Ora Banda Mining has beefed up the mineral resources and ore reserves at its Davyhurst gold project (DGP) outside Kalgoorlie in Western Australia, attributing the growth to its underground exploration success and the definition of a new gold lode.
The company not only managed to increase its underground ore reserve by 94 per cent to 1.2 million tonnes at 3.7 grams per tonne for 142,000 ounces – up from 73,000 ounces – but it also sweetened up the gold reserve grade by an extra 17 per cent.
The significant additions to the DGP’s mineral resource estimate come from the Riverina operation and Sand King underground where the company recently discovered a new high-grade lode system, named “090”, with the first exploration hole at the site delivering a 16m hit grading 5.6g/t gold from 145m.
The grade improvements and pursuit of underground advancements highlight Ora Banda’s strategic endeavours to enhance the project’s high-grade potential in a bid to increase ounce production from the existing 1.2 million-tonne per annum processing plant.
The company is holding more than $31 million in cash and bullion, in addition to being effectively debt free. Management will now look to allocate a significant portion of its riches to expand its newly-grasped mineralised systems, with the aim of extending the mine life and increasing its options around an accelerated production profile.
Only recently, the company spent $10 million on developing its Riverina underground mine and $6.5 million on resource and exploration activities to fast-track the Sand King resource upgrade.
Ora Banda Mining managing director Luke Creagh said: “Although it is still early days, we are extremely encouraged by the fact that we've been able to grow our ounce position so quickly and that we are now seeing the deposits show significant potential along strike and at depth.”
The outstanding recent success at Sand King, which is up 176 per cent to 3.4 million tonnes at 2.8g/t for 306,000 ounces, has all but confirmed its potential as a second underground operation at the DGP. Mining studies are now underway as the deposit hurtles towards a final investment decision for production.
The company says delivering a second underground mine to support its primary Riverina operation should lift the ore grade for its 1.2 million tonnes per annum Davyhurst processing plant and substantially increase its production rate.
Davyhurst sits 120km north-west of Kalgoorlie and now hosts a mineral resource estimate of 23.3 million tonnes grading 2.6g/t gold for 1.95 million ounces.
Ora Banda has now completely transitioned from open pit mining to be solely mining the underground and both the Missouri open pit and the Sand King open pit resources that sit on the Siberia trend have been removed from the resources estimate. The company considers the resources to be depleted and has no intention of continuing open pit mining.
The Sand King deposit is on the Siberia project trend about 800m north of the Missouri open pit and about 37km south of its Davyhurst processing plant. Sand King was previously mined by Western Mining Corporation from the late 1980s to 1991 by open pit methods, producing about 50,000 ounces at 4.8g/t gold.
A small cutback to the south was introduced by Ora Banda in August last year and was completed early this year.
The company is continuing to deliver on its high-grade underground strategic directive by steaming ahead with its Riverina underground and its now well-funded substantial exploration programs. It appears to be well on track to produce a scheduled 100,000 ounces of gold per annum by next year and potentially be operating a second underground mine soon after.
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By Andrew Todd
