Ora Banda Mining has ended its financial year with a record 92,400 ounces of gold produced, a 32 per cent increase over the previous year, marking the company’s second consecutive year of more than 30 per cent organic growth.
Production includes 1400 ounces from third-party processing under an ore sale agreement with Norton Gold Fields at Paddington Mill.
The ore sale agreement was executed with Norton in June for 50,000 tonnes, with about 19,000t processed by the end of the month and the remainder to be treated early in the new financial year.
Production for the June quarter, including the attributed ounces, was 21,900 ounces of gold.
Ore Banda said output was lower than expected due to a slower mill ramp-up and delays in the Riverina Underground mining, which deferred 3000 ounces of gold from high-grade stopes into the new quarter.
The company’s total gold sales amounted to 20,200 ounces processed through its Davyhurst mill during the June quarter.
The company’s stockpiles ended the year with 165,000t at 1.9 grams per tonne (g/t) for 10,000 ounces of gold, including a higher-grade 63,000t at 2.8g/t for 5700 ounces. With an additional 2800 ounces of gold in circuit, Ora Banda is looking well set up for the new year.
Ora Banda Mining managing director Luke Creagh said: “FY25 as whole was a very successful year for Ora Banda. We achieved record production with over 30 per cent improvement on the previous year, commenced and ramped up Sand King as our second underground mine, extended Riverina mineralisation by over 500m to 1km depth, and advanced numerous potential underground mining targets with exploration drilling.”
Creagh said after investing more than $100 million in capital, resource development and exploration in FY25, the company had increased its cash position by over $57 million to finish the year with $84.2 million in its bank account. The additional free cash flow included a $3.5 million hike in the final quarter.
Ora Banda is looking to produce between 140,000 ounces and 155,000 ounces of gold in the new financial year, which would represent an increase of about 60 per cent on FY25.
The company expects this will be driven by a full year’s feed from its underground mine at Sand King and about 21,000 ounces of gold from the sale agreement with Norton.
It anticipates an all-in sustaining cost between $2800–$2900 per ounce of gold, reflecting higher third-party crushing and processing costs, a full year of mining and development costs for Sand King underground and royalties from expected stronger gold prices.
Mined ounces are expected to range between 165,000–170,000 ounces, which would represent an 85 per cent rise year-on-year, driven by underground mining at its Sand King and Riverina operations.
Capital expenditure for the new year embraces $86 million in capital growth, which includes $37 million for underground development such as drill drives and infrastructure, and $6 million for process plant upgrades.
It expects to spend a further $43 million on infrastructure, including an airstrip, camps, haul roads, workshops and an onsite assay laboratory to improve the turn-around on grade control sample analyses.
Exploration and resource development expenditure is projected to be an ambitious $73 million for about 329,000m of drilling, which will almost double the total of the past three years.
Important drilling objectives include extending the mine life at the Riverina and Sand King mines and testing the down-dip potential at the company’s Waihi target for a possible third underground mine.
A maiden seven-hole program was completed recently at Waihi to target high-grade shoots beneath historical open pits.
One hole encountered a new mineralised zone in the footwall of the main mineralisation at 330m below surface, which had an attention-grabbing intercept of 8.7m assaying 9.3g/t gold, including 1.1m at 30.2g/t gold and a 0.4m sweetener going 90.6g/t.
Ore Banda proposes additional exploration and drilling to advance the company’s Little Gem, Round Dam and Mulline prospects and more regional, belt-wide exploration across about 140 kilometres of tenure.
Exploration success at Waihi, Little Gem or other prospects could significantly enhance the company’s resource base and long-term value.
Ora Banda is also undertaking a feasibility study to expand its Davyhurst plant to about 3 million tonnes per year to address a current 1.2Mt per year processing bottleneck.
This upgrade would reduce unit costs, lift recoveries by about 4 per cent, reduce reliance on third-party processing and provide more support for new mines and bigger open pits that would increase the ore flow.
Ora Banda is transitioning from a mid-tier producer to a more significant player, leveraging Sand King and Riverina to drive production growth. Meanwhile, the company’s exploration focus points to a long-term strategy to build a sustainable resource inventory.
And it is on a strong growth trajectory, with its FY25’s 32 per cent production growth for the year and $57.4 million free cash flow proving operational success and financial discipline.
Despite its recent June quarter challenges, the company’s guidance for the new year indicates 60 per cent growth, which reflects its confidence in Sand King underground and the Norton ore sale agreement.
The company’s $84.2 million cash balance provides a solid floor underneath its $86 million growth capital and $73 million exploration budget, which nicely balances investment with cash flow generation.
Remaining risks and potential prickly times could include mining delays, ramp-up issues and reliance on non-binding agreements with external gold processors.
Any potential hurdles could be largely offset by a successful plant expansion, and new exploration discoveries could position the company as a low-cost, high-growth producer, particularly if gold prices remain strong.
Ora Banda’s results for the past year reflect solid operational and financial performance, despite some short-term challenges. The company’s guidance for next year points to aggressive growth, supported by a strong cash position and significant exploration investment.
The imminent feasibility study and mine and exploration drilling outcomes will be pivotal for long-term value creation, and punters could well weigh the growth potential against operational and cost risks in a gold market sitting at around $5060.
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