JOHANNESBURG (miningweekly.com) – With the benefit of attracting BHP Xplor into our organisation, we’re looking to longer-term exploration potential in the Northern Cape, Orion Minerals CEO Tony Lennox told Mining Weekly in a Zoom Interview on Tuesday. (Also watch attached Creamer Media video.)

Following Orion’s selection from the very high number of 780 Xplor programme applicants, Lennox spoke of “launching off into 2026 with a renewed vigour around exploration”.

“It's a very pleasing outcome,” added Lennox about Orion making it through to the final 11 BHP Xplor parties.

Moreover, in the week before last, the Johannesburg- and Sydney-listed Orion also reached a binding agreement with Glencore.

“We've had a very good start to the year, particularly with these two prime announcements. As the market knows, we've been working hard to get the Glencore prepayment agreement in place, and we've done that. There are a few conditions precedent that we’re working through, but we’re confident we’ll have those largely concluded by the end of March,“ said Lennox, a former leading light of Palabora Mining Company, which operates a copper smelter and copper refinery complex in South Africa's Limpopo province.

Mining Weekly: When we spoke to you last year, you were saying that “Orion’s now very clear on transitioning from being a developer/explorer to being a producer", and you added that Mining Weekly could “rest assured” that Orion would be producing concentrate from Prieska by the end of this year.

Lennox: Correct, I did, and the market announcement Monday last week details the facts and figures of the Glencore agreement, but we had a delay during the course of last year in reaching that agreement, and I'm sure the market understands that there was a lot of discussion in the market about Glencore late last year, even this year, and so we’ve had to defer that by three months. In our announcement, we said that previously we were looking at Christmas this year, but now we've said we’ll be producing concentrate at the end of the first quarter of 2027.

Is this trading agreement largely on Glencore taking bulks, copper and zinc concentrates from Prieska into the market?

It is. We start with the bulk concentrate out of the Uppers, then we move into the copper and zinc concentrate for the Deeps. The Uppers is a smaller, getting-match-fit-ready part of the operations. The real prize is the Deeps. We have a very clear line of sight into the Uppers and into the Deeps and, pleasingly, Glencore will be marketing our concentrate off into the future.

When I chatted to BHP Xplor, they really loved everything about Orion and they said what’s very interesting is the possibility of deep copper-centric metal systems emerging in South Africa's Northern Cape.

Yes, that’s the simple detail around BHP Xplor. South Africa has, to my knowledge, been explored extensively. The issue with the Northern Cape is undercover exploration - the Kalahari and those type of deposits. Pleasingly, Orion's deposits are at surface. They are not undercover and the large amount of data we have on the Northern Cape, and in particular, our thinking, our IP, around what that region looks like, is, to my mind, what attracted BHP Xplor. They think it’s a very prospective region, and Orion showed them a very clear, well-thought-out, professional understanding about how to explore in the Northern Cape.

You've executed the binding prepayment agreement with a wholly owned subsidiary of Glencore for a $250-million prepayment facility, and it's linked to all these sales of concentrates. What subsidiary is this and give us a little bit more insight into that.

A lot of it is in confidence, but we now have a relationship with Glencore that provides us with substantial funding, US$250-million, and that comes in two tranches. There's an initial tranche of US$40-million, which allows us to start execution of the Uppers. The second tranche, which is US$210-million, comes in two segments. There's an earlier US$50-million that allows us to address long-lead items for the Deeps and there's a subsequent US$160-million that comes a little later, when we're in the main activities of executing the Deeps and bringing it into production. So, that’s the prepayment, and it is a prepayment. We have to repay that over time, but it’s linked also to the offtake agreements with Glencore for our concentrates. Those offtake agreements are very much market norm. They’re not particularly out on the limits of what the markets expect and what is normally traded in those agreements with the traders, so we're very pleased with them, we're very happy, very comfortable with Glencore, and we look forward to a number of years of long-term life with them.

Once they get those bulk, copper and zinc concentrates, it's out of your hands, so you don't really know where this is going to end up, do you?

No, Glencore market it on the open market. They have excellent access to smelters around the planet, and they’ll be looking to position it easily and readily in the market for us.

And there’s no chance of ever doing smelting here or processing it further?

I understand smelting. In a previous life, I used to run the Palabora Mining Company, so I understand that dimension of African industry. I think for Orion, our focus is being an excellent miner and producer of concentrate. That is where we really excel, and that is our whole focus in life. And when I talk about the focus, it is about bringing Prieska into operation. It is then addressing Okiep and bringing that into operation. With the benefit of attracting BHP Xplor into our organisation, we look to a longer-term exploration potential in the Northern Cape.

Swinging back to the Prieska project, if I went in there now, what would I find, what would it look like?

You would see our execution team making great progress on preparedness for execution. When the funds from Glencore start to flow, that will then allow our team to start turning soil. Shovel-ready is a good description for us at this point in time. We have a team on site, I can assure you, today addressing reporting, safety requirements and making sure that the key dimensions of the Uppers are going to come into production by the end of Q1 of next year.

Finally, Tony, what’s the big takeaway?

The big takeaway is Orion is very pleased to have been able to partner with Glencore for pre-production funding - the US$250-million is a large number - and then enter into the offtake agreement. The next thing which has come along quite quickly is BHP Xplor finding Orion a valued partner to enter with to explore the Northern Cape and perhaps further in countries north of South Africa.