Ora Banda Mining has delivered a cracking September quarter, smashing records with 30,595 ounces of gold produced and $38.5 million in free cash flow adding to its mounting $122.7 million cash pile.
The gold haul, whilst up 39 per cent from the prior quarter, fell a touch short of the lofty guidance expectations, however, a better-than-expected drop of 20 per cent in all-in sustaining cost per ounce (AISC) to $2872 capped off a very successful quarter.
Record gold price sales averaging $5390 an ounce, helped the company rake in $168.9 million in revenues. The cash build came despite some $49.5 million spent on underground development, $10.9 million on infrastructure and a whopping $13.6 million on exploration.
The results underscore Ora Banda’s mid-tier gold producer status at its Davyhurst operations outside of Kalgoorlie that many thought were almost dead just a few short years ago before new management implemented a new mine plan. Remarkably, Ora Banda is now on its way towards a $2.5b market cap.
Sand King’s ramp-up hit a promising 16,000 ounces produced at 3.9 grams per tonne (g/t) gold, alongside a 15 per cent throughput boost at the Davyhurst mill to 293,700 tonnes for the quarter.
Even with weather-related road closures and power outages slowing things down, Ora Banda says it remains on track for its 140,000-155,000 once financial year guidance. A 60 per cent jump from last year’s 92,400 ounces.
Sand King’s production is set to climb even further this quarter too, while Riverina’s 13,000 ounce September quarter was hampered by ore drive extensions delaying stopes.
The company also retains a $50 million, rainy day revolving credit facility with ANZ and Commonwealth Bank that is nearing its final terms.
Management is particularly happy with exploration initiatives, which are firing on all cylinders across multiple gold trends.
At Ora Banda’s Round Dam trend, drilling along a 7km strike has uncovered six subparallel lodes, including extensional hits like 8m at 20.6g/t and 2m at 32.4g/t, hinting at open pit and underground potential littered along the district.
A 45-hole campaign at the nearby Waihi prospect also struck a new lode discovery, returning 6m at 21.1g/t and 13.5m at 6.1g/t to build momentum for a third underground mine, just a stones throw away from the Davyhurst mill.
To the north at its Little Gem discovery, phase 2 drilling confirmed a multi-lode system over 1km of strike, with follow up hits including a 8.8m grading 6.3g/t, prompting a 38-hole phase 3 program now underway.
Ora Banda Mining managing director Luke Creagh said: “This record quarter, driven by the ramp up of our second underground mine at Sand King, reflects the hard work by the team and demonstrates Ora Banda’s ability to find and develop mines, with Sand King achieving payback 12 months after establishing the portal.”
The company says it is also tackling the 1.2 million tonne per annum processing bottleneck at Davyhurst, with feasibility studies in the works for a 3Mtpa plant as resources across the project continue to stack up.
With $122.7 million in cash, a $73 million exploration budget and $86 million in planned capex upgrades, Ora Banda is now well-placed to hit all of its growth target ambitions.
With drilling results and plant upgrades set to shape the company’s path to a bigger, leaner operation, Ora Banda will no doubt be looking to pull out all stops to get that plant upgraded to 3Mtpa while the gold price is riding high.
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By Andrew Todd
