Name of the Project
Prieska Copper Zinc Mine (PCZM).

Location
Northern Cape, South Africa.

Project Owner/s
Base metals explorer and developer Orion Minerals, through Prieska Copper Zinc Mine.

Following the quarter ended March 31, 2026, the Industrial Development Corporation of South Africa (IDC) agreed to convert its convertible loan facility into equity in Orion’s subsidiary, PCZM HoldCo. 

Orion announced on May 29, 2026, that the IDC had converted its R344.5-million convertible loan facility into equity in PCZM HoldCo, in accordance with the terms of the facility and implementation agreements. The IDC is now a 23.8% shareholder in PCZM HoldCo (giving the IDC an effective interest of 16.7% in PCZM), with a shareholder loan claim against
PCZM HoldCo of about R272.4-million ($23.3-million). As a result of the conversion, the IDC has ceased to be a secured lender to the Prieska project and all security granted in connection with the facility agreement has been released.

Project Description
The Prieska Copper Zinc Mine is located on a significant volcanogenic massive sulphide deposit. The fully permitted mine last operated in 1991 and is one of the world’s top 30 volcanogenic massive sulphide base metal deposits, with recorded historical production of more than 430 000 t of copper and one-million tonnes of zinc from 46.8-million tonnes of sulphide ore milled.

PCZM contains a Joint Ore Reserves Committee-compliant mineral resource totalling 31-million tonnes at 1.2% copper and 3.6% zinc, including indicated resources of 20-million tonnes at 1.22% copper and 3.47% zinc and inferred resources of 11-million tonnes at 1.2% copper and 3.9% zinc. Probable ore reserves total 15.6-million tonnes at 1.1% copper and 3.1% zinc, resulting in 164 000 t of contained copper and 458 000 t of contained zinc.

A definitive feasibility study published in March 2025 confirmed the potential to develop a long-life, financially robust mining operation through a two-phase development strategy aimed at derisking the development pathway and fast-tracking value creation from a safe, modern, mechanised underground base metal mine.

The project has the potential to develop into a long-life operation with yearly steady-state production of 22 000 t of copper and 65 000 t of zinc. The planned operation starts with the Upper-Level, or Uppers, phase, which is based on mining near-surface supergene sulphide ore accessible from an existing decline. This phase will run for 4.3 years and will process ore at a rate of 240 000 t/y.

During the Upper-Level mining phase, pumping in the main shaft will be undertaken to dewater the mine, which is flooded from 265 m below surface. This will be followed by refurbishment of the main shaft and construction of the mining infrastructure required for the Deeps phase.

The Deeps phase is planned to start after mine dewatering, shaft refurbishment and construction of the mining infrastructure. Mining of the Deeps has a life-of-mine (LoM) from first production of 11 years and will overlap with the last 2.2 years of Upper-Level mining, resulting in a combined LoM of 13.2 years. Development and production mining at the Deeps will start in month 28 and build up over a further 27 months to a steady-state rate of 200 000 t a month, or 2.4-million tonnes a year.

Ore from the Upper-Level and Deeps mining areas will feed separate froth-flotation processing plants. The Uppers plant will produce a bulk copper concentrate with important gold and silver by-product credits, while the Deeps plant will produce separate copper and zinc concentrates, with small amounts of gold and silver recovered in the Deeps copper concentrate.

Potential Job Creation
About 200 to 300 jobs are expected to be created during the early mining phase and about 1 000 at full production.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at an 8% discount rate, of A$797-million, or R9.97-billion, and a pretax internal rate of return of 31%, with a payback of 5.8 years from the start of construction. The post-tax net present value is A$568-million, or R7.11-billion, and the post-tax internal rate of return is 26%.

Capital Expenditure
Total project capital expenditure, including contingency, is estimated at A$607-million, or R7.59-billion. Expenditure to achieve first concentrate production in the initial Upper-Level phase is estimated at A$49-million. The peak funding requirement is estimated at A$578-million.

Planned Start/End Date
Construction of the Uppers is expected to start once the remaining conditions precedent for the Glencore financing and offtake agreement have been completed. In its March 2026 quarterly report, Orion expected these conditions precedent to be completed by the end of the second quarter of 2026 and stated that first concentrate production was targeted for 2027.

First production from the Upper-Level phase is expected 13 months after the start of construction. Development and production mining at the Deeps is planned to start in month 28 and build up over a further 27 months to a steady-state rate of 200 000 t a month, or 2.4-million tonnes a year. First concentrate production from the Deeps is planned for month 42.

Latest Developments
During the March 2026 quarter, Orion executed a binding prepayment agreement with a wholly owned subsidiary of Glencore for a $250-million facility linked to the sale of bulk, copper and zinc concentrates from PCZM. The facility comprises a $40-million Tranche A for the construction and startup of the Uppers and a $210-million Tranche B for the construction and startup of the Deeps, including the potential for an early drawdown of up to $50-million for early works, subject to conditions being met.

The remaining conditions precedent to the Glencore financing and offtake agreement, which include South African Reserve Bank and other regulatory approvals, updated intercreditor arrangements and linked offtake agreements, were expected to be completed by the end of the second quarter of 2026. Post-quarter end, the IDC agreed to convert its convertible loan facility into equity in PCZM HoldCo, subject to customary conditions precedent.

Operational readiness and value engineering continued during the quarter. Several tenders were finalised, with contractors shortlisted or preferred contractors appointed. Torque Africa has been appointed as preferred drilling contractor, while selection of the Upper-Level mining contractor and mechanised mining fleet vendor was scheduled for the second quarter of 2026. 

PCZM, CENEC (Central Energy Corporation), Prieska Power Reserve and the Siyathemba local municipality have also agreed terms of reference and a memorandum of understanding for an upgrade of the Orange river water extraction and treatment infrastructure, while engagement with Eskom continues on staged delivery of PCZM’s 70 MVA power requirement.

Key Contracts, Suppliers and Consultants
Fraser McGill Mining & Minerals Advisory; METC Engineering; Gariep Mining and Exploration Services; Paterson and Cooke; Power Plant Electrical Technologies; Prysm; Professional Cost Consultants; Z Star Mineral Resource Consultants; P2 Mining, a division of Newrak; FlowCentric; EcoElementum; Sasol ENAEX; Solar Mining Services; Aquaplex; Partzone; Quebar; UMS Shaft Sinkers; LMMS Consultants; Practara Metals and Mining Advisory; Sound Mining; Torque Africa; and MDA Group.

Contact Details for Project Information
Orion Minerals, tel +27 11 880 3159 or email info@orionminerals.com.au.