Orion Minerals shares drop 17.4% as capital raise continues

Orion Minerals’ share fell 17.4% on Wednesday after the release of results that showed it had continued to work on its transition to an operating mining company focused on clean energy transition minerals during the year to June 30.

“Orion's work programs focused on the completion of the Definitive Feasibility Studies (DFS) for the company's flagship Prieska Copper Zinc Mine (PCZM) and Okiep Copper Project (OCP). Each DFS was released on March 28, 2025,” the group said in a statement on Wednesday. The company, which is listed on the Australia stock exchange and the JSE, aims to be South Africa’s premier copper producer.

The share price was trading at 19 cents on Wednesday afternoon, down from 22 cents a year before. The company is also in the process of raising A$5 million (about R57m) via a placement to investors, and Orion chairman, Denis Waddell, the outcome of which is expected to be released on Thursday.

Post year-end, a non-binding term sheet was signed for $200m - $250m of financing and a concentrate offtake agreement with Glencore for the PCZM. Tranche A of the financing ($40m) would be used for the construction and startup of the Uppers at Prieska.

At PCZM, the DFS, covering both the Upper-Level and Deeps mining, indicated a post-tax net present value (NPV) of A$568m (R7.11bn) and a post-tax IRR (internal rate of return) of 26.2% over a 13.2-year Life of Mine (LoM).

The upgrade of the Cuprum electrical sub-station was completed to supply 15 MVA to PCZM. PCZM is now fully connected to the Eskom grid with an electricity supply agreement in place.

PCZM mine’s dewatering and forced evaporation mechanical and electrical infrastructure was installed.

Civil construction of the 13-hectare water storage dam/Paddock 1 of the future 65-hectare tailings storage facility (TSF) at PCZM was completed.

The mineral resource was updated to 31 million tons grading 1.2% Cu and 3.6% Zn for 370 000 tons of contained copper and 1 120,000 tons of contained zinc.

At OCP, the DFS for the Flat Mines Project, including the Flat Mine North, Flat Mine East, Flat Mine South, and Flat Mine Nababeep deposits, delivered a post-tax NPV of A$75m (R935m) and a post-tax IRR of 19% over a 12-year LoM.

The total mineral resources within the Flat Mines Area were updated to 11.5 Mt at 1.3% Cu for 152 000 tons of contained copper.

Confirmatory drilling was completed at Flat Mine North, Flat Mine East, Flat Mine South, and Flat Mine Nababeep.

A water use licence had been granted for the OCP, Flat Mines Area, representing the final permit required to progress the OCP to construction and production.

At PCZM, the "Upper-Level Phase" – based on mining the near-surface sulphide resource block, which is accessible from an existing decline – is expecting first production 13 months after the start of construction and continuing for 4.3 years.

The "Deeps Phase" will commence following completion of mine dewatering, refurbishment of the main shaft, and construction of mining infrastructure. Mining of the Deeps has a life of mine of 11 years and will overlap with the last 2.2 years of the Upper-Level mining.

Potential to enhance the financial outcomes through an optimisation process includes earlier production from Flat Mine North; mining higher grades by improved selectivity; reducing waste development; and reviewing the Flat Mine South mineral resource estimate and mine design to include the 2024 diamond drilling, the results of which were unavailable for inclusion in the DFS.

The company’s operating loss increased to A$15.36m, compared to an operating loss of A$7.94m at the same time last year. The basic loss per share increased by A$0.09 cents to A$0.18 cents.

The operating loss was primarily driven by contractor and advisor expenses of A$1.72m, exploration expenditure of A$6.34m, and finance income of A$4.92m.

The company is targeting first production from its key development project in late 2026/early 2027, with the aspirational goal of ramping up copper production to more than 30 ktpa and zinc production to 65 ktpa when both projects were in steady-state production.

BUSINESS REPORT