Orion’s proposed copper acquisition adds ‘further significant upside’ to base case 6.3c-9c valuation, says analyst

A highly regarded South African-based independent investment analyst has provided an upbeat assessment of Orion Minerals’ (ASX: ORN) recently announced option to acquire a dominant ownership position in the highly prospective Okiep Copper Complex in South
19th February 2021
Resources Rising Stars

A highly regarded South African-based independent investment analyst has provided an upbeat assessment of Orion Minerals’ (ASX: ORN) recently announced option to acquire a dominant ownership position in the highly prospective Okiep Copper Complex in South Africa’s Northern Cape Province.

According to investment analyst and portfolio manager Simon Hudson-Peacock, the proposed deal provides “further significant upside” to his existing base case valuation range for Orion Minerals of 6.3-9.9c per share.

Orion shares have surged recently on the back of the deal, and a more recently announced maiden JORC Resource of 8.9Mt at 1.37% Cu for three deposits, but are still trading at ~3.9-4.0c, well below this valuation range.

He says the deal represents a “cheap option” over a historic copper producing complex, with the project offering low capital cost and early access potential due to the extensive existing infrastructure at the project.

The Company has further enhanced the transaction with a deal to acquire a very large +60-year database, positioning it to fast-track its resource evaluation and exploration activities.

“Orion has reported a maiden JORC compliant resource of 8.9Mt at 1.37% Cu,” Hudson-Peacock wrote.

“This follows a due diligence assessment of the exploration data accessed last week following the announcement by Orion of its option to acquire the copper exploration assets in the Northern Cape Province, collectively known as the Okiep Copper Complex.

“In last week’s announcement, Orion revealed that it had secured a 6-month option to review the existing exploration data and to initiate any further exploration activity deemed necessary to prove up a JORC compliant baseline Resource of 8.9Mt at OCC,” he said.

“Orion’s management team had hoped to be able to declare this baseline resource by the end of March but the integrity of the historical data has been excellent and it would appear that no additional exploration effort was required to verify the results.”

Hudson-Peacock says there are significant management synergies available between Orion’s existing Prieska Copper-Zinc Project, also in the Northern Cape, and the new OCC acquisition.

He says the deal has the potential to transform the Company into a “multi-project company” with a larger capital base, with the new OCC assets also offering significant exploration upside.

To view a full copy of the Simon Hudson-Peacock’s new research report on Orion Minerals, click here

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