Orion Minerals has struck a long-awaited draft $US87 million ($124m) funding deal for its Prieska zinc-copper project in South Africa.
The stream funding from Canadian streaming and royalty finance company Triple Flag Precious Metals will be advanced against the delivery of future gold and silver by-product production from the mine.
The funding is conditional on the mine development being fully-funded, finalisation of an executable mine plan and necessary South African regulatory approvals.
An additional $10m (US$7m) will be advanced against calculated payments equal to 0.8 per cent of gross revenue from future mineral sales.
That funding is conditional on Orion securing an additional $20m in funding for the the beginning of mine dewatering.
The funding package will underpin the completion of a feasibility study for early open-pit mining at Prieska and mine development.
Orion’s managing director Errol Smart looked forward to finalising the funding arrangements with Triple Flag, beginning mine de-watering at Prieska and completing early mining feasibility studies to determine the project’s optimum development path.
Orion has previously placed a $480m price tag on refurbishing and restarting the shuttered underground mine in South Africa’s Northern Cape region, but is now eyeing the early development open pit to cut start-up costs.
Prieska last operated in 1991 when then-owner Anglovaal decided to close it because of the deteriorating economic and political environment in South Africa at the time.
It hosts a globally significant VMS resource of 30.49Mt at 1.2 per cent and 3.7 per cent zinc.
Orion also announced today it had signed a term sheet with Stratega Metals to investigate the use of its licenced refining technology to produce specialist battery precursor products from its Jacomynspan nickel-platinum group elements project also in the Northern Cape.
Orion shares closed down 0.1¢ at 2.4¢