Our opinion on the current state of ORIONMIN(ORN)Orion Minerals (ORN) is an Australian exploration company listed on both the JSE (since September 2017) and the Australian Stock Exchange in Sydney. The company is focused on securing funding for its copper and zinc mine in Prieska, South Africa. The Prieska mine was originally operated by Anglovaal, which ceased operations in 1990 after extracting more than 1 million tons of zinc and 430,000 tons of copper concentrate over 20 years. A significant challenge for Orion is the flooding of the mine, which will require the removal of nearly 9 million cubic meters of water from the existing structure before production can commence, which is anticipated to begin in 2024.
Orion aims to exploit the Prieska resource using a mechanized approach with minimal labor. Vedanta Resources, which operates the nearby Gamsberg mine, is considering building a smelter that could serve all the mines in the area, including Orion's resources and those from Namibia. However, mining exploration, especially for a penny stock like Orion, is inherently risky.
On 8th September 2022, Orion announced that it had secured R34.5 million from the Industrial Development Corporation (IDC) for a 43.75% stake in its new Okiep copper mining company. On 21st October 2022, the company further announced a R250 million line of credit from the IDC.
In its results for the six months ending 30th June 2023, Orion reported a loss of A$15.2 million, unchanged from the previous period, with a headline loss per share of 31c, slightly improved from a 33c loss in the prior period. The company highlighted that the IDC had become a strategic funding partner for both the Okiep Copper Project and the Prieska Copper Zinc Mine, with pre-development funding agreements totaling ZAR 284.58 million.
In a report for the quarter ending 30th September 2023, Orion updated its Prieska Copper Zinc Mine (PCZM) resource, increasing it to 2.3Mt at 1.7% Cu and 1.6% Zn, including an Indicated Resource of 1.9Mt at 1.82% Cu and 1.70% Zn. This brought the total PCZM Mineral Resource to 31Mt grading 1.2% Cu and 3.6% Zn. As of 30th September 2023, the company had $15.74 million in cash.
On 17th April 2024, Orion confirmed the fulfillment of the majority of outstanding conditions for the acquisition of the Okiep mineral rights, first announced on 2nd February 2021. Shortly after, on 22nd April 2024, Orion reported a "Spectacular High-Grade Copper Intercept at Okiep Copper Project," with results of 49m at 4.89% Cu, including 10.23m at 12.47% Cu, which caused the share price to jump from 19c to 24c. Investors are advised to approach this volatile penny stock with caution and maintain a strict stop-loss strategy.
Further strong assay results were reported on 24th June 2024, including 9.27m at 3.01% Cu and 15m at 4.80% Cu within a broader zone averaging 1.57% Cu at the Flat Mine East within the Okiep Copper Project. An update for the quarter ending 30th June 2024 revealed that Orion had completed a capital raising of A$7.7 million (~ZAR92.3 million) in July 2024, with funds allocated primarily to progress the development of the Prieska Copper Zinc Mine and advance permitting and infrastructure development.
On 25th June 2024, the company requested an immediate halt to trading in its shares pending an announcement, and on 28th August 2024, Orion announced that it had been granted a key water use license for the Okiep copper mine.
