Orion Minerals raises capital to advance Prieska Copper Zinc Mine development

Orion Minerals’ share price shot up 7.1% on the JSE Tuesday morning after it announced plans to issue shares and raise about R67 million to further its Prieska Copper Zinc Mine (PCZM).

The funds raised from the placement and share purchase plan will be used mainly to partially fund the development of the Uppers at the PCZM, including ongoing dewatering and site works; for mine development optimisation studies, and ongoing site works at the Okiep Copper Project, the Australia and Johannesburg-listed company said in a notice Tuesday.

The funds will also be used for general working capital purposes, including work associated with the finalisation of off-take related funding for the development of PCZM. Typically, company share prices fall when a share issue-for-cash is announced, so the higher share price indicates investor confidence in the mining development company's prospects.

The share price had gained over 7% to 14 cents on the JSE by Tuesday midday. The price has nevertheless fallen from 20 cents a year ago. The capital raise entails the issue of 522 million shares to investors. There are some 6.85 billion shares in issue.

The mine in June hosted Mineral and Petroleum Resources Minister Gwede Mantashe at Orion’s flagship PCZM, as it progresses towards becoming a copper and zinc producer.

The visit had followed the release of the PCZM Definitive Feasibility Studies in March, which outlined a two-phase development strategy to de-risk the mine’s development strategy and accelerate value creation.

The company said in a statement at the time that this plan should deliver first production of the Upper-level phase within 13 months of the start of construction. Orion had delivered positive studies for both PCZM and the Flat Mines Project at Okiep.

The company said on its website that PCZM had the potential to become a long-life, financially robust mining operation with an annual steady-state production of 22 kilotons of copper and 65 kilotons of zinc.

Orion’s former MD and CEO Errol Smart said in the quarterly report to the end of December 2024, that: “2025 is set to be a big year for Orion as we transition from being explorers to becoming mine developers.”

During the December 2024 quarter, good progress was made on the Definitive Feasibility Studies (DFS) for both PCZM and the project in Okiep. Both studies were then released at the end of the quarter to March 2025.

“Both studies delivered favourable outcomes, confirming the ability to deliver safe, modern, and fully mechanised copper mines,” the company’s new MD and CEO Tony Lennox said in its March quarterly Activities Report.

At that time, the company said its key focus areas for the coming months were project financing; project implementation planning; concentrate off-take negotiations; agreements with service providers for key early works activities and long-lead time items.

“The PCZM study has demonstrated robust financial metrics...the feasibility study for Flat Mines is a baseline and requires further optimisation over the coming months. We envisage developing multiple mines at Okiep over time,” he said.

While copper is currently one of a few minerals required in abundance for the global energy transition, many easily accessible copper ore deposits in the Northern Cape were mined out in the 1980s, but copper mining ceased due to ore depletion, higher costs, deeper and lower-grade deposits, ageing infrastructure, copper prices that were often too low, policy uncertainty, and the shift in the Northern Cape to the more profitable mining of iron ore, diamonds, and manganese.

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