Orion Minerals NL : BFS Consultants Appointed and Massive Sulphides Intersected (11/07/17)

ASX Announcement / Media Release

11 July 2017

BFS consultants appointed for Prieska, second Deep Sulphide hole intersects massive sulphides & extends mineralisation

ASX Code: ORN

Issued Capital: Ordinary Shares: 917M Options: 217M

Directors: Denis Waddell

Chairman

Errol Smart

Managing Director, CEO

Bill Oliver

Technical Director

Alexander Haller

Non-Executive Director

Management: Martin Bouwmeester

CFO & Company Secretary

Suite 617

530 Little Collins Street Melbourne VIC 3000

ABN 76 098 939 274

T: [phone]

E: [e-mail]

Highlights:

• DRA Projects SA Pty Ltd and ABS Africa Pty Ltd have been appointed as the lead consultants for the Prieska Zinc-Copper Project Bankable Feasibility Study and Environmental Impact Assessment studies;
• DRA will manage the BFS and ensure all work streams are completed in a complementary and timely manner;
• ABS Africa will manage the EIA studies associated with the BFS;
• The BFS will incorporate both open pit (+105) and underground (Deep Sulphide) developments utilising both the substantial mine/drill database as well as new drilling to confirm and increase knowledge of the mineralised zone, mine design and process flowsheet;
• Second diamond drill hole to test the along strike continuation of mineralisation at the Deep Sulphide Target has successfully intersected 15.15 metres of massive sulphides;
• Intersection is ~100m along strike from OCOD048 and importantly ~100m from any historical intersection and has the potential to support a significant extension to previously identified mineralisation;
• The successful intersection in this north-western area is very encouraging and provides a high level of confidence in Orion's geological interpretation and modelling of the Deep Sulphide Target; and
• Drilling continues with core drilling currently underway on seven holes.

Orion Minerals NL (ASX: ORN) (Orion or the Company) is pleased to announce that it has engaged the lead consultants to conduct the Bankable Feasibility Study (BFS) and Environmental Impact Assessment (EIA) studies at the Prieska Zinc-Copper Project (PC Project), in South Africa. In addition, Orion's second drill hole to reach target depth at the Deep Sulphide Target, has successfully intersected a 15.15m zone of massive sulphides. Commenting on the appointment of DRA and the drilling results, Orion's Managing Director, Errol Smart, said:

"Orion is confident DRA has the relevant experience and track record to work with the in-house team to manage the study through all phases of project development, from the technical feasibility, to the development of a robust business case for the financing and ultimately development of a mine at the PC Project.

The intersection of massive sulphides along strike from previously identified mineralisation is an important result for the Company. It supports the geological model developed by Orion to support the acquisition and highlights Prieska's potential to become a significant base metals producer."

W: www.orionminerals.com.au

Feasibility Study

DRA Projects SA Pty Ltd (DRA) and ABS Africa Pty Ltd (ABS Africa) have been appointed as the lead consultants to conduct the PC Project BFS and EIA studies. DRA will manage the BFS and will assume the role of the overall study coordinator and compiler. ABS Africa has been appointed to manage the EIA studies for the associated BFS.

The BFS and EIA work programs will be undertaken in parallel with the current activities (resource drilling, underground inspections and establishment of activities). The BFS will build on both the substantial existing historical dataset relating to mining and processing activities as well as the new information being generated by the onsite activities.

DRA and ABS Africa were selected following an extensive tendering and assessment process conducted by management with the assistance of R&R Quantity Surveyors and Project Managers, Earth Science Solutions environmental consultants and Falcon Hume Incorporated legal practitioners, as external third-parties to structure and guide the adjudication and award process and to prepare contracts.

DRA is a global company possessing multi-disciplinary engineering skills with a strong recording of project financing and mine development resulting from their work. DRA has operated for 33 years in mining, minerals processing, energy, agriculture, water treatment, marine and infrastructure services, from concept to commissioning, as well as operations. DRA has successfully completed over 300 projects in 26 countries including open pit and underground operations and importantly delivered 55 concentrator plants in the past 15 years.

ABS Africa was part of Epoch Resources and has over 40 years collective experience in providing sustainability services to the mining sector in Africa. ABS Africa has relevant experience covering complex Environmental and Social Impact Assessments to JORC standard feasibility studies, due diligence and audit, compliance monitoring and mine closure rehabilitation and closure planning.

ABS Africa's experience includes the application and alignment of studies to leading international standards including IFC Performance Standards, Equator Principles, UN Global Compact, and those published by the ICMM and EITI.

Deep Sulphide Target drilling program

The Deep Sulphide Target is the down-dip extension to mineralisation previously mined at the historic Prieska Zinc - Copper Mine, the cornerstone of Orion's development strategy.

The current program (refer ASX release 9 May 2017) is scoped to systematically test and confirm the extensive historical drilling data (refer ASX release 18 November 2015) with the aim of underpinning a maiden JORC compliant Mineral Resource estimate by cQ1 2018.

Orion's first diamond drill hole testing the Deep Sulphide Target (OCOD048) successfully intersected massive sulphides (refer ASX release 29 June 2017). The second hole to reach the target zone (OCOD052) has also successfully intersected massive sulphides, with a 15.15m intersection from 1117m (Figures 1 and 2). Significantly this intersection is ~100m from the nearest historical intersections, as well as being ~100m along strike from OCOD048, and represents an extension to the mineralisation confirmed by drilling at the Deep Sulphide Target and increased the confidence in the geological model supporting the target.

The OCOD052 sulphide intersection is predominantly pyrrhotite and pyrite with chalcopyrite and sphalerite, similar to the sulphides intersected in OCOD048 and those reported in historical drill logs (Figure 1).

The similarities in the lithological and sulphide sequences to OCOD048 enabled Orion's geological team to correctly interpret the progress of the hole, emphasising the consistency and continuity of the mineralised sequence.

Figure 1: Photograph showing massive sulphides in OCOD052 between 1126m - 1132m.

A further six holes are currently in progress (Figures 3 and 4) to provide statistical validation of historic drilling that intersected unmined mineralised zones, add infill data so that the resultant data spacing matches that modelled to be adequate for a Mineral Resource based on geostatistical analysis by Orion's consultants, and testing of areas along strike from this historical drilling.

Wedging is underway on OCOD048 with the first of a number of deflections, or daughter holes, to be commenced in coming days to enable mineralisation to be tested at distances of between 30m and 40m from the current intersection (or "mother" hole). Once OCOD052 has reached its planned depth of 1250m a number of deflections will be drilled from this hole to enable delineation of the newly identified mineralisation in this area.

D C

Interpreted Deep Sulphide Mineralisation Zone (Matthews, 2015)

15.15m of massive sulphide

B A

8m at 5.51%Zn + 1.15%Cu

12.05m at 4.05%Zn + 2.1%Cu

1.05m at 12.75%Zn

1.8m at 10.25%Zn

21m of massive sulphide

Figure 2: Cross Sections showing OCOD048, OCOD052 and interpreted mineralisation (refer Appendix 1 and ASX release 18 November 2015). Section lines are shown on Figure 3.