Ora Banda Mining directors and London-based investor Hawke’s Point have stumped up a combined $9.2m as part of a $30m capital raise to fund the cost of operating the reimagined underground Riverina project.
The company says the well-supported shares placement and planned development of the underground system near Kalgoorlie, in WA’s renowned Goldfields region, will help set it on the path to producing 100,000 gold ounces annually by the 2025 financial year.
The two-tranche placement of new fully-paid ordinary shares also ensures the company will have sufficient funds to continue its exploration efforts in a bid to expand its high-grade resource inventory.
Just last week, Ora Banda received financial investment decision approval from its board of directors to start mining at the Riverina deposit, where it has recently doubled the underground mineral resource to more than 300,000 gold ounces. The updated resource now sits at a credible 303,000 ounces at a grade of 4.1 grams per tonne gold.
The placement will comprise the issue of up to 267,110,668 fully-paid ordinary shares at 11.25 cents each and will settle in two tranches with up to 185,088,680 placement shares issued pursuant to the company’s existing capacity. The remaining placement shares will be issued subject to shareholder approval at a general meeting expected to be held in May.
Major shareholder Hawke’s Point is subscribing for $8 million and Ora Banda board members are subscribing for $1.2 million, with shareholder approval required before either investment is finalised. New shares under the second tranche of the placement are expected to be issued in May.
Ora Banda Mining managing director Luke Creagh said: “The placement provides Ora Banda with funds to meet the estimated capital costs for the development of the Riverina underground mine which will set Ora Banda on the path to achieving a +100kozpa production profile in FY25.”
The company last week revealed plans to secure $4.2 million in a three-way deal that includes the sale of four non-core Lady Ida tenements to Beacon Minerals, in addition to a new royalty agreement with Hawke’s Point.
That came a week after Ora Banda agreed to sell low-grade gold resources, three existing mining licences, four infrastructure-related licences and two licence applications at Lady Ida to Lamerton Pty Ltd and Geoda Pty Ltd for a cool $10 million.
Assay highlights from recent drilling at Riverina’s Main Lode East prospect showed some impressive grades including a 2m hit at 49.8g/t gold from 163m. Additional results from Main Lode East showed another 2m hit going 20.2g/t gold from 276m, containing 1.5m at 27.53g/t gold from 276.6m. There was also a further 3.6m intercept reading 10.4g/t gold from 210m, including 0.5m at an impressive 70.38g/t gold from 213m.
Exploration at its Main Lode West prospect also returned positive results including 3.7m grading 26.9g/t from 98.7m and a 2.8m intercept at 16.8g/t gold from 193.1m, containing 2.2m reading 21.01g/t gold from 193.7m.
New optimism in the turnaround mine plan at Ora Banda is being underpinned by a projected massive cut in previously high all-in sustaining costs, which reached as much as $2950 an ounce in the December 2022 half-year. Management forecasts that figure to drop to a company-wide $1750 and just $1650 at Riverina.
The current underground resource of more than 300,000 ounces remains open in all directions and a second-phase drilling program will target extensions further south and at depth. The next phase of exploration is expected to commence within days.
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By Michael Philipps
