Base Metals: Orion wants to speed up South African copper-zinc mine
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Processing facilities are typically items that have delivery times long enough to affect the overall time between giving a mine development the green light and actually completing the work.
Orion Minerals (ASX:ORN) is looking to short-cut this wait time by signing options over a pair of semi-autogenous grinding (SAG) mills that are suitable to process ore from its Prieska copper-zinc project in South Africa.
These new mills are available immediately at a significant discount to similar mills which would only be available from manufacturers on long order.
The move comes after the company completed value engineering studies on the processing plant design and layouts for the project.
Orion says using these SAG mills will allow significant operational flexibility and facilitate the processing of Prieska ore at a rate of up to 20 per cent above design throughput, which allows capacity for future expansion.
It will also simplify plant layout and operation, which will reduce upfront capital expenditure by $15m and estimated operating costs by about 5 per cent.
This will be achieved by removing the need for multi-stage crushing and screening of rock ahead of milling.
Prieska is expected to be a 2.4-million-tonne-per-annum underground and open pit mining operation that will generate undiscounted free cashflows of $1.1bn pre-tax.
Project net present value (NPV) has been estimated at $574m along with a post-tax internal rate of return (IRR) of 33 per cent.
The higher the IRR and NPV, the more profitable a proposed mining operation is estimated to be.
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