Orion Signs US$200-250M Financing and Offtake Deal with Glencore for Prieska
Orion Minerals has taken a major step toward production by signing a non-binding term sheet with Glencore for up to US$250 million in financing and offtake agreements for its Prieska Copper Zinc Mine.
- Non-binding term sheet for US$200-250 million financing with Glencore
- Funding split into two tranches for Uppers and Deeps mining phases
- Offtake agreement covers 100% of concentrate production for 5-10 years
- Milestone-based drawdowns and market-rate interest with step-down post-production
- Targeting first production in late 2026 to early 2027
A Pivotal Financing Milestone
Orion Minerals Limited has announced a significant development in its journey to becoming a producing base metals company. Its subsidiary, Prieska Copper Zinc Mine (Pty) Ltd, has signed a non-binding term sheet with Glencore plc, one of the world’s largest diversified natural resource companies, for financing between US$200 million and US$250 million. This agreement also includes a concentrate offtake arrangement, marking a crucial step toward unlocking the value of the Prieska Copper Zinc Mine in South Africa’s Northern Cape.
Structured Financing to Support Phased Development
The financing is structured in two tranches – Tranche A of US$40 million will fund the construction and startup of the near-surface “Uppers” mining phase, while Tranche B, ranging from US$160 million to US$210 million, will support the deeper “Deeps” phase. Notably, up to US$50 million of Tranche B may be drawn early to commence preparatory works on the Deeps, ensuring a smooth transition between mining phases. Drawdowns will be milestone-based, with the first expected as early as November 2025.
Offtake Terms and Market Alignment
The offtake agreement commits Glencore to purchase 100% of the bulk concentrates from the Uppers for five years and 100% of copper and zinc concentrates from the Deeps for ten years. Pricing will be competitive and aligned with market benchmarks, including treatment and refining charges typical of large producers and smelters. Flexibility in delivery and options for advance sales provide Orion with operational and financial agility as it ramps up production.
Strategic Partnerships and Regional Impact
Orion’s Managing Director, Tony Lennox, described the deal as a watershed moment, highlighting Glencore’s role in enabling the company’s transition to production. The Industrial Development Corporation (IDC), an early funder of the project, also expressed strong support, emphasizing the socio-economic benefits for the Northern Cape region, including job creation. Glencore’s ongoing due diligence and commitment to expedite binding agreements underscore the seriousness of this partnership.
Looking Ahead
Orion aims to commence first production from the Uppers by late 2026 or early 2027, with aspirations to ramp up copper output to over 30,000 tonnes per annum and zinc to 65,000 tonnes per annum once both mining phases are fully operational. The financing and offtake deal with Glencore not only provides the capital needed but also secures a reliable market for the concentrates, reducing execution risk and enhancing the project’s commercial viability.
Bottom Line?
With Glencore’s backing, Orion is poised to transform Prieska from a promising project into a significant base metals producer.
Questions in the middle?
- Will Orion finalize binding agreements with Glencore within the projected 4-6 week timeframe?
- How will market fluctuations in copper and zinc prices affect the financing terms and offtake pricing?
- What are the risks and contingencies if milestone-based drawdowns are delayed or conditions unmet?
