Ora Banda Sitting On The Best Performing Asset Class-Gold

  • Nov 04, 2019 AEDT
  • Team Kalkine
Ora Banda Sitting On The Best Performing Asset Class-Gold

Ora Banda Mining (ASX: OBM) is a gold exploration and development company with a large and highly prospective landholding within the Tier 1 Gold Mining Jurisdiction of Eastern Goldfields in Western Australia.

Exploration Overview

The company’s portfolio comprises six projects spanning across 1,336 km2 along a 200 km strike on the greenstone belt along with an existing @1.2Mtpa Processing Hub with recommissioning cost (GRES EPCM estimate) of only $ 8.5 million and timeframe of 24 weeks, marking a low cost restart which limits dilution, giving Ora Banda a big edge as it fast tracks the schedule.

The initial five priority targets located within different project areas include Waihi, Riverina, Callion, Siberia and Golden Eagle, containing a high-grade Resource of 9.2Mt @ 2.8g/t for 840koz. The current exploration program being undertaken by the company includes infill and extensional drilling of these high priority resources together with a regional exploration program testing a number of advanced prospects. The key objective of these programs is expansion and upgradation of the known resources and then subsequent outlining of a well-defined 5-year mine plan that would include both open pit and underground mining operations.

READ here for details: Ora Banda’s Dynamic and Momentous September Quarter 2019

Ora Banda Mining had its securities requoted on the ASX on 28 June 2019 with the $ 30-million recapitalization process. The company is well-capitalized with strong cash balance of $ 20.64 million as at 30 September 2019, to aggressively further its planned resource drill out, Definitive Feasibility Study (DFS) and regional exploration programs over the next 12-month period.

Right Commodity, Right Time: Gold

Over the last one year, Gold prices have been trending at near record highs of +AUD 2,000 per oz. The prices of gold continue to stay above the new psychological base level of AUD 2,150 per oz, which is very beneficial and supportive for the ASX gold mining stocks.

Currently, the Australian gold miners are reaping high convenience yield and ramping-up the production while aspiring miners are utilizing the leverage to develop gold prospects, which is expected to maintain Australia’s position as the world’s second-largest gold producer.

What led to Gold’s performance to be extraordinarily good?

The year 2019 commenced with the unresolved Brexit and persisting trade & technology dispute between world’s two superpowers, the USA and China, which has had noteworthy impact on other economies, leading to increased uncertainty and volatility in the global market and serious consequences for business and investment decisions by market players. In addition, major Central Banks have been slashing bond yields (negative in some cases) to prepare for a recession scenario.

In case these measures fail to boost demand and cause significant inflation, people flock to the yellow shiny metal which has long been used as a hedge against downturns as Gold shines best in times of genuine crisis and maintains its purchasing power unlike normal currencies.

As a result, the last few months saw increased buying from the global gold-backed exchange traded funds (ETFs), the central banks pulling up the gold reserves, and individual investors seeking to gain exposure to business models of gold miners, also opted for gold mining stocks.

The gold spot price in Australia, hit a peak of $ 2,322.18 (Day’s high on 26 August 2019) and is currently sustaining and consolidating in the band range of $ 2,250.00- $ 2,170.00 per oz.

All in all, the signs of slowing economic growth amidst Fed rate tightening and other geo-political issues, have renewed interest in gold more than ever. Whenever the market is struck by violent storms, gold provides a safe haven.

Given that, the positive outlook for gold will have positive implications for Ora Banda Mining as the company advances towards commercial production in the time to come.

Gold Applications: Metal of Choice for Many Industries

Gold, with diversified properties, is one of the most coveted metals in the world that finds applications across industrial, medical, and technological fields. It does not tarnish, conducts electricity and is well malleable. Some of the uses include-

  • Making of Jewelry and Ornamental objects;
  • Financial Gold: Coinage, Bullion, Backing;
  • Manufacturing of Electronics products including cell phones, calculators, personal digital assistants, global positioning system (GPS) units, etc;
  • Gold in Dentistry;
  • Treatment of few medical conditions;
  • Aerospace Vehicles;
  • Awards & Status Symbols;

Going forth, the combination of the need for sophisticated and reliable materials, growing demand, few substitutes, and limited supply is expected to steadily increase the importance of this metal.

Stock Performance

Ora Banda Mining has a market capitalization of around AUD 95.2 million with approximately 543.98 million shares outstanding. On 4 November 2019, the OBM stock ended the day at AUD 0.170 down 2.857% from previous close. OBM has also delivered a year to date return of 9.38%.


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