Funding package comprising an US$80 million precious metal stream plus additional A$10 million funding arrangement to underpin early production strategy and underground mine dewatering. Significant funding package for the Prieska Copper-Zinc Mine negotiated with Canadian streaming and royalty finance company, Triple Flag Precious Metals.

  • Non-binding term sheets have been signed and are now being advanced under exclusivity to definitive agreements, expected during Q3 CY2022.
  • US$80 million (~A$110 million) Stream Funding to be advanced against the delivery of 84% of future gold and silver by-product production. Orion will also receive payments of 10% of the delivered precious metal value at spot gold and silver at the time of delivery.
  • The Stream Funding is conditional on the mine development being fully funded, finalisation of an executable mine plan to Triple Flag’s satisfaction and, if required, South African regulatory approvals.
  • An additional A$10 million (~US$7 million) to be advanced against calculated payments equal to 0.8% of gross revenue from future mineral sales.
  • The A$10 million funding is conditional on Orion securing an additional A$20 million in funding for the commencement of mine dewatering and, if required, South African regulatory approvals.
  • The US$87 million funding package, if concluded, will underpin the completion of a Feasibility Study for early mining at Prieska (refer ASX/JSE release 20 January 2022) and to commence mine dewatering and mine development.

Orion’s Managing Director and CEO, Errol Smart, commented:

“We are absolutely delighted to have achieved this significant milestone for the funding of the Prieska Copper-Zinc Project.

“We have developed a strong working relationship with the Triple Flag team and have been particularly impressed by their technical mining expertise and incisive questioning, as well as their diligent assessment of Orion’s ESG commitment and their own alignment with our ESG goals.

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“We also took great comfort from reports of how Triple Flag had engaged with one of their existing South African streaming counterparties during the Covid lock-down period when the streaming counterparty endured difficulties associated with the temporary shutdown of a converter at its primary concentrate offtake, and these challenges affected mine operations and the delivery of metal.

“Triple Flag worked with the mining company and its host community to weather the storm, providing relief funding for the community during this very difficult time. That degree of integrity really impressed us.

“This proposed transaction, if completed, includes funding from Triple Flag to support Orion’s community social funding projects with up to US$55,000 per annum for the life of the Prieska Copper-Zinc Mine mine, which funding will commence upon the payment of the first tranche of the Stream Funding.”

“We look forward to working with the Triple Flag team to finalise the funding arrangements and commence mine dewatering at Prieska Copper-Zinc Mine and complete the early mining feasibility studies that are currently underway to determine the optimum development path.”

“We see the commencement of mine dewatering as the most important next step for the development of the Prieska Copper-Zinc Mine, with this milestone marking the start of an exciting period of unlocking growth and value.”

Triple Flag’s CEO, Shaun Usmar, commented:

“We are really pleased to achieve this important step towards providing Orion with funding support for a very exciting base metals mine development.”

“Triple Flag prides itself on partnering with companies on projects that share our high ESG credentials, with Orion demonstrating a strong commitment to area of ever-increasing importance.”

“In a world seeking copper to enable decarbonization and climate change imperatives, the Prieska Project is well positioned for near-term supply delivery given the brownfield nature of this project and the significant mineral endowment that promises a long and prosperous future for Orion, local communities, and its stakeholders. We are excited about the prospect of playing a key part of delivering this mine via our A$10 million early investment, US$80 million precious metals by-product stream and community support programs.”

Orion Minerals has also announced a significant development in its strategy to create a fully integrated base metal mining and processing business, producing high-value metals for the fast-growing battery materials sector, achieved through entering into a Term Sheet that could see it acquire a cornerstone interest in a future base metal refining facility in the Northern Cape region of South Africa.

The Term Sheet contains binding exclusivity arrangements through which Stratega Metals will undertake technical due diligence, including amenability test work, for the use of carbo-chloro metal vapour extraction technology (CCMVT) for base metal refining of polymetallic concentrates produced from Orion’s Northern Cape projects.

Errol Smart, commented:

“We are thrilled to have secured exclusive access to what we believe could be game-changing refining technology to produce battery metal salts and fine carbonyl powders, both of which are experiencing surging demand within the burgeoning battery manufacturing sector. The battery materials sector is a key focus for Orion due to its strong growth outlook and its pivotal role in driving reduced global carbon emissions.

“Not only is the Stratega/TCM refining process able to produce premium metal products, but the process also has low environmental impact and is well suited for the use of clean, renewable energy. The process comprises a chemical vapour technology that does not consume any water, has low energy consumption, produces close to zero emissions, and occupies a very small surface area.

“These characteristics make it an ideal fit with Orion’s ambitions to become a fully-integrated mining and processing business that produces premium metal products with strong ESG credentials that are certified from point-of-source to market.”

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