Orion Minerals : Mining Right granted for Flat Mines Area of Okiep Project

ASX/JSE RELEASE: 29 AUGUST 2022

Mining Right granted for Flat Mines Area of Okiep Copper

Project, Northern Cape, South Africa

Grant of the Mining Right by the South African Department of Mineral Resources and Energy marks a major milestone in the development of the Okiep Copper Project.

Mining Right enables confirmation drilling and metallurgical sampling, required for completion of the advanced stage bankable feasibility study.

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

"The grant of the SAFTA mining right is a major step forward for Orion and our objective of early production of copper and other Future Facing metals, while continuing to expand our Mineral Resources and beneficiation capacity in the Northern Cape, South Africa.

Our bankable feasibility study on the granted mining right area is at an advanced stage and can now be completed with access to the property for bulk sampling and final confirmation drilling purposes."

Orion Minerals Limited (ASX/JSE: ORN) (Orion or the Company) is pleased to announce that a Mining Right has been granted over the key Flat Mines area, that lies at the core of the Okiep Copper Project (OCP) (Figure 1). The Mining Right granted, to Southern African Tantalum Mining (Pty) Ltd (SAFTA) under the Mineral and Petroleum Resources Development Act, is valid for an initial period of 15 years and can be renewed on application for a further period which may not exceed 30 years.

Figure 1: Location of the OCP mineral rights and SAFTA Mining Right (MR).

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: 4,750m I Options on issue: 348m	ISIN: AU000000ORN1

Orion has completed a positive Scoping Study (refer ASX / JSE release 3 May 2021; summary in Appendix 1) for the Flat Mines SAFTA area, which demonstrated the economic merit of developing a foundation phase mining operation at the SAFTA properties. The Scoping Study supported a moderate scale start up mining operation on known, drilled copper deposits. Orion's aspiration, with project partner the Industrial Development Corporation (IDC) is an early re-establishment of mining operations on the brownfields site, while conducting the required work and engineering studies to support the longer term goal of achieving production at a similar scale to past owners Newmont and later Goldfields under the Okiep Copper Company (Figure 2).

Figure 2: Okiep Copper Company production from 1940 under past ownership.

The grant of the Mining Right follows Orion's announcement on 2 August 2021 that it had exercised its restructured option (OCP Option) to acquire a controlling interest in the majority of the properties that form the OCP. The OCP Option was granted to Orion by each of SAFTA, Nababeep Copper Company (Pty) Ltd (NCC) and Bulletrap Copper Co (Pty) Ltd (BCC). These entities hold the majority of the large, historical mines in this significant copper- producing district, which has produced more than 2Mt of copper metal over a 150-year period to 2003.

Orion announced on 16 September 2021, that the IDC had signalled its intention to remain a key strategic partner in the SAFTA project and work with Orion in the development of the New Okiep Mining Company (NOM), that will acquire, the assets owned by SAFTA, which is currently 43% owned by the IDC. The shareholding in NOM will, in the future, include Orion as majority owner with 56% holding, the IDC as key strategic partner and historically disadvantaged empowerment partners in compliance with the requirements of the Mining Charter 2018. This includes a 5% participation by each of the host community and employee trusts.

The OCP is a significant growth opportunity for Orion, with the potential to become a second base metal production hub for the Company in the Northern Cape, alongside its flagship Prieska Copper-Zinc Project, located 450km east of the OCP.

Next Steps

The grant of the Mining Right represents a major step towards the development of the OCP and clears the way for final engineering studies, Mineral Resource upgrade, drilling and bulk sampling for metallurgical optimisation.

Feasibility studies upgrading the 2021 scoping feasibility study (refer ASX / JSE release 2 August 2021) for the OCP are well advanced, with targeted completion early 2023.

About the IDC

The Industrial Development Corporation (IDC) of South Africa Limited was established in 1940 by the Industrial Development Corporation Act, 22 of 1940 and is wholly owned by the South African government. IDC priorities are aligned with the national policy direction set out in the National Development Plan (NDP) and industry masterplans. The IDC mandate is to maximise development impact through job-rich industrialisation while contributing to an inclusive economy.

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For and on behalf of the Board.

Errol Smart

Managing Director and CEO

ENQUIRIES

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Disclaimer

This release may include forward-looking statements. Such forward-looking statements may include, among other things, statements regarding targets, estimates and assumptions in respect of metal production and prices, operating costs and results, capital expenditures, mineral reserves and mineral resources and anticipated grades and recovery rates, and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions. These forward-looking statements are based on management's expectations and beliefs concerning future events. Forward-looking statements inherently involve subjective judgement and analysis and are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Orion. Actual results and developments may vary materially from those expressed in this release. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Orion makes no undertaking to subsequently update or revise the forward-looking statements made in this release to reflect events or circumstances after the date of this release. All information in respect of Exploration Results and other technical information should be read in conjunction with Competent Person Statements in this release (where applicable). To the maximum extent permitted by law, Orion and any of its related bodies corporate and affiliates and their officers, employees, agents, associates and advisers:

• disclaim any obligations or undertaking to release any updates or revisions to the information to reflect any change in expectations or assumptions;
• do not make any representation or warranty, express or implied, as to the accuracy, reliability or completeness of the information in this release, or likelihood of fulfilment of any forward-looking statement or any event or results expressed or implied in any forward-looking statement; and
• disclaim all responsibility and liability for these forward-looking statements (including, without limitation, liability for negligence).

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Appendix 1

OCP - Flat Mines Pilot Project Scoping Study

Executive Dashboard

Price and Forex Assumptions

Unit

Value

Financial Performance

Unit

Value

Unit

Value

Metal price - Cu

USD/t

7,593

NPV (pre-tax) approximated @10% discount rate

ZAR (M)

1,896

AUD (M)

170

Metal price - Au

USD/oz

1,889

NPV (post-tax) approximated @10% discount rate

ZAR (M)

1,267

AUD (M)

114

Metal price - Ag

USD/oz

24

IRR (pre-tax)

%

44%

Exchange rate

ZAR : USD

17.2 :1

IRR (post-tax)

%

37%

Exchange rate

ZAR : AUD

11 .1: 1

Payback from first production

years

3.25 years

Production Metrics

Unit

Value

Undiscounted free cash flow (pre-tax)

ZAR (M)

4,607

AUD (M)

413

Life of Mine (Proof-of-Concept Phase)

Years

11.8

Peak funding

ZAR (M)

643

AUD (M)

58

Treatment plant capacity

ktpa

780

Project Cost Metrics

Unit

Value

Unit

Value

Proof-of-Concept Phase tonnage - RoM

kt

9,011

Average cash operating unit cost (C1)

ZAR/t

781

AUD/t

70

Proof-of-Concept Phase tonnage - RoM U/G

kt

7,479

All-in-sustaining cost per unit RoM t

ZAR/t

873

AUD/t

78

Proof-of-Concept Phase tonnage - RoM O-Pit

kt

1,531

All-in-sustaining cost per unit Cu t sold

USD/t Cu

4,478

AUD/t Cu

6,904

RoM Plant Feed Grade - Cu - U/G

%

1.29%

Price received (net of NSR) - Cu

USD/t Cu

7,441

AUD/t Cu

11,473

RoM Plant Feed Grade - Cu - O-Pit

%

1.28%

All-in-sustaining margin

%

40%

RoM Plant Feed Grade - Au

g/t conc

2.2

Operating breakeven grade - Cu

%

0.83%

RoM Plant Feed Grade - Ag

g/t conc

34

Project Cash Flows

Unit

Value

Unit

Value

Overall Plant Recovery - Cu

%

87.4%

LoM net revenue

ZAR (M)

12,712

AUD (M)

1,142

Concentrate tonnage - Cu

kt

386

LoM operating costs (plus State Royalty)

ZAR (M)

7,320

AUD (M)

657

Concentrate grade - Cu

%

25.8%

Project Start-up Capital Expenditure

ZAR (M)

595

AUD (M)

53

NSR as % of metal price - Cu

%

96.9%

Sustaining Capital Expenditure

ZAR (M)

188

AUD (M)

17

Metal sold (in concentrates) - Cu

Tonnes

102,329

Income Tax

ZAR (M)

1,368

AUD (M)

123

Total Cu Sales

Tonnes

386,787

Cash Flow After Tax

ZAR (M)

3,241

AUD (M)

291

Level of Accuracy of Financial Model ± 25%,

LoM = Life of Mine, NSR = Net Smelter Return, NPV = Net Present Value, IRR = Internal Rate of Return

There is a low level of geological confidence associated with Inferred Mineral Resources and therefore there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the Production Target or financial forecast information referred to in this Study will be realised. Source: ORN Okiep Financial Model revision 4.0

Table: Key assumptions and project performance parameters for the Okiep Copper Project (Flat Mines Project area) (numbers may contain

apparent rounding errors).

Refer ASX/JSE release 3 May 2021.

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