AMN - SOUTH AFRICA: Prieska purchase boosts Orion

Significant progress made by Orion Minerals in completing the purchase of the large-scale Prieska zinc-copper mine in South Africa has contributed to equities research firm Independent Investment Research (IIR) lifting its valuation for the zinc-copper developer. A cornerstone investment by global fund Tembo Capital has supported the decision.

IIR analyst Mark Gordon says the de-risking of projects was another factor behind the decision to upgrade the original preferred valuation of 5.3c.

He says the Prieska deal was facilitated by Tembo, which also confirmed a cornerstone 12.5% investment in Orion via a $3 million placement. This investment helped fund the Prieska acquisition.

“Solid progress has been made on site activities at the infrastructure-rich Prieska project in recent months,” Mark Gordon wrote.

“Activities have included accessing both the decline and Hutchings shaft, resource definition drilling at the shallow, potentially open pittable +105 Target, and the commencement of drilling for the Deep Sulphide Target.”

The results will be used for initial mineral resource estimates, with one due for the +105 Target shortly and for the Deep Sulphide Target in 2018. “These will be used, along with other data, in the ongoing Pre-Feasibility Study,” he said.

IIR says it expects steady news-flow from Orion, with activities accelerating later in the year. Meanwhile, it says forecasts for the zinc market remain bullish for the medium term, with continuing tight supply conditions and increasing demand.

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