Ora Banda Mining Accelerates Growth with $57.8M Cash and Rising Gold Output
Ora Banda Mining reports a robust December quarter, boosting cash reserves to $57.8 million and advancing underground operations at Riverina and Sand King towards a 150koz production target in FY26.
- Cash balance increased by $9.1 million to $57.8 million
- Riverina Underground operation fully paid back within 18 months
- Gold production of 22,973oz for the quarter, with 47,300oz in first half FY25
- Sand King Underground on track for steady state production of ~60kozpa by June 2025
- Significant investment of $30.8 million into growth projects and exploration
Strong Financial Position Bolsters Growth Ambitions
Ora Banda Mining Limited (ASX: OBM) has delivered a compelling December 2024 quarter update, underscoring the strength of its underground mining strategy. The company’s cash reserves rose by $9.1 million to $57.8 million, despite a substantial $30.8 million investment in development and exploration activities. This financial robustness provides a solid foundation for Ora Banda’s ambitious production growth plans targeting 150,000 ounces of gold by FY26.
Riverina Underground: A Rapid Payback Success
The Riverina Underground operation remains a standout performer, having fully repaid its capital investment within just 18 months of commencing operations. The mine continues to outperform expectations, with mined grades consistently reconciling above the Ore Reserve grade of 4.2g/t, reaching 5.3g/t this quarter. Development progress is opening multiple mining fronts, enhancing operational flexibility and setting the stage for a strong second half of FY25.
Sand King Underground Advances on Schedule
Sand King Underground, Ora Banda’s second underground mine, achieved a significant milestone by intersecting its first ore just four months after portal establishment. The operation is on track to commence stoping in March 2025 and reach steady state production of approximately 60,000 ounces per annum by June 2025. This higher-grade feed is expected to progressively replace lower-grade stockpiles, improving mill feed quality and reducing costs.
Operational Highlights and Processing Efficiency
The Davyhurst mill processed 280,409 tonnes at a head grade of 2.9g/t, a 9% increase in throughput from the prior quarter. While the depletion of legacy open pit stockpiles caused a 15% reduction in head grade, the integration of higher-grade Sand King material is anticipated to reverse this trend in the coming quarters. Total gold production for the quarter was 22,973 ounces, with first half FY25 production at 47,300 ounces.
Exploration and Development Drive Future Potential
Exploration remains a key focus, with $5.5 million spent on resource development and drilling programs targeting extensions at Riverina and grade control at Sand King. The company deployed multiple diamond and reverse circulation rigs to advance these programs, aiming to convert resources and identify new opportunities within its extensive tenement portfolio. Greenfields exploration is set to accelerate in the March quarter, potentially unlocking further value.
Cost and Safety Metrics
All-in sustaining costs (AISC) rose 11% to A$2,536 per ounce sold, influenced by non-cash share-based payments and the treatment of higher-cost open pit stockpiles now depleted. Importantly, Ora Banda maintained a strong safety record with no lost time injuries reported during the quarter, reflecting operational discipline alongside growth.
Management Outlook
Managing Director Luke Creagh highlighted the operational and financial achievements as validation of Ora Banda’s underground strategy. He emphasized the transformative impact of Sand King’s higher-grade feed on production and cash flow, and the company’s readiness to accelerate development of additional projects as exploration results materialize. This positions Ora Banda well for scaling production and enhancing shareholder value in the near term.
Bottom Line?
Ora Banda’s disciplined execution and strong cash position set the stage for a pivotal ramp-up in gold production and cost efficiencies through FY25 and beyond.
Questions in the middle?
- How will Sand King Underground’s ramp-up impact overall production costs and margins?
- What exploration results can investors expect in the March quarter to support resource growth?
- Will the company maintain its strong cash flow generation amid increased capital expenditure?