Errol Smart jumps ship from Orion to go into the exploration business for himself

Former Orion Minerals CEO Errol Smart is going to set up his own exploration and development operation in South Africa after abruptly leaving the junior copper miner at a critical stage of its development.Smart declined to provide specifics at this stage over the minerals he would be targeting or the structure to be set up.He told Miningmx, “we are putting together a group of people who are investors and players. I am a big believer in South African geology, and I see some great opportunities here.“The minerals required are in the ground here so, if we get a workable and functional MPRDA (Minerals and Petroleum Resources Development Act) which seems to be promised, then I think we can unlock enormous investment.”Smart denied speculation that he had been “pushed out” of Orion and said his departure was the result of the transition from project development to funding and construction.He commented, “there was no trouble in the company, and I did not have a bust-up with the board.  It was a transformational thing.  Junior mining development and exploration is different to going into production and, to be honest, I am not interested in the daily grind of production.“We were also getting to the point of having serious discussions with potential funders and those guys want assurance that there will be no management changes going forward.“You have to make sure that the guy who does the financing is also the guy who does the construction. It came to the point where it was the right time to move on and put it in other hands. “Asked about the suddenness of his departure Smart replied, “it was because of opportunities that presented for both parties.”But a degree of scepticism over Smart’s departure remains.  According to one South African mining industry source, “when a CEO quits with immediate effect like Errol has just done it invariably means there was trouble between him and the board, and he was forced out.  They will never admit it but that is what probably happened.”Smart’s unexpected resignation just days after Orion published the critically important definitive feasibility studies (DFS) for the Prieska copper/zinc mine and Okiep Copper project in the Northern Cape has left some investors wondering what is going on.Questions include: why Smart left at this crucial point; the practical experience of Tony Lennox – his replacement as CEO – to run a junior miner and the challenges involved in raising the amount of money required according to the studies.The capital costs are now put at R7.6bn for Prieska and R1.6bn for the Flat Mines development at Okiep.  That is a huge amount of money to be raised by a junior miner – particularly for projects in South Africa with its current poor mining investment image – and particularly given that the Orion share price is sitting near its all-time lows.Smart’s replacement – Tony Lennox – was previously a non-executive director of Orion and, according to the company, “is a highly experienced operational leader with vast experience in the construction, development and operation of large scale mining projects.”He was previously MD of South Africa’s major copper mine – Palabora Mining – then owned by Rio Tinto and Anglo American.That is a potential problem because Lennox was running a major, established mine backed by heavyweight shareholders with deep pockets.  Developing a junior mine from scratch is a totally different ball game.Smart commented “I believe he can do it. I am still a shareholder in Orion, and I think it’s going to be fine.  I have not left a void behind me. I put together a really good team to take it forward, so he’s got a circle of capable people around him.”Regarding funding Smart reckoned Orion had “broken the back” of the task. He pointed out Orion already had $80m coming in from Triple Flag while the IDC would be a 16% shareholder and was handling the BEE finance.“So that’s a big chunk of it. The bulk of the money will come through off-take related finance rather than banks because that’s the way base metal projects are being funded now around the world.”The post Errol Smart jumps ship from Orion to go into the exploration business for himself appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com