Ora Banda Mining has now settled a $10 million deal to sell its non-core Lady Ida tenements, 65km south of Kalgoorlie, in a move designed to sharpen the company’s focus on high-grade underground gold deposits.
The company will retain rights on the tenements to all minerals other than gold and silver as part of the now-completed sale to Lamerton and Geoda and plans to move ahead with its Davyhurst gold project. Management previously said the Lady Ida ground was not scheduled for production even when its overall target was projected to grow to 100,000 ounces of gold per annum in 2025.
The mining leases included in the Lady Ida tenements sale are the subject of applications for forfeiture and related Supreme Court proceedings. The purchasers are affiliates of the applicant for the forfeiture and transfer of the tenements, bringing Ora Banda’s defence of the forfeiture applications to an end.
Ora Banda Mining managing director Luke Creagh said: “The sale of these tenements for $10 million is a great outcome for OBM shareholders as they do not align with OBM’s strategy to target high-grade underground deposits, nor is it included in our production target of 100kozpa supported by reserves. The $10 million sale proceeds will strengthen OBM’s balance sheet as we progress the Riverina underground toward Final Investment Decision and continue exploration on other advanced high-grade targets.”
The tenement sale will strengthen Ora Banda’s balance sheet as it charges ahead with exploration efforts at its Davyhurst project, about 100km north-west of Kalgoorlie. The project covers more than 100km of north-south-trending gold-prospective strike and about 1200 square kilometres of tenements that have not been explored for deep underground mining.
The area has a current resource base of 1.8 million ounces at an average grade of 2.6 grams per tonne gold and a centrally-located processing plant at Davyhurst, which has a 1.2-million-tonne per annum capacity.
The new cash, in addition to the $24.7 million in the bank at the end of last quarter, is being put back into the ground and producing some more solid gold hits as the company focuses on a “geology-first” approach to reset its reserves and provide grade uplift.
Last month, Ora Banda revealed some stellar gold assays after drilling at its Riverina deposit in the north of the Davyhurst project area, expanding mineralisation beyond its current resource boundaries to the south and at depth. Results included 8.1m at 13.4g/t gold from 515m, 3.7m at 7.4g/t from 155m, 7m grading 3.5g/t from 100m and 2m going 10.6g/t from 29m.
The company had a strong finish to the financial year after producing a record 16,700 gold ounces at its Missouri open-pit mine in the June quarter – a 49 per cent increase from the previous period. It churned through more than 229,000 tonnes at a grade of 2.3g/t gold from Missouri, with higher volumes based on the back of the operation’s WMC and Monarch lodes being exposed and mined.
The open-pit mine has been a significant improver for Ora Banda after it produced 9200 gold ounces in the first quarter of the past financial year to record an impressive increase of 82 per cent a year later. Mined grades at Missouri also increased by 42 per cent during the year, from 1.7g/t gold in the first half, up to 2.4g/t in the second half.
With plenty of cash in the bank and a central processing plant surrounded by plenty of gold, the company’s 2025 production target may well be within reach.
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