Byrnecut to dig into Orion’s Prieska copper-zinc underground project

Orion Minerals Limited says it has concluded a memorandum of agreement with mining contractor Byrnecut Offshore envisaging an alliancing agreement for underground mine development and production at the Prieska copper-zinc project in the Northern Cape province of South Africa.

The agreement follows the announcement of the grant of the Mining Right for the Prieska copper – zinc mine and, Orion says, “paves the way for Byrnecut to bring the benefit of its experience to the development and operation of the Prieska project which is intended as a global-best practice mechanised mining operation”.

Orion has achieved several milestones in the 16 months since the submission of the Mining Right application, including the announcement of a black economic empowerment (BEE) partnership, the upgrading of the Prieska mineral resource to 30.49 Mt at 1.2% Cu and 3.7% Zn and the completion of the Prieska Bankable Feasibility Study (BFS).

While the Foundation Phase BFS demonstrated strong project economics with a post-tax net present value (8% discount) of A$408 million ($273 million), Orion says it has already identified numerous opportunities to improve on the mining plan set out in the BFS and has commenced work with post-BFS field trials, optimisation and refinement studies.

Key terms of the agreement with Byrnecut are that the parties will seek to enter an alliancing agreement related to underground mining at the Prieska project, whereby Byrnecut will undertake to provide underground mine development and mine production services; commit to promoting local employment and skills transfer in support of transformation of the industry; and commit to collaborating with local BEE enterprises.

Formalising the agreement is one of the key project development milestones that follow the release of the BFS for the establishment of high margin and long-life underground mining operations at the Prieska project. The planned foundation phase of operations would result in the mining and processing of 2.4 Mt/y of run-of mine feed for 10 years, to sell approximately 21,000 t of copper and 70,000 t of zinc as differentiated concentrates each year.

Other post-BFS workstreams in progress to prepare the project for execution include third-party peer reviews of the BFS in preparation for funding discussions, the value engineering of components of the BFS, mine-to-market business plan optimisation using the Whittle Enterprise Optimisation process, pilot-scale water treatment field trials of the water accumulated in the underground excavations and the expedition of the various ancillary licences required to operate a mine. The company said substantial progress is being made in all areas.

Orion’s Managing Director and CEO, Errol Smart, said: “We are delighted to include Byrnecut into the list of partners we will be working with to establish what will be another world-class mine in the Northern Cape.

“Byrnecut has an impressive reputation on the African continent both in terms of their operational proficiency and their approach to skills transfer and harmonious relations with local communities. Their involvement in developing Prieska will be invaluable.”