Orion Minerals Limited · ASX:ORN
Orion Minerals — Investor Presentation (May 2020)
31 slides from Orion Minerals's investor presentation, May 26, 2020
Slide 1: Prieska BFS Update: A Low-Cost Base Metals Mine In Waiting
Prieska BFS Update: A Low-Cost Base Metals Mine In Waiting Plus, near-term exposure to high-impact nickel exploration in Western Australia’s Fraser Range Errol Smart, Managing Director and CEO | Investor Presentation – May 2020 ASX/JSE: PAGEORN
Slide 2: Disclaimer
DISCLAIMER This presentation contains summary information about Orion from estimated or anticipated events or results reflected underpinning the estimates in the relevant Orion ASX releases Minerals Ltd and its subsidiaries (Orion or Company) and their in such forward-looking statements; and (as ref
Slide 3: Orion Minerals Investment Snapshot
ORION MINERALS INVESTMENT SNAPSHOT • Flagship Prieska Copper-Zinc Project – Northern Cape Province, South Africa • Updated BFS completed following successful optimisation & value engineering • Substantial increase in production, mine life and cash flow achieved: • 43% increase in cash flow to A$1.6B
Slide 4: Orion Minerals Corporate Summary
ORION MINERALS CORPORATE SUMMARY • Primary listing on the ASX • Secondary listing on Main Board of the Johannesburg Stock Exchange Capital structure summary Significant shareholders % Shares on issue 1 2,900M Tembo Capital 24.0 Options on issue 243M Wyllie Group 5.5 Cash on hand 2, 5 $1.2M United Su
Slide 5: Prieska Near-Term, Low-Cost Base Metals Mine
PRIESKA NEAR-TERM, LOW-COST BASE METALS MINE THE OREBODY • Globally significant VMS Resource: 30.49Mt @ 1.2% Cu, 3.7% Zn • Increased Mineral Reserve: 14.5Mt @ 1.1% Cu and 3.2% Zn FOUNDATION PHASE (INCREASED TO 12 YEARS) BFS-20 OUTCOMES • Initial 12-year, 2.4Mtpa operation ( 2 years), targeting 22ktp
Slide 6: Brownfields Site 21st Century Design
BROWNFIELDS SITE 21ST CENTURY DESIGN Improved economics, operational efficiencies and enhanced sustainability credentials are amongst the many significant benefits to be delivered from optimisation and engineering as part of the updated Prieksa BFS-20. PAGE 6
Slide 7: Pathway Targeting 2024 Production
PATHWAY TARGETING 2024 PRODUCTION EARLY WORKS CONSTRUCTION PHASE PRODUCTION 1 2 3 4 5 6 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 BULK POWER AND WATER SUPPLY Temporary Power Infrastructure - 15MVA 1 1 1 1 1 1 1 1 1 1 BFS-19 (Diesel Power) 2
Slide 8: Continuing Optimisation Delivering Enhanced Value
CONTINUING OPTIMISATION DELIVERING ENHANCED VALUE Engineering and detailed costing at BFS accuracy (15%) completed May 2020 • Metallurgical plant design • Now includes SAG milling • Removes secondary crushing, screening & rock conveyors • Capital & OPEX savings achieved Project • De-watering to incl
Slide 9: Low-Cost High-Margin Operation
LOW-COST HIGH-MARGIN OPERATION Contributors to Low OPEX: Project Cost Metrics Unit Value Unit Value • Brownfields, infrastructure-rich site Average cash operating unit cost (C1) ZAR/t 807 AUD/t 73 • Favourable rock & environmental conditions All-in-sustaining cost per unit ROM t ZAR/t 972 AUD/t 88 •
Slide 10: Large, Simple Orebody Low-Cost Mining
LARGE, SIMPLE OREBODY LOW-COST MINING Footwall drive Longhaul stoping sequence PAGE 10
Slide 11: Improved Mining Schedule "Best First"
IMPROVED MINING SCHEDULE “BEST FIRST” LOM Cu Production LOM Zn Production Includes Open pit Includes Open pit Highest grades with best metallurgical recoveries mined early in the Underground Cu Production Underground Zn Production project life PAGE 11
Slide 12: Prieska Mine of the Future
PRIESKA MINE OF THE FUTURE Implementing a modern operating philosophy (4IR enabled) can contribute to achieving quantum changes in key output parameters that are traditionally slow to improve or have regressed in the local mining industry, including: • Safety and health improvements • Improved envir
Slide 13: Improved Project Economics + Strong ESG
IMPROVED PROJECT ECONOMICS + STRONG ESG Environmental, Social and Governance (ESG) responsibility embedded in our mine plan • Investing in district water management/security • Benefiting the community • Supporting a water management business (enterprise development) • Focus on low carbon footprint •
Slide 14: Social Responsibility Led Framework
SOCIAL RESPONSIBILITY LED FRAMEWORK PAGE 14
Slide 15: Key Social Impacts of the Proposed Prieska Mine
KEY SOCIAL IMPACTS OF THE PROPOSED PRIESKA MINE EMPLOYMENT CREATION • Estimated that 840 people (operational Phase) will be employed • Empirical multiplier effect potentially creates 2,500 associated jobs INCREASE IN GROSS DOMESTIC PRODUCT • District GDP increase expected of 20.3% at optimal mining
Slide 16: Project Significant to South Africa
PROJECT SIGNIFICANT TO SOUTH AFRICA STRONG GOVERNMENT SUPPORT South African State President Cyril Ramaphosa congratulates Orion Minerals Ltd CEO Errol Smart on progress at Prieska State President’s Investment Conference – 6 November 2019 PAGE 16
Slide 17: BEE: Proactively Mining Charter Compliant
BEE: PROACTIVELY MINING CHARTER COMPLIANT BEE New BEE Entrepreneurs Orion Entrepreneurs 10.7% 100% Safika Black Star Kolobe Nala Resources Minerals Investment Prieska Prieska Northern projects Community Prieska Employees Trust Resources Orion Exploration 1 (PR application pending) Trust 70% Masiqham
Slide 18: Project Financing Overview
PROJECT FINANCING OVERVIEW Majority Senior Secured Project Debt Finance • Proposals received from seven institutions • includes two specialist development finance institutions • Discussions progressing • To be finalised post optimisation – revised project cash flow Subordinated debt and structured f
Slide 19: Exploration Upside Under-Explored Belt
EXPLORATION UPSIDE UNDER-EXPLORED BELT Multiple Cu-Zn VMS and Ni-Cu intrusive targets within Orion’s mineral rights PAGE 19
Slide 20: Fraser Range IGO:ORN JV
FRASER RANGE IGO:ORN JV Pike Project • ORN 30% free-carried by IGO through to first pre-feasibility study • 2019 diamond drilling intersected Ni-Cu sulphides in ultramafic intrusive and same geological features as Mawson • Significant off-hole conductor to be tested • Preparing for follow-up diamond
Slide 21: Summary Key Investment Takeaways
SUMMARY KEY INVESTMENT TAKEAWAYS ✓ Advanced, high-quality base metals asset – ready for development ✓ Outstanding results from updated BFS, improving significantly on BFS-19 ✓ One of the few long-life, development-ready base metal assets globally: ✓ Strong strategic position in the South African min
Slide 22: Appendices
APPENDICES Prieska Mine Cross Section Prieska Mine Long Section PAGE 22
Slide 23: Prieska Project BFS 2020: Executive Dashboard
PRIESKA PROJECT BFS 2020 : EXECUTIVE DASHBOARD Key assumptions and Project Performance Parameters Price and FX Assumptions Unit Value Financial Performance Unit Value Unit Value NPV % Change -15% -10% -5% 0% +5% +10% +15% 0% Metal price - Cu USD/t 6,680 NPV (pre-tax) @8% discount rate ZAR (M) 8,566
Slide 24: Comparative Summary Capex & Opex
COMPARATIVE SUMMARY CAPEX & OPEX BFS-20 BFS-19 Variance Establishment Expenditure BFS-20 BFS-19 Variance Operating Costs AUD/RoM t AUD/RoM t AUD/RoM t % Grouped Elements AUD (millions) AUD (millions) AUD (millions) % Var Mining 38 48 -11 -22% Power and Water Supply 8 9 -1 -8% Processing 15 16 -1 -8%
Slide 25: Copper Market: Bruised by COVID-19, But Primed for the Rebound
COPPER MARKET: BRUISED BY COVID-19, BUT PRIMED FOR THE REBOUND • Significant COVID-induced price downturn in CY2020 – mines shut as commodity prices slide down the global cost curve, further closures likely • Limited investment in new supply, with very few projects set to come on-stream over the nex
Slide 26: Copper Market: Future Growth Underpinned by Green Energy
COPPER MARKET: FUTURE GROWTH UNDERPINNED BY GREEN ENERGY • Electric vehicles (EV) use around 80kg of copper, compared to around 22kg in internal combustion engines (ABARE) • Global copper demand from EVs expected to rise from 417,000t in 2020 to 1.1Mt in 2025 and almost Source: CRU 2.5Mt in 2030 (CR
Slide 27: Zinc Market: Huge Supply Disruption, Looming Deficit
ZINC MARKET: HUGE SUPPLY DISRUPTION, LOOMING DEFICIT • Zinc has also moved deep into the cost curve - large proportion of current Ore Reserves (operating mines) are uneconomic • Major supply cuts to current operations and lack of investment in new supply – market will inevitably tighten • Zinc expec
Slide 28: Metal Price Outlook S&P Global (April 2020)
METAL PRICE OUTLOOK S&P GLOBAL (APRIL 2020) The charts above show the metal price forecasts in real and nominal terms. The real values were obtained by dividing S&P Global’s April 2020 nominal price forecast by their cumulative U.S. CPI forecasts. An increasing price trend is expected in both real a
Slide 29: Prieska Mineral Resource
PRIESKA MINERAL RESOURCE Combined Prieska Project Mineral Resource for Repli + Vardocube Tenements (Effective Date: 11 January 2019) Cu Cu Zn Zn Mineral Resource Classification Tonnes (metal tonnes) (%) (metal tonnes) (%) Deep Sulphide Indicated 18,507,000 217,000 1.17 667,000 3.60 Resource Inferred
Slide 30: Prieska Ore Reserve
PRIESKA ORE RESERVE Prieska Project Ore Reserves Estimate (Effective Date: 30 April 2020) Cu Zn Cu Equivalent Ore Reserve Deposit Tonnage (Mt) Metal Tonnes Grade Metal Tonnes Grade Metal Tonnes Grade Classification (kt) (%) (kt) (%) (kt) (%) Deep Sulphide Probable 14.0 146 1.0 446 3.2 248 1.8 + 105
Slide 31: For further information, contact: Orion Minerals Limited
For further information, contact: Orion Minerals Limited Suite 617, 530 Little Collins Street Melbourne Vic 3000 Australia ASX/JSE: ORN Phone: +61 (0)3 8080 7170 Email: info@orionminerals.com.au Website: www.orionminerals.com.au PAGE