Errol Smart, Managing Director & CEO,

ORION MINERALS

"Orion Minerals has the vision to grow into a sustainable mid-tier, green metal producer in the near future."

Can you highlight some of Orion Minerals’ achievements since 2019?

In May 2020, Orion Minerals released an updated BFS for the Prieska project with important optimisations. Compared to our 2019 BFS, there was a significant improvement in the cash flows and NPVs of the business, and the project is even more financially compelling. The mine is now forecast to deliver AUD1.6 billion of pre-tax free-cash-flow over 12 years and a pre-tax Net Present Value of AUD779 million (at an 8% discount rate), with the initial 12-year LOM plan delivering an impressive 47% all-in-sustaining margin, underpinned by a robust mine plan delivering more payable metal in differentiated high quality copper and zinc concentrates.

By October 2020, Prieska was fully permitted and construction-ready. Since then, we have been working on the financing – which Covid is frustrating to some extent. However, we are well underway and speaking to a number of debt, equity and offtake related finance institutions. Our objective is to finish financing by Q3 2021 and be in construction by year-end.

We also continued exploration work on the belt north of Prieska, with excellent outcomes. In April 2021, we drilled the highest-grade intersection that has ever been drilled at our Jacomynspan nickel project, 65 km north of Prieska. We also discovered an interesting second VMS hub at the Boksputs copper-gold project 100 km north of the Prieska project.

Orion Minerals was recently awarded the Emerging ESG Leader for junior miners in Africa award by the Australia Africa Mining Exploration Group – acknowledging the work we have done so far, before even starting development and production. The company has put significant effort into including our stakeholders in the business so that our host community become shareholders, suppliers and employees.

Orion Minerals has the vision to grow into a sustainable mid-tier, green metal producer in the near future.

What renewable energy sources are you incorporating at Prieska?

Orion Minerals is incorporating a bespoke solar and wind energy plant into the project. We already have 175 MW of solar power feeding our mine substation and 250 MW of wind power will be commissioned over the next three months. By the end of 2021, we will have over 300 MW of renewable energy feeding into our mine substation and then into the national grid.

How is Orion Minerals creating value for investors at the Okiep copper complex (OCP)?

We have a strong team in South Africa and realized that our strategic positioning could be expanded to increase shareholder value. Like Prieska, the Okiep project had significant data available, solid infrastructure in place, and similar mining methods and processing could be utilized. The Carolusberg – Koperberg complex is situated 20 km southeast of the Flat Mine complex that hosts the current OCP mineral resources base of 11.5 million mt at 1.4% Cu for 159,000 mt of contained copper.

We have not yet acquired the asset and are five months into due diligence, but we have defined high priority drill targets. A final decision will be made in July 2021. We have completed a scoping study that shows that we can recover orders of magnitude on our investment cost from a small-scale project. Owned by major mining companies, Okiep used to produce approximately 40,000 mt/y of copper for many decades. With the increase in metal prices, the mineral resources available, and mining infrastructure already in place, the Okiep project is one with great potential.

By combining the Prieska project, producing approximately 22,000 mt/y copper, and the Okiep project, Orion Minerals is on a path to producing more than 50 000 mt/y.

Can you elaborate on the regulatory framework for mining in South Africa?

South Africa has a workable mining charter, particularly for newcomers like Orion Minerals that structure their business with the expectation of having to meet procurement obligations.

The South African mining industry has been in decline, however, it is witnessing changes given the recovery in commodity prices. The country is highly prospective, with many projects of quality and scale that can be readily brought back into production, and pre-developed ore bodies which can be further exploited. Greenfield exploration must restart and take advantage of modern exploration tools in this premier mineral region.

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