A Bankable Feasibility Study (BFS) has confirmed the strong economics of Orion Minerals’ proposed underground and open-pit mining operation at the Prieska copper/zinc project in the Northern Cape. The BFS examines a 10-year ‘Foundation Phase’ delivering payable metal production of 189 kt of copper and 580 kt of zinc in differentiated concentrates. The capex requirement is estimated at A$402 million (US$282 million) with the payback period from first production being 2,9 years.
Much of Prieska mine’s infrastructure, including the main 1 024 m-deep, 8,8 m-diameter hoisting shaft (Hutchings Shaft), remains intact.
Acquired by Orion in early 2017, the Prieska project essentially involves reopening the past-producing Prieska mine, located approximately 60 km south-west of the town of Prieska and 270 km south-west of Kimberley, which was operated by Anglovaal subsidiary Prieska Copper Mine Limited (PCM) from 1971 until 1991. Much of the mine’s infrastructure, including the main 1 024 m-deep, 8,8 m-diameter hoisting shaft (Hutchings Shaft), remains intact, although the mine is currently flooded to a depth of 330 m below surface.
During the years it was active, the mine – which exploited a VMS-style deposit with mining going down to a depth of 900 m below surface – processed 46 Mt of run-of-mine (ROM) material and produced 1,10 Mt of zinc and 0,43 Mt of copper as high grade concentrates whilst achieving average processing plant recoveries of 84,3 % for zinc and 84,9 % for copper. The concentrates were sent to either O’kiep or Zincor for smelting or Saldanha Bay for export.
Orion, which is listed on the ASX and JSE, is planning to mine what it calls the Deep Sulphide or Deeps resource, which is sulphide ore remaining at the lower levels of the mine and below the Hutching Shaft, supplementing this with an open-pit operation which will commence on the conclusion of underground mining in Year 9 of operations and run for roughly 17 months. The Deeps resource will be mined at a steady-state rate of 2,4 Mt/a and the open-pit resource at 1,2 Mt/a. Known as the +105 Level deposit, the open-pit resource consists of shallow supergene material left as part of the pillar supporting the upper levels of the mine.
The combined project probable ore reserves amount to 13,62 Mt grading 1,1 % Cu and 3,2 % Zn, which translates to 143 kt of copper metal and 433 kt of zinc metal. These reserves make up 65 % of the Foundation Phase production target, with inferred and indicated mineral resources accounting for 21 %. Inferred and indicated mineral resources incorporated in Mine Stope Optimiser shapes and the Whittle pit optimisation pitshell make up the remaining 14 %.
The Hutchings Shaft and underground workings currently contain a volume of 8,7 million m3 of accumulated water. Dewatering of the workings via a pumping system to be installed in the Hutchings Shaft is planned, an exercise which will take 18 months. Water will be pumped into a 1 million m3 volume dewatering dam on surface, from where mechanical evaporators will be used to accelerate evaporation.
Examinations and testing of the shaft steelwork from surface down to 30 m below the water level, along with the use of video camera inspection down to 200 m below the water surface, as well as shaft probing and water quality testing to within 100 m of the shaft bottom, indicate that the majority of the shaft is in good order. Sections of the shaft will be refurbished. A pre-owned Koepe rock winder and a double-drum men-and material winder with new ropes and equipment have been identified for purchase and installation. It is envisaged that the steelwork refurbishment will be carried out concurrently with the underground dewatering campaign to reduce the project construction time and make optimal use of the available construction crews.
According to the DFS, the mineralisation of the Deeps resource shows considerable variations in both thickness and dip resulting in the use of a variety of stoping methods to maximise extraction and minimise dilution. Based on the analysis of the resource, it has been demarcated into four zones – the North-west Upper Zone, situated above the 957 Level; the North-west Lower Zone, situated below the 957 Level; the South-east Zone, situated below the 957 Level; and the Central Zone, located centrally below the 957 Level.
Mining methods to be deployed will comprise Longitudinal Long-Hole Stoping with Fill (LLHOSF), Long-Hole Stoping with Fill (LHOSF); and Drift and Fill (D&F).
Trackless mining methods will be used for drilling and blasting with LHD and truck haulage to deliver rock to passes where it will be tipping onto a train haulage level. The train system will tram rock back to the shaft for hoisting. Tunnel development and declines will provide access to the orebody for production activities. Tunnel dimensions are planned to be 5,5 m wide x 5 m high for declines and 5 m x 5 m for access tunnels and production drilling drives. Paste back-filling will take place to fill the stopes once they have been mined out which assists in maximising ore extraction.
With regard to the open-pit operation, the planned pit sits above previously mined out stopes (voids) and will require paste back-filling. Mining will take place with conventional open-pit methods of drilling, blasting, loading and hauling. As with the underground phase, a suitable mining contractor will be utilised who will also supply the mining fleet. The open-pit operation will mine approximately 100 000 tonnes of ore and 850 000 to 1 million tonnes of waste a month.
Ore processing is planned to involve conventional differential froth flotation to produce separate copper and zinc concentrates at average grades of 24 % Cu and 50 % Zn from underground mined material. Minor modifications to the processing plant will allow the open-pit material to be treated at the end of the mine life, on a campaign basis, to produce separate copper and zinc concentrates at average grades of 26 % copper and 36 % zinc.
The flowsheet for processing underground material is similar to the flowsheet used during previous mining operations. Life-of-mine metal recoveries into concentrates are anticipated to be 84,4 % for Cu and 83,9 % for Zn from treating underground mined material and 66,7 % and 59,4 % for Cu and Zn respectively for open-pit mined material.
Water for the mining operations is planned to be supplied from the Orange River, at a rate of 4,1 megalitres per day, via the existing water pipeline. The power requirement of 38 MW is expected to be sourced from Eskom via the on-site Cuprum substation. Plans are at an advanced stage to commission the establishment of a renewable energy alternative source to national grid power supply, capable of potentially providing 52 % of the mine’s energy needs in the near term.
Commenting on the results of the study, Orion’s Managing Director and CEO, Errol Smart, said: “We are delighted with the results of the BFS, which confirm the quality and scale of the Prieska project and put Orion firmly on-track to become a major new South African base metal producer. The BFS suggests that Prieska will be a high-margin, long-life asset, delivering A$1,1 billion of pre-tax free-cashflow, a pre-tax Net Present Value of A$574 million at an 8 % discount rate and an all-in-sustaining margin of 44 % during the 10-year Foundation Phase of the project.
“Importantly, the capital payback period is short – at just under three years from first production, with a low unit operating cost base to take advantage of most metal price environments. There is also ample scope to significantly extend the mine life through further mining studies, drilling and exploration programmes to extend the deposit, which remains open at depth and along strike. The huge potential for additional satellite discoveries both within the immediate near-mine environment and within the broader region provides us with a very strong project pipeline which we believe will see us operating in this district for many decades to come.”
He added that the Prieska BFS also provided a platform for Orion to progress the development of what will be a new-generation mining project for South Africa, fully-compliant with the new South African Mining Charter and backed by a strong group of BEE investors and including host community and employees as shareholders alongside existing cornerstone shareholders.
“With the Prieska BFS now complete and granting of the Mining Right imminent, we intend to fully focus on progressing discussions with project financiers, concentrate off-take partners and key suppliers,” he said. “We expect to be in a position to make a final investment decision for the Prieska project development in the second half of this year, putting us on-track to commence construction in late 2019 or early 2020. I would like to acknowledge the enormous effort of our hard-working team in delivering this outstanding result, which sets Orion up to begin its transformation from explorer to developer.”
Photos courtesy Orion Minerals