Australian Gold explorer Ora Banda Mining Ltd (ASX: OBM) has released its half year report for the six months to 31 December 2019, whereby the company’s principal activities were mineral exploration, evaluation and development related to the flagship Davyhurst Gold Project, which is a “District Scale” project spanning 1,336 km2 and covering a 200 strike km of the highly-prospective greenstone belt in Western Australia’s Eastern Goldfields.
Operational Highlights – Half Year FY20
Ora Banda’s ongoing exploration programs comprise infill and extensional drilling of the high priority deposits (Riverina, Waihi, Callion, Siberia and Golden Eagle) that present a great near-term production opportunity; a regional exploration program examining a number of advanced prospects; and upgradation of the known resources to outline a well-defined 5-year mine plan encompassing both open pit and underground mining operations.
During the half year, the company continued with care and maintenance of 1.2 Mtpa Processing Facility at the Davyhurst site, and also its historically producing gold mine at the Mt Ida Gold Project. A full clean-up of the processing plant area was completed, prior to the implementation of a care and maintenance program prepared by GR Engineering Services (GRES) in early 2020.
Resource definition drilling operations saw two RC drill rigs completing 17,840 metres and two diamond drill rigs completing 6,434 metres for a combined total of 24,274 drill metres.
The Company is examining both the technical and economic viability of mining and processing ore from the five advanced prospects, all of which are well-understood geologically and which are close to the Davyhurst processing plant.
A mineral resource increase at Riverina deposit, announced in December 2019, delivered an uplift in the Company’s Mineral Resource statement to 22.2Mt @ 2.6g/t for 1.85 million ounces of contained gold with further updates pending. For the Siberia project, the Reserve position totalled 2.8Mt @ 2.3g/t Au for 213,000 ounces. Ora Banda expects reserves to be declared at the other four projects in the near term.
Resource Definition Drilling Overview: The upgraded mineral resources and reserves would be fed into a Definitive Feasibility Study (DFS) that is due for completion in June 2020. Other objective of drilling is to quantify the technical aspects of each of the five deposits, such as metallurgical and geotechnical parameters, that are required for the DFS as well. The intensive drilling programs progressed well during the reporting period.
- Riverina (Located ~ 48 km from the processing plant)
The Riverina infill drilling program Phase 1 which was completed during the review period (80 drill holes for 6,267 metres) and aimed at reducing overall drill spacing on the three primary lodes at Riverina (Main, Murchison and Reggie lodes) to ~20 metre centres within the Main Mining Area. The assay results were consistent with the Company’s pre-drilling expectations and support the robust nature of gold mineralisation with a combination of narrow high-grade intercepts and broader lower-grade zones intersected across the three primary lode systems.
- Waihi (Located ~ 3 km from the processing plant)
The Waihi prospect comprises the historical Waihi, Homeward Bound and Golden Pole deposits. Phase one of Waihi resource definition infill drilling program involved delineation and updating of an optimal open pit Mineral Resource at Homeward Bound and Waihi deposits. The Company also conducted additional drilling targeting open pit extensions to the north and south of the existing open pit, and also the potential for underground resource extensions at depth.
During the half year, the Company had also engaged a structural geological consultant who completed a detailed review of the Waihi deposit and surrounding areas. This specialised input largely helped in drill targeting and advancement of a structurally dominated mineralisation model. Further development and understanding of the structural controls at Waihi remain an ongoing focus for Ora Banda Mining.
- Callion (Located ~ 13 km from the processing plant)
The Callion open pit is ~650 metres (long) by ~40 metres (deep). Underground workings for the same are extending to a vertical depth of 220 metres beneath surface and off to the southern end of the pit. The deepest high-grade diamond drill hole result recorded from Callion to date (CS6W1 – 10.5 metres @ 17.2 g/t) sits ~ 420 metres vertically below surface and nearly 200 metres vertically below the base of the existing mine workings.
Drilling at Callion focussed on the open pit and immediate remanent underground resource. Future exploration will target mineralisation that remains open at depth.
For the Callion priority deposit, Ora Banda has planned an open pit cut back, re-establishment of access to existing underground mine workings, rehabilitation of existing underground mine development and the development & extraction of new high-grade areas below the existing mine workings.
- Siberia (Located ~ 39 km from the processing plant)
Siberia encompasses both the Sand King and Missouri open pits with no Resource or Reserve drilling undertaken during the review period. Recently in early 2020, Ora Banda commenced a 16-hole infill drill program (600 metre RC and 1,400 metre diamond) at Sand King to infill resource areas below the base of the existing open pit.
- Golden Eagle (Located ~ 2 km from the Processing Plant)
Surface drilling to test the northern plunge extension of the mineralisation commenced at Golden Eagle during the review period. A total of six (6) RC pre-collars were completed across two drill lines for 870 metres in total. As at 31 December 2019, three diamond tails were completed for 616 metres and varying amounts of alteration and quartz-Sulfide were encountered across the holes. Golden Eagle core is currently being processed.
The company envisions a production of ~100,000 oz of gold per annuum from 2021 onwards from these priority deposits.
Capital Raising: Ora Banda raised $18.5 million (before costs) in 16 August 2019 via the issue of 100 million new fully paid ordinary shares at 18.5 cents each, receiving strong support from both the existing Ora Banda shareholders and new sophisticated and professional investors. Thus, a number of new institutional shareholders were added to the Company’s register.
Small Shareholding Sale Facility: Also, in August 2019, the Company had established a small shareholding sale facility to provide shareholders, with holdings less than $ 500 (Unmarketable Parcels) in value, with an opportunity to sell their interest without having to pay brokerage /handling costs. On 24 October 2019, Ora Banda announced completion of the small shareholding sale facility, whereby 643,882 fully paid ordinary shares (79%) were sold out of the 812,878 fully paid ordinary shares comprising the Unmarketable Parcels at Record Date (6 August 2019).
Ora Banda’s net loss stood at $ 5.17 million for the half-year ended 31 December 2019 (Half-year ended 31 December 2018: $ 17.52 million). No asset impairment losses were recognised during the half year.
Besides, the Company recorded $ 4.76 million in mine development expenditure, down from $1.56 million incurred as at 30 June 2019; and acquired plant and equipment at $ 0.11 million (Year ended 30 June 2019: Nil). The net operating and investing cash outflows amounted to $ 8.87 million, which was funded by cash of $ 14.14 million at 1 July 2019 and cash inflows of $ 17.67 million from share issues.
Ora Banda closed the half year with a strong cash balance of $ 22.86 million as at 31 December 2019.
Stock Performance: Ora Banda Mining’s market cap is ~$ 64.51 million with 586.42 million shares outstanding to date. On 16 March 2020, the OBM stock settled the day trade higher at A$ 0.115, zooming up 4.54% by $ 0.005 with ~ 299,283 shares traded.
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