Record gold quarter boosts Ora Banda underground mission
Ora Banda Mining has increased the gold production and head grade from its Davyhurst mine in Western Australia’s Goldfields region as it ramps up its mission to become a high-grade underground miner.
The company today confirmed record gold-ounce production for the past quarter, fuelled by its new Riverina underground development, despite confronting considerable weather delays during the month of June. It marks the fourth consecutive quarterly production increase, lifting by 11 per cent in the past period.
Ora Banda’s June quarterly report shows the company produced 19,271 ounces of gold at a head grade of 3.8 grams per tonne and sold 18,205 ounces from its Davyhurst operations for the three-month period.
All-in sustaining costs (AISC) per ounce were 16.2 per cent above guidance – again, predominantly due to the weather delays. However, prior to the weather delays, management oversaw a record month in June.
The production of 7000 ounces at an AISC of $2157 per ounce was largely driven by the higher-grade ore from the company’s Riverina underground.
The drop in AISC and increase in head grade bodes well for Ora Banda’s FY25 production guidance, as higher grade means more ounces at its 1.2 million-tonne per annum processing plant when at full capacity.
The company has set FY25 guidance at 100,000 to 110,000 ounces at a significant decrease in AISC to between $1975 and $2125 an ounce. That represents a 49 per cent increase in production and about a 25 per cent reduction in AISC. It also means plenty of blue sky with today’s gold price in Australia sitting at more than $3621 an ounce.
The grade improvements and pursuit of underground advancements highlight Ora Banda’s strategic endeavours to enhance the project’s high-grade potential.
Following the completion of phase-two drilling at Ora Banda’s Sand King underground, it was approved via a final investment decision (FID) by the board to become the company’s second underground mine. The mine is expected to cost about $39 million to develop and have steady-state production of some 60,000 ounces per annum by next year’s June quarter.
Management believes establishing two high-grade underground projects will form the key pillars of its broader “Drive to 150” growth strategy, which involves lifting gold production to 150,000 ounces of gold annually by 2026.
Ora Banda ended the quarter with $26.8 million in cash after spending a substantial $20 million on growth capital, including $13 million on the Riverina underground, $3.5 million on growth infrastructure and $3.5 million on resource definition and exploration activities. Additionally, a joint venture (JV) deal with Wesfarmers subsidiary Davyston Exploration was recently completed, with Ora Banda receiving the final $16 million of a total $26 million for the lithium rights across the Davyhurst ground.
Following the receipt of the proceeds, the company says it repaid $7 million worth of debt to Hawke’s Point and the remaining $4 million will be settled on completion of final royalty documentation.
The Davyhurst mine sits 120km north-west of Kalgoorlie and now hosts a mineral resource estimate of 23.3 million tonnes grading 2.6g/t gold for 1.95 million ounces after a mineral resource upgrade earlier this month.
The FID to mine the Sand King underground followed a recent new high-grade lode discovery after a hole intersected 16m grading 5.6g/t gold from 145m. The following mineral resource upgrade was accordingly up 176 per cent to 3.4 million tonnes at 2.8g/t for 306,000 ounces, all but confirming its potential as a second underground operation at Davyhurst.
Ora Banda’s quarterly results, while not perfectly in line with its guidance, continues to demonstrate the company’s commitment to delivering on its high-grade underground strategic directive. With its drive to 100,000 ounces of production seemingly already in the books, the future looks promising as the company pushes to its greater “DRIVE to 150” strategy.
Source: https://thewest.com.au/