Ora Banda Mining has received an early $10 million Christmas present as part of its Goldfields project farm-in agreement with Wesfarmers subsidiary Davyston Exploration – and another $16 million is on the way.
Davyston, previously Brenahan Exploration, will pick up a 65 per cent interest in the lithium rights at the Davyhurst gold project north of Kalgoorlie. The project has a highlight drill hit of 11.1m at 1.28 per cent lithium oxide from 54m, including 8m at 1.56 per cent and a maximum value of 1m at 2.13 per cent lithium oxide, in addition to gold.
Ora Banda says it has signed an amendment to the Davyhurst project transaction agreement with Davyston, which allows for the Christmas cash payment to be delivered today. It coincides with the formation of the new joint venture (JV) between the pair and the remaining $16 million will be paid to Ora Banda by the end of April next year.
As part of the deal, Ora Banda will have a 35 per cent interest in the JV and will be free-carried to the completion of a definitive feasibility study (DFS) for the Davyhurst project. Davyston also retains an option to fund $15 million in exploration costs over three years to increase its stake to 80 per cent.
Interest in the Davyhurst project was piqued back in April year when Ora Banda drilled a three-hole exploration program at its Federal Flag prospect, with the first hole finding lithium-enriched pegmatites. The company says petrography has confirmed the abundant primary lithium-bearing mineral is spodumene.
Ore Banda says the second exploration hole drilled at Federal Flag intersected three lithium-caesium-tantalum (LCT) pegmatites in the weathered zone where grades were subdued.
The Federal Flag prospect is just 10km from the company’s Davyhurst gold processing plant and has shown its potential for underground gold mining in the past, with assays from drill holes below the existing main open pit going 6m at 17.1 grams per tonne gold, 6m at 14.5g/t, 8m at 4.7g/t, 4m at 4.3g/t, 5m at 3.8g/t and 2m at 6.3g/t. The base of another open pit, north of the main pit, has also been drilled out and holes below that assayed at 8m at 3g/t gold, 8m at 2.2g/t, 10m at 5.5g/t and 9m at 4.7g/t.
Exploration drilling hit lithium between the two pits on a pegmatite trend striking north-west/south-east and dipping at about 35 degrees to the north-east. Drilling in the area between the pegmatites threw up an assay of 1m at 98.8g/t gold including 0.7m at a stunning 140.69g/t, 4m at 5.2g/t and 3m at 19.4g/t, demonstrating the multi-commodity potential of the prospect.
Ora Banda reviewed its mineral resource estimate for the Davyhurst project in October and later revealed that the total resource now stands at 21.4 million tonnes at 2.7g/t gold for 1.83 million ounces. Total reserves at the project are 160,000 ounces at 2.6g/t gold, which includes 145,000 ounces grading 3g/t gold in the mining project.
With a nice chunk of cash in the bank, Ora Banda has strengthened its balance sheet ahead of its April cash top-up – and that is not a bad start to the Christmas break.
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By Andrew Duffy
