Ora Banda Mining has posted a blistering half-year result, raking in record revenues of $186.4 million, up 94 per cent on last year, from its Davyhurst gold project in Western Australia.
The company is sitting on a $57.8m cash pile amid surging production last year. It sold 47,824 ounces of gold in the six months to December.
The gold was produced at a decreased all-in sustaining cost of $2402 per ounce but was sold at flourishing all-time-high gold prices, confirming Ora Banda’s underground strategy is paying off in a big way.
Ora Banda is wasting no time reinvesting its extra $31m in cash by funding a major exploration and expansion phase at the burgeoning Davyhurst project.
Ora Banda’s Riverina Underground mine within Davyhurst has been the crown jewel of the company’s strategic refocus. Riverina repaid Ora Banda’s capital investment in 18 months by delivering 46,190 ounces at an impressive 4.5 grams per tonne (g/t) gold.
The successful underground endeavour led Ora Banda to commission its Sand King Underground mine, which is set to further boost the company’s production profile in the first half of this year.
Ora Banda’s transition to high-grade underground mining has fundamentally changed its financial trajectory. EBITDA skyrocketed 254pc to $84.2m and net profit after tax (NPAT) was up 371pc to $50.8m, which has resulted in a staggering 765pc increase in operating cash flow to $91.2m. The results all come with a backdrop of a record-breaking gold price environment.
Ora Banda Mining managing director Luke Creagh said: “The operating margins of the business continue to improve, as reflected by the 371 per cent increase in NPAT. Supported by the current gold price environment, we expect this trend to continue to grow into H2 of FY25 and into FY26 with the Sand King Underground scheduled to reach steady state production in the June quarter 2025.”
The company says Riverina continues to outperform, with underground grades coming in at a substantial 5.4g/t gold, exceeding the reserve expectations. Open pit stockpiles, weighed on margins, have now been fully depleted.
Creagh said Ora Banda had reached an important inflection point given Sand King Underground was progressing on schedule. Higher-grade feed from Sand King will progressively fill the Davyhurst mill paving the way for increased production and cash flow and reduced costs.
The project delivered its first development ore in December and full production is expected within the next three months.
Management believes Sand King can deliver up to 21,000 ounces in the second half of the year, with its high-grade ore helping to further lower costs at the over-performing Davyhurst mill.
Ora Banda has $160m in carry-forward tax losses still in its arsenal, ensuring it is well-positioned to keep expanding without a tax burden eating into its rising profits.
The half-year results are a testament to the quality of the Davyhurst system and its expanding high-grade underground operations, while record gold sales have enabled the company to self-fund its second underground mine at Sand King.
With gold prices at record highs and the 150,000-ounce annual production target in sight, the stars are aligning for Ora Banda as it smelts its place as one of Australia’s rising gold producers.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
