ASX-listed Ora Banda Mining has made good on its promise to breathe new life into the old Davyhurst gold operation about 120 kilometres north-west of Kalgoorlie after producing its first gold bar at the new-look operation. Davyhurst is a very different operation with a very different resource profile today to the operation that once impaled Eastern Goldfields who slipped into administration with the project.
The Dave Quinlivan-led Ora Banda reached the first gold pour milestone at Davyhurst just six to seven months from when redevelopment site works commenced.
Management says all associated on-site infrastructure required to support the rejuvenated Davyhurst gold processing plant’s annual rated throughput capacity of 1.2 million tonnes of ore – which the company is currently in the process of ramping up to – is all systems go and has also been fully commissioned.
Pre-production CAPEX for the development of the Davyhurst mining and processing operation was an exquisitely low $45 million.
Ora Banda Mining Managing Director, David Quinlivan, said: “It has been an impressive team effort to deliver this project into production under the uniquely challenging circumstances of 2020 and 2021. Our focus now remains on the continued ramp-up of activity as we progress toward steady state and the ultimate goal of delivering a long-life and sustainable gold operation.”
The Perth-based company plans to mine six satellite deposits, which are all located within 50km of the Davyhurst gold processing plant, over the next five or so years at least.
Latest published global probable ore reserves for the six deposits stand at 6.1 million tonnes of ore at a solid average grade of 2.4 grams per tonne gold for 460,000 ounces of contained gold.
According to Ora Banda’s definitive feasibility study on the mining and processing operation that was completed last year, Davyhurst was forecast to churn out free cash flows of $357.8 million after tax over its initial 5.2-year life of mine period, or an average of $68.8 million per annum.
The robust financial projection was based on gold production at Davyhurst averaging 81,000 ounces per annum, a received gold price of $2,550 an ounce and all-in sustaining costs of production of $1,578 per ounce. Project capital payback has been estimated at an impressive seven months.
Davyhurst has been a tough nut to crack since gold mining and processing operations began at the project in 1997. Ora Banda Mining’s predecessor company, Eastern Goldfields ran into financial troubles at Davyhurst, as did a couple of the project’s previous owners, so punters will be watching the new gold miner’s progress closely to see whether it can conquer the difficult 25-year-old golden child.
It is, however, a very different operation with a very different mine plan and resource base to draw from when compared to previous failures – and the current uber high gold price doesn’t hurt either.
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