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Africa|Coal|Copper|Environment|Infrastructure|Mining|PROJECT|Projects|Resources|Surface|Infrastructure
Africa|Coal|Copper|Environment|Infrastructure|Mining|PROJECT|Projects|Resources|Surface|Infrastructure
africa|coal|copper|environment|infrastructure|mining|project|projects|resources|surface|infrastructure

South Africa now a compelling world investment story, upbeat Orion highlights

Orion Minerals webinar covered by Mining Weekly's Martin Creamer. Video: Darlene Creamer

19th June 2024

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – “The sun is finally shining on us,” an upbeat Orion Minerals CEO Errol Smart enthused during an Australia/South Africa webinar on Wednesday, when he outlined how South Africa has become one of the world’s most compelling short-term investment stories.

Predicting that this country's investment narrative would super heat over the next couple of weeks, he pointed out how strongly this was advancing Orion’s Prieska copper project, where trial mining has been under way for some time, as well as Orion's high-grade Okiep copper project, which is following closely behind.

“Copper is a very strong thematic in the macroeconomics around the world,” Smart highlighted during the webinar covered by Mining Weekly. (Also watch attached Creamer Media video.)

Orion’s Prieska copper and zinc project already has mining under way, with, once again, Okiep not far behind.

Both have bankable feasibility studies (BFSs) at a time when the rand has strengthened, interest rates are likely to moderate, and there is a semblance of medium-to-long-term certainty in the outlook amid one of the main pillars embraced by the new government being the promotion of economic growth and stability.

The Northern Cape, which hosts Orion brownfield and greenfield base metals projects, has historically produced more that 2.5-million tons of copper.

Already on site at Prieska are 160 people with ore being elevated to surface daily.

The Johannesburg- and Sydney-listed Orion is looking to having plants in place and production commencing at the end of 2025. Seventy-five per cent of Orion's equity trading happens on the Johannesburg Stock Exchange (JSE), and only 25% on the ASX.

Production is expected to commence 12 to 18 months after project funding has been completed amid completion of the BFSs being imminent.

“By August it’ll all be handed over to the independent experts,” said Smart.

The Minerals Corporation is acting as the independent debt financier for the BFS and discussion is under way with equity financiers and prospective offtake-related financiers.

Existing resources and reserves will be the basis on which mining gets under way and existing feasibility studies indicate the potential to produce 50 000 t/y of copper equivalent for 17 to 18 years.

In parallel, a period of resource and reserve growth will ensue to take output beyond the 50 000 t/y mark.

STRONG SOUTH AFRICAN FOLLOWING     

Dual-listed Orion’s fully fungible shares can be bought on one exchange and sold on the other.

The R1.3-billion, or A$110-million, market capitalisation company has roughly six-billion shares on issue, 44% of them in trading accounts on the JSE and 56% on the ASX, with South Africans holding 43% of the shares of the company, Europeans 33%, and Australians 23%. Europeans have opted to hold the shares on the ASX.

“With that said, the South Africans understand the South African environment better and trade actively. We've got a massive retail following in South Africa, with more than 30 000 South African shareholders as retail shareholders, which is not the price determinant."

With reference to South Africa’s new government, Smart said: “In these days, we'll likely have 90% of the trading happening on the JSE.”

Orion’s largest shareholder with 17.9% is Tembo Capital, a European fund that is managed out of London.

The second biggest shareholder with 12.6% of the shares is the Delphi Group, which is a German fund.

South African mining company Clover Alloys, which is primarily involved in chrome mining, holds 8.8%, and Thomas Borman, formerly of BHP Billiton, 5.4%.

The Orion chairperson is Denis Waddell, who lives in Perth, and Boksburg-born Smart is based in South Africa.

Orion does not have professional and operating staff who must be flown in and out of South Africa.

Director Godfrey Gomwe is the former CEO of Anglo Coal and most recently the CEO of MC Mining, which has been taken over on the ASX.

Director Anthony Lennox is the former MD of Rio Tinto’s Palabora copper mine, which is South Africa's largest operating copper mine, while director Patience Mpofu is resident in Sydney.

Director Mark Palmer, who represents Tembo, is based in London.

“Yesterday, we saw JP Morgan coming out, and moving us from underweight to overweight,” Smart enthused.

This has been done against the background of Prieska’s mining infrastructure including a ready-made shaft that descends to a depth of 1 100 m.

Edited by Creamer Media Reporter

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