PERTH (miningweekly.com) – Sydney- and Johannesburg-listed Orion Minerals has welcomed a new black economic empowerment (BEE) member to its BEE partner company Prieska Resources.

Safika Resources, chaired by Saki Macozoma, has taken a 44.72% stake in Prieska Resources, with Black Star Minerals holding a 17.31% interest and Kolobe Nala Investment a 37.97% interest.

Safika is predominantly invested in manganese through an investment and the management of Ntsimbintle Holdings, which has a 37% stake in Tshipi e Ntle Manganese Mining, which is in partnership with ASX-listed Jupiter Mines at its Tshipi Borwa manganese project.

Macozoma, 62, is a former deputy chairperson of Standard Bank and former MD of South Africa's State-owned rail company Transnet.

Orion MD and CEO Errol Smart said on Friday that the company was delighted to welcome Safika as a partner, with the BEE company representing an ideal business partner in the Northern Cape.

“As a majority black-owned business that founded an extremely successful mining operation by taking it from a grassroots beginnings by securing undeveloped prospecting rights, to now holding one of the largest interests in, and management of, one of South Africa’s most successful mining ventures and one of the world’s top manganese producers, is a tremendous badge of success.

“Safika’s success demonstrates the potential for successful exploration and mining in the Northern Cape,” Smart said.

Prieska Resources will ultimately hold a 20% stake in Orion’s Prieska copper/zinc project.

The Prieska bankable feasibility study estimated that the 2.4-million-tonne-a-year operation would require a capital investment of A$378-million, with the ten-year foundation phase expected to produce 189 000 t of copper and 580 000 t of zinc.

As reported by Mining Weekly Online earlier this year, Orion formerly traded at an eighth of an Australian cent a share. It had a market capitalisation of $4-milllion and set out to find something that could be turned into a mine.

The good news is that the company found that opportunity in South Africa, and its share price has since had a 4.5-times value uplift.

Smart recalls that the opportunity came in the form of the company encountering Nelson Mosiapoa and his partners, who had put together a company called Repli.

Repli had acquired the prospecting rights around the old Prieska copper mine, which the former South African mining major AngloVaal had closed in 1991 and had also bought the original company that owned the defunct mine.

This company had spent quite a few years looking at tailings retreatment and in-situ leaching possibilities but was struggling to find money in South Africa, where junior mining generally battles to make headway.

When Smart was shown the Prieska opportunity, he realised that it had huge potential.

The upshot was that Mosiapoa’s partners sold out to Orion and Mosiapoa stayed in Repli to serve as Orion's BEE partner and doing a great job to ensure that the Australian company obtained government permitting and developed strong community relations.

Mosiapoa exchanged his shares at project level for listed Orion shares and the group of BEE investors brought in ahead of Friday's Safika announcement were a mix of seasoned executives, rising star entrepreneurs and owners of engineering expertise that can help to contain construction costs.

In that way, Orion ended up clinching a partnership with new BEE company Prieska Resources, which includes Kimberley legal firm accountant Sharon Matthews and Prieska-born Jowell Tobias, who has extensive project finance experience. Their company has large engineering and steel fabrication workshops, which are being positioned for involvement in the Prieska project.

These BEE partners invested at a premium to market, which put them on a par with international investors at listed company level, to which the original founding BEE partnership has also been elevated.

This coincided with a move to strengthen the Orion board, involving the appointment of former Anglo American executive Godfrey Gomwe and former BHP Billiton executive Tom Borman as nonexecutive directors.