Orion clinches watershed $250m deal with Glencore

ORION Minerals finally has liftoff on its Prieska Copper Zinc Mine after unveiling today a major financing and offtake deal with Glencore of up to $250m.The Sydney- and Johannesburg-listed copper development firm said it would supply Glencore with production from PCZM situated in the Northern Cape province in return for $200m to $250m in project finance, worth R4.35bn in local currency.“This is a watershed moment for Orion with the proposed Glencore funding enabling the company to transition into a producer,” said Tony Lennox, CEO of Orion.The company needs about R6.7bn to redevelop the entire Prieska copper-zinc mine in South Africa’s Northern Cape. The mine, which operated in the 1970s, is forecast to produce 22,000 tons of copper and 65,000t of zinc a year based on a feasibility study completed in March.However, Lennox said in August first copper production from PCZM would be from its ‘uppers’ project in December 2026 which was expected to cost A$50m (R582m). In terms of the financing agreement, Glencore will supply $40m – potentially by November – to enable the Uppers project to proceed.As today’s announcement is for a term sheet, there is yet a due diligence process to be completed. “Tranche A enables the Company to move swiftly into first production and first cash flow from mining of the Uppers at Prieska,” said Lennox.The balance of the funds, about $160m to $210m, will be released in Tranche B for the development of PCZM’s Deeps project.If there is an early drawdown of Tranche B, it would allow Orion to start early works on the Deeps project as per the March feasibility study. “This will allow for smooth and continuous operations as we move from the Uppers towards full-scale operations from the Deeps,” said Lennox.The terms of the offtake are for 100% of bulk concentrate supply from Uppers project for five years, basically the life of mine from this section of the PCZM. Glencore will also take all of copper and zinc concentrates from the subsequent Deeps part of the mine, for a 10-year period. The concentrate will also be subject to market benchmark treatment and refining charges “as set by large producers and large smelters”.The post Orion clinches watershed $250m deal with Glencore appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com