Ora Banda advances new plant and Waihi mine despite September quarter disruption

Growth spending accelerates as quarterly output slips

Ora Banda Mining (ASX:OBM) is pushing its Davyhurst expansion forward, but the September quarter showed the cost of getting there. Gold production fell to 33,305 ounces and equivalent gold sold to 33,939 ounces after wet weather disrupted haulage and an extended shutdown at the existing mill reduced throughput.

Davyhurst milled 271,879 tonnes during the quarter, down 17% from June, while AISC rose 9% to A$4,214 per ounce sold. The company attributed the higher unit cost primarily to fewer ounces produced, weather impacts, milling delays and the start of Waihi open-pit ore mining. FY27 production and cost guidance was maintained, with management saying the weather interruptions and mill downtime were expected to be limited to the September quarter.

The lower production did not prevent Ora Banda from generating A$83.3 million in operating cash flow. That cash was more than absorbed by A$133.7 million of exploration, development and growth spending, leaving A$207.0 million at 30 September, down from A$267.7 million three months earlier.

New processing plant remains on schedule

The central bet in the company’s DRIVE to 300 program is moving from presentation slide to construction site. Substantive work began on the new 3.0 Mtpa processing plant during the quarter, including bulk earthworks, crusher and mill structures, and concrete foundations for the carbon-in-leach circuit. Ora Banda said construction remained on schedule and within budget, with all long-lead and critical-path items sourced or ordered.

The company spent A$81.1 million on capital infrastructure during the quarter, including the plant, the Siberia accommodation village and other site upgrades. The 150-plus-room Siberia village was completed in October, while the ROM pad was expanded to accommodate stockpiled ore ahead of the new plant’s commissioning. The DRIVE to 300 ambition remains explicitly aspirational rather than a production target, and Ora Banda says it does not yet have reasonable grounds to believe the 300,000-ounce goal can be achieved.

Waihi Underground starts ahead of schedule

Development at the high-grade Waihi Underground mine began during the quarter, ahead of schedule. The project is three kilometres west of the Davyhurst plant and is scheduled to contribute underground ore from mid-2027, helping bridge the period before the new processing facility is expected to start operating in early 2028. The company’s Waihi underground launch had previously highlighted high-grade Midnight drilling, including an intersection of 11.5 metres at 26.0 grams per tonne.

Waihi’s next important operational step is establishing drill drives to test extensions around the Golden Pole and Midnight lodes. Ora Banda cites a 5.0g/t Ore Reserve grade for Golden Pole and describes the wider system as large and under-drilled, but the timing and scale of any future resource growth remain dependent on further drilling and mine development.

Development also began at the Palmerston decline at Sand King North in early October, after the quarter ended. The decline is intended to provide drilling access to the prospective corridor and support resource and reserve work aimed at potential mine-life extensions.

Exploration points to another resource milestone

Exploration spending reached A$23.2 million for the quarter, focused on Round Dam, Little Gem, Riverina and Sand King. At Little Gem, drilling has defined parallel Sapphire lodes over 2.6 kilometres of strike and to 200 metres depth, including a reported intersection of 5.0 metres at 18.1g/t. A maiden Mineral Resource is expected in late Q2 or early Q3 FY27, following the company’s Little Gem drilling results that extended the Sapphire lode and identified mineralisation remaining open along strike and at depth.

Liquidity buffer expands after quarter end

Ora Banda subsequently increased its revolving credit facility from A$200 million to A$300 million by adding Westpac alongside ANZ and Commonwealth Bank. The facility runs to June 2029 and carries no mandatory hedging requirement, taking reported total liquidity to A$507 million when combined with September-end cash.

Gold-price protection covers 8.3 thousand ounces a month from November 2026 through June 2028 at a floor price of A$6,000 an ounce, for 166.7 thousand ounces in total. Partial collars covering November 2027 to June 2028 also include 33,128 ounces of sold call options at A$8,400 an ounce. That protection offers some revenue visibility while the company funds its expansion, but it also limits the upside on the collared ounces if gold prices rise above the relevant call strike.