Ora Banda (ASX:OBM) looks to raise AU$20 million under equity raising

Image Source: OBM Presentation 22/02/22


  • Ora Banda Mining has launched an equity raising of up to AU$20 million comprising an institutional placement and entitlement offer.
  • The funds shall be used for financing exploration and drilling work to progress resource development and meet other expenses.
  • OBM produced 5,185 oz of gold in January 2022 and received significant results from first pass air core drilling.

Gold explorer-turned-producer Ora Banda Mining Ltd (ASX:OBM) has declared the launch of an equity raising of up to AU$20 million. The Company has proposed various exploration programs and continues the ramp-up of the Davyhurst Project with four key deposits underpinning the mine production.

The Company has also shared the latest operational update with January gold production figures and significant assay results from first pass wide-spaced aircore (AC) and reverse circulation (RC) drilling programs undertaken during the second half of CY21.

Source: OBM Announcement 22/02/22

Let us look at these developments.

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Components of Capital Raising

OBM ‘s capital raising program includes an institutional placement to raise up to AU$5 million and a 4 for 13 underwritten accelerated non-renounceable entitlement offer to raise over AU$15 million.

Under the single-tranche institutional placement, OBM will issue up to 100 million new shares to raise up to AU$5 million. Moreover, the entitlement offer will include the issuance of around 300 million new shares.

All the shares shall be issued at a price of AU$0.05 per share, which indicate a

  • 35.1% discount to the last traded price of $0.077 on 21 February 2022; and
  • 27.7% discount to the theoretical ex-rights price (TERP) of $0.069.

Under the placement, OBM shall issue shares to certain sophisticated and professional investors utilising its existing placement capacity under ASX Listing Rules 7.1 (up to 146,133,675 new shares) and/or 7.1A (up to 97,422,450 new shares).

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Under the entitlement offer, OBM will invite eligible institutional shareholders to take part in the accelerated institutional component of the offer, along with the placement.

Besides this, OBM will also invite eligible retail shareholders to take part in the Retail Entitlement Offer at the same price as the placement. OBM shareholders, as on the record date of 24 February 2022, 5:00 pm Western Standard Time, with registered addresses in Australia or New Zealand, may participate in the entitlement offer. This offer will open on 1 March 2022 and close on 17 March 2022, and the new shares issued shall begin trading on 25 March 2022.

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Utilisation of funds and ongoing gold production  

OBM plans to utilise proceeds from the equity raising along with the Company’s current cash balance to finance exploration activities and drilling campaigns to continue resource development, operational enhancements, working capital requirements and meeting costs associated with the capital raising.

During the December 2021 quarter, OBM delivered the best-quarter performance since the restart of Davyhurst operations and produced 17,192oz of gold. Moreover, there has been around 20% improvement from September 2021 quarter with a consistent mill throughput of ~90,000t per month during the December 2021 quarter. Moreover, monthly gold production for January 2022 was 5,185oz.

Source: OBM Announcement 22/02/22

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Mining at Sand King and production guidance

OBM has also commenced mining at Sand King, which is the fourth mine initiated by the Company over a period of 18 months. Moreover, Sand King and Missouri will be the main production sources for the plant in the subsequent year as production from phase one at the Riverina mine completes in the June quarter.

In light of production shortfalls at both Riverina and Missouri, OBM has updated its gold production guidance range for FY22 from the lower end of the earlier guidance range of 70,000oz – 75,000oz to 62,000oz – 68,000oz. This downgrade is also because of the lower-than-anticipated recovered grade at Missouri.

Significant assays from various exploration works

OBM had also initiated initial lithium exploration with 35 samples collected across OBM’s tenure. The Company has now reported assay results that confirm several elevated concentrations of lithium within outcrop and core, including the following:

  • Regional Riverina (Golden Horn Prospect) surface sample 1.24% Li2O
  • Regional Riverina (Sunraysia Prospect) surface sample 1.04% Li2O
  • Regional Riverina (Golden Horn Prospect) surface sample 0.95% Li2O
  • Gila diamond core 0.75% Li2

Source: OBM Announcement 22/02/22

As part of its wider exploration strategy for highly prospective tenements at Davyhurst, OBM shall continue to evaluate the Lithium potential in the future.

Besides these, OBM’s grassroots exploration programs have been continuously delivering favourable results, with the following notable highlights from first-pass air core drilling:

  • 4.0m @ 2.64 g/t Au from the surface (Greater Pacific)
  • 8.0m @ 0.87 g/t Au from 32 m (Greater Pacific)
  • 4.0m @ 3.80 g/t Au from 56m (Sunraysia North)
  • 20.0m @ 1.20 g/t Au from 64m (Sunraysia North)
  • 6.0m @ 0.33 g/t Au from 52m to the end of hole (Kangaroo)
  • 12.0m @ 0.60 g/t Au from 36m (Kangaroo)

OBM is yet to receive further assays that are pending and has planned follow-up drilling to be undertaken in the near future.

Overall, there lies a significant exploration potential for OBM across the deposits and is continuing various activities. The Company is yet to receive assay results at Sunraysia North and the Greater Pacific prospect and mobilise drill rigs there to secure a long-term future for the Company.

OBM’s stock last traded at AU$0.077 on 22 February 2022.



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