NOM is acquiring the Prospecting Rights and the recently granted Mining Right at Okiep from Southern African Tantalum Mining Proprietary Limited (SAFTA), in which the IDC is currently a 43.75% shareholder
Pre-development funding for Okiep Copper Project. (Credit: Zac Edmonds on Unsplash)
Orion Minerals Limited (ASX/JSE: ORN) (Orion or the Company) is pleased to advise that, after finalising recently announced pre-development funding arrangements with the Industrial Development Corporation of South Africa (IDC), Orion has taken another important step in advancing its brownfields Okiep Copper Project in the Northern Cape Province of South Africa towards the planned restart of mining operations.
Orion has entered into definitive agreements which will see the IDC acquire 43.75% of the shares in New Okiep Mining Company Proprietary Limited (NOM) and trigger pre-development funding arrangements for the Flat Mines SAFTA area, as announced on 7 September 2022.
With the conditions precedent in the definitive agreements now fulfilled, the IDC funding of pre-development costs for the Flat Mines Project is expected to flow shortly, with initial funding of ZAR22 million (~A$1.9 million) expected to be received by NOM during November 2022.
The IDC funding of pre-development costs in the amount of ZAR35 million (~A$3.1 million) will be advanced to NOM on the same terms as the pre-development funding amount of ZAR44 million (~A$3.9 million) that Orion has already advanced to NOM.
Orion announced on 16 September 2021 that the IDC had signalled its intention to remain a key strategic partner in the Flat Mines Project, currently owned by Southern African Tantalum Mining Proprietary Limited (SAFTA), and to work with Orion in the development of NOM, which will acquire the assets owned by SAFTA, which is currently
43.75% owned by the IDC.
The shareholding in NOM will, in the future, include Orion’s 100% owned Area Metal Holdings (Pty) Ltd (AMH6) as the majority owner with 56.25% holding of the ordinary shares, the IDC as a key strategic partner, and with historically disadvantaged empowerment partners holding shares in furtherance of the ownership objectives of
the Mining Charter 2018 (refer Figure 1).
The execution of definitive agreements, and acquisition of shares in NOM by the IDC, follows Orion’s 7 September 2022 announcement that it had entered into non-binding term sheets with the IDC and Lulamile Xate regarding the key principles of the funding and Historically Disadvantaged South African (HDSA) ownership participation
arrangements for NOM.
Orion, the IDC and Lulamile Xate anticipate finalising and executing the definitive agreements for the HDSA ownership arrangements within the coming months, with the implementation of the HDSA ownership arrangements being conditional on the transfer of the assets from SAFTA to NOM, per the terms and conditions of the SAFTA Asset Acquisition Agreement (refer ASX/JSE releases 2 February 2021 and 2 August 2021).
Orion has completed a positive Scoping Study (refer ASX/JSE release 3 May 2021; summary in Appendix 1) for the Flat Mines SAFTA area (refer Figure 2) which demonstrated the economic merit of developing a foundation phase mining operation at the SAFTA properties. The Scoping Study supported a moderate scale start-up mining
operation on known, drilled copper deposits.
Orion’s aspiration, with project partners the IDC and BEE partners led by Lulamile Xate, is the early reestablishment of mining operations on the brownfields SAFTA site, while conducting the required work and engineering studies to support the long-term aspiration of achieving production from the Okiep Copper Project (OCP) at a similar scale to past owners Newmont and later Goldfields under the Okiep Copper Company.
The OCP is a significant growth opportunity for Orion, with the potential to become a second base metal production hub for the Company in the Northern Cape, alongside its flagship Prieska Copper-Zinc Project, located 450km east of the OCP.
Source: Company Press Release