Orion Minerals : Early Production Assessment for Prieska to be Fast Tracked

ASX/JSE RELEASE: 20 January 2022

Early Production Assessment for Prieska Copper-Zinc

Project to be Fast-Tracked

Investigations are under way into phasing the project development to bring forward first

concentrate production and evaluate remnant pillar mining potential

Investigations are now under way and due for completion by mid-2022 into an early- production scenario that re-schedules production from open pit mining to occur concurrent to the 33-month development phase of the Prieska Deeps Mine, rather than at the end of the Project life, as was planned in the 2020 Bankable Feasibility Study (BFS-20)1.

The focus of the investigations is on bringing forward production and phasing the implementation of the BFS-20 plan.

An underground drilling campaign, to upgrade mineral resources categories supporting the BFS-20 open pit plan and to evaluate the potential to extract the pillars left unmined for structural support during previous mining operations, is currently mobilising, with results of the campaign expected by June 2022.

Assessment of the option to phase the implementation of the BFS-20full-scale mine dewatering plan, so that a reduced-scale first phase to be commissioned during CY2022, as part of pre-construction project preparation works, is underway and is expected to be completed for investment decision by June 2022.

Orion's Managing Director and CEO, Errol Smart, commented:

"With prevailing positive macro-economic factors and the continued long-term positive outlook for both copper and zinc prices, the Orion executive team is re-evaluating the Prieska Project development schedule to assess the potential to bring forward production, even on a reduced scale at our flagship Prieska Copper-Zinc Project, which could present a major breakthrough for the Project.

"Mining of our open pit was planned in the BFS-20 to be mined over 19 months at the end of the mine life. The studies now underway are assessing the potential to mine the open pit first, concurrent with the 33-month dewatering and mining development schedule for the 200,000 tonnes per month Prieska Deeps Mine. This alternative scenario is looking increasingly like the route we should go down. Importantly, this early production scenario relies on the material assumptions for the mine plan already incorporated in the 2020 Bankable Feasibility Study.

"The BFS-20 also flagged potential for eventual extraction of remnant pillars left by historic mining. These pillars, which are recorded in mine survey records, have not yet been drill tested by Orion, however, a 3,500m underground drilling program is planned to test them shortly. Subsequent estimation of the tonnage and grade of mineralisation within the remnant pillars will allow for their

1 Refer ASX/JSE release 26 May 2020.
Orion Minerals Limited	www.orionminerals.com.au
Incorporated in the Commonwealth of Australia
Suite 617, 530 Little Collins Street Melbourne, Victoria 3000	ASX Code: ORN
ACN: 098 939 274	JSE Code: ORN
Ordinary shares on issue: 4,333m I Options on issue: 232m	ISIN: AU000000ORN1

inclusion in our Mineral Resources, which would then allow their consideration in our mine planning and reserve estimation.

"These pillars, which were left for geotechnical reasons, were not excluded from historical mining on grade or quality basis, they were left in a grid pattern purely as ground support.

"The geotechnical support pillars were historically necessary as no backfilling of mined voids was employed at that time, leaving large open stopes only supported by the pillars. Our engineering studies are indicating that many of these pillars would not be required for continued geotechnical stability of excavations if our open pit mine tailings are placed in the historical voids using cemented tailings filling as planned in our BFS-20. This remains to be confirmed by the detailed studies now underway. Using cemented open pit mine tailings to back-fill the historic voids also provides the opportunity for us to rethink the size and the high upfront capital cost of the tailings storage facility planned in the BFS-20.

"Our negotiations with multiple banks and financing institutions for the funding of the Prieska Deeps Mine as per the BFS-20 continue as a priority and are not affected by the engineering studies and financial assessments of an early production value enhancement scenarios, that are currently underway."

Orion Minerals Limited (ASX/JSE: ORN) (Orion or Company) is pleased to advise that it has commenced workstreams to assess the merits of phasing the development of its flagship Prieska Copper-Zinc Project in the Northern Cape Province of South Africa (Prieska Project), in a manner that brings forward the start of production and allows for dewatering of the underground workings to commence ahead of the final investment decision for the full-scale project construction as planned in the 2020 Bankable Feasibility Study (BFS-20) (refer ASX/JSE release 26 May 2020). The BFS-20 outlines the plan to re-establish the Prieska Copper Mine, which was previously operated as an underground mine between 1971 to 1991. During this time, mine records show, 46Mt were mined to produce 430kt of copper and 1.01Mt of zinc in concentrates2.

While funding discussions for the Prieska Project, based on the BFS-20 plan, are in progress with banks and finance institutions, investigations into further enhancing the technical and commercial aspects of the Project are being advanced.

Our strategy is to capitalise on the positive near-term base metals market and focus on investigating opportunities that have the potential to bring forward the start of production and revenue generation, potentially reducing the upfront external peak funding requirements of the project.

On this basis, the Company's senior management team has focused on the following plan and opportunity assessment (Early Production Scenario), comprising:

• re-planningfor upfront mining of the open pit (already included in the BFS-20 plan to occur at the end of the mine schedule);
• assessment of the remnant pillars remaining from historical mining operations for potential opportunistic early extraction; and
• preparation of a plan to commence the dewatering of the underground workings using a modular configuration, with the first modules being commissioned in CY2022, ahead of the scale up to the full-scale pumping rate proposed in the BFS-20 plan.

The scenario that is being investigated is based on and maintains the core elements and material assumptions of the Prieska Deeps BFS-20 plan. The work to fully evaluate and quantify this opportunity are expected to be completed by mid-2022.

2 Historical production records for the Prieska Copper Mine are sourced from WILSON, M.G.C. and ANHAEUSSER, C.R. (eds), 1998. The Mineral Resources of South Africa: Handbook, Council of Geoscience, 16, 740pp.

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A feasibility level study is underway to assess the merits of bringing forward the open pit mining.

Extraction of the shallow supergene sulphide ore by open pit mining is included in the BFS-20 plan3 (Figure 1). It is currently scheduled to be undertaken from Year 13 of the mine life, with tonnage milled stepping down from the 200,000 tonnes per month rate of the earlier underground mining to 100,000 tonnes per month, using only one of two installed mills for the open pit3 mining phase. The

1.12 Mt of supergene sulphide open pit ore, at an average grade of 1.9% Cu and 2.4% Zn, is planned to be mined and processed over a 2-year period in the BFS-20 (refer ASX/JSE release 26 May 2020).

The Early Production Scenario plan will assess the impact of re-scheduling mining of the open pit to the start of the Prieska Project mine plan to allow concentrate production with earlier commissioning of the first mill, while the second mill is being installed and other long-lead time capital projects for commencement of the Prieska Deeps Mine are completed.

In the BFS-20, the start of production is planned for month 33. Rescheduling of open pit mining to commence early aims to assess the impact of open pit production occurring concurrently to the long lead time elements of the Deeps Projects, such as mine dewatering, shaft refurbishment, underground infrastructure construction and stope preparation, which are all independent of open pit mining.

Figure 1: BFS-20 plan mine production profile, showing open pit ore contribution in the last 2 years and the initial 33-month construction period during which no production occurs. The re-scheduling of the open pit mining to commence with the start of the construction period is being assessed.

3 PCZM production targets were reported in ASX/JSE release of 26 May 2020. Orion confirms that all the material assumptions underpinning the production targets referred to in the initial public report continue to apply and have not materially changed.

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	160 000			5
	140 000			4
	120 000
	100 000			3
	80 000
	60 000			2
Tonnes			Grade%
	40 000			1
	20 000
	-			-
		Period (Months)
	Indicated	Inferred	Zn Grade	Cu Grade

Figure 2: BFS-20 open pit mining extraction schedule for the +105 Mineral Resource, now being investigated for early

extraction. The schedule shows it takes 19 months to build up enough run of mine feed stocks to commission ore processing at

100ktpm.

A small high-priority underground drilling program on the +105 open pit will commence shortly to provide sample density sufficient to upgrade the Mineral Resource classification in accordance with JORC Code (2012) reporting guidelines. This program, consisting of 770m of underground diamond drilling, will also supplement geotechnical information and confirm the survey plan location and widths of the voids. The program is scheduled to commence in February 2022 with completion anticipated by June 2022 and updated Mineral Resource and Ore Reserve estimates available shortly thereafter.

Figure 3: Oblique view showing the supergene sulphide deposit and the relative location of the voids created by previous mining that will need back-filling before open pit mining on the north-western strike extent of the Prieska Copper Zinc Mine (PCZM).

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Figure 4: Oblique view of planned open pit relative to the mining voids planned for back-filling prior to open pit mining.

Figure 5: Long section of the mineralisation above the 105m Level that is targeted for extraction by open pit mining, showing the relative location of the Indicated and Inferred Mineral Resources, as well as the planned drill-hole intersections required in order to upgrade supergene sulphide Inferred Mineral Resources.

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