, as zinc and copper supplies are depleting, with prices expected to remain stable before improving on the back of increased demand.

“Zinc is in an exceptionally good space. It is very much on a supply-side constraint because big mining operations have shut down around the world. The replacement production from large mines are either in more challenging environments, or in similar environments to our own.”

Further, he noted that China had gone through a mass consumption era of “low-quality galvanised steel”, which was ending

Smart stated that even though general construction in China was not growing as fast as in previous years, the quality of the steel work has changed fundamentally, as China has increased the percentage of zinc content in galvanised steel from 5% to 20%.

“Galvanised steel overall might be growing slowly, but the use of zinc in galvanised steel is growing dramatically and there is a supply-side constraint.”

He concluded that, by February, the company will have identified additional targets for exploration, based on historic data, as well as data obtained from the ongoing electromagnetic survey being undertaken on Orion’s 1 900 m² licence area.