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Orion Minerals says June quarter productive despite volatile operating environment

In the quarterly activities report released on Thursday, the group said it had managed to secure $87 million (R1.4 billion) in funding for the Prieska Copper Zinc project in the Northern Cape. Picture: Reuters

In the quarterly activities report released on Thursday, the group said it had managed to secure $87 million (R1.4 billion) in funding for the Prieska Copper Zinc project in the Northern Cape. Picture: Reuters

Published Jul 29, 2022

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Orion Minerals share price surged by 4 percent on the JSE on Thursday, after it said the June quarter was a busy and productive period, despite a volatile operating environment.

The shares traded at R0.22 after the group said in its quarterly activities report released on Thursday, it managed to secure $87 million (R1.4 billion) in funding for the Prieska Copper Zinc project in the Northern Cape. It had also achieved outstanding high-grade results from its in-fill drilling.

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The funding of the Prieska Copper-Zinc Project is with the Canadian streaming and royalty finance company, Triple Flag.

“We have developed a strong working relationship with Triple Flag underpinned by a shared commitment to excellence in environmental, social, and corporate governance (ESG), community engagement, and the development of new generation mining projects that will deliver significant benefits for the future of South Africa,” Orion said.

Orion’s managing director and chief executive Errol Smart said: “Notwithstanding the extremely volatile and difficult conditions in global financial markets during the quarter, and the significant short-term pull-back in commodity prices, we believe Orion remains well placed to realise our ambition of becoming 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.

“The quality of our assets positions us to be a key supplier of future-facing metals for the impending global energy transition,” he said.

On the project development front, Smart said the Orion team continued to re-evaluate the Prieska Project development schedule to assess the potential to bring forward production – even on a reduced scale initially – at Prieska, as announced last quarter.

“This could deliver a major breakthrough for the project,” he said.

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Smart said investigations into the early production scenario and the potential to extract remnant pillars had progressed well, with outstanding results received during the quarter from in-fill drilling of the +105 Level Crown Pillar.

“Importantly, the grades intersected to date mostly exceed that of the average grade of the standing inferred resource estimate, making the early start of mining via an open pit an increasingly attractive opportunity,” Smart said.

According to Smart, recession fears, the war in Europe, interest rate hikes, and China’s lockdowns all contributed to declining base metal prices during the quarter. Copper – widely regarded as a barometer for global economic activity – peaked in March, 2022 but has since been swept along by the bearish sentiment that caused all base metal prices to fall sharply towards the end of June, 2022 quarter.

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Metal prices have since stabilised and analysts are projecting a recovery in the coming months.

“While zinc and nickel were not immune to the commodity price sell-off, the nickel market appears to have stabilised following the March, 2022 ‘short-squeeze’ price spike which resulted in a week-long suspension of nickel trading on the LME,” Smart said.

BUSINESS REPORT ONLINE

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