Ora Banda Mining has kicked its major expansion plans into high gear, executing a $233 million engineering, procurement and construction (EPC) contract with GR Engineering Services for a new processing plant at its Davyhurst gold project in Western Australia.
The deal locks in the construction of a new three-million-tonne-per-annum (Mtpa) processing facility, which forms the cornerstone of the company’s ambitious “Drive to 300” growth strategy.
With GR Engineering previously appointed as the preferred contractor on May 18, the formal signing of the contract represents a major de-risking milestone for the expansion. The company says the project is progressing well, with earthworks already underway on site since late May.
The “Drive to 300” is Ora Banda’s strategy to transform itself into a significant mid-tier gold producer, targeting an annual production profile of 300,000 ounces. The new 3Mtpa plant is the key piece of infrastructure required to achieve this goal, representing a significant step-up from the existing 1.2Mtpa conventional carbon-in-pulp processing facility at the site.
As of the end of the March quarter, the company held $231.7 million in cash reserves after a stellar three months, in which it generated $76.3 million in free cash flow from gold production. That cash position is particularly noteworthy because it gives Ora Banda the financial firepower to fund its major growth initiatives entirely from internal sources, including the Davyhurst expansion project.
The Davyhurst gold project lies 120km northwest of Kalgoorlie in Western Australia’s prolific Leonora-Laverton greenstone belt, a region that has spawned a veritable constellation of world-class gold mines.
Ora Banda controls a massive and strategic landholding in the area, with its tenements covering some 1138 square kilometres. The ground holds about 130km of prospective strike length, notably covering the convergence of two regionally significant geological structures that are considered major controls on gold mineralisation in the district.
The company’s rapid progression from appointing a preferred contractor to signing the final EPC contract and breaking ground on site in less than a month appears to highlight a clear intent from management to fast-track its expansion plans.
With the EPC contract now formalised, Ora Banda has a fixed price and a clear pathway for the delivery of the new plant, removing significant uncertainty from the project’s development. The focus for the company and its contractor now shifts entirely to construction and delivery.
This isn’t just a plan on paper anymore; it’s dirt being moved and a clear schedule being executed. For Ora Banda, the “Drive to 300” strategy just hit the accelerator.
With a massive and prospective land package in one of WA's premier gold belts, the construction of a new, larger processing plant - funded entirely from existing cash reserves - could well be the start of a significant new chapter for the company.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Doug Bright
