A detailed Overview of Ora Banda Mining’s March Quarter 2020 Activities at Davyhurst project

Gold exploration company, Ora Banda Mining Limited (ASX: OBM), advancing its district scale Davyhurst Gold Project (Figure 1) on the greenstone belt of Western Australia, has released an update for the March Quarter 2020. The Company continued implementing its planned infill resource definition drilling, resource upgrade and Mining Reserve delineation program and commenced exploration drilling, closing the quarter with a strong well-capitalised balance sheet with no debt and cash of ~$14.752 million. Various procedures and protocols related to COVID-19 were also developed and implemented during the period with no confirmed cases reported.

March Quarter 2020 – key Highlights

Resource and Reserve Drilling

Two RC drill rigs and two diamond drill rigs completed 8,885 m of RC drilling and 4,625 m of Diamond drilling at Ora Banda’s Davyhurst Gold Project for a combined total of 13,510 drill metres as the drill and assay costs remained broadly in line with budget.

Ora Banda Mining remains focussed on validating both the technical and economic viability of mining and processing ore from five advanced projects being Riverina, Waihi, Siberia, Callion and Golden Eagle, which are well-understood geologically and located close to the Davyhurst Processing Plant (@ 1.2Mtpa). Of the Company’s current global Mineral Resource of 23.5 Mt @ 2.6g/t Au for 1,980,000 oz Au, the combined updated Mineral Resource and Reserve totals for these five priority targets are a Mineral Resource of 11.3 Mt @ 2.7g/t Au for 995,000 oz Au and a Mining Reserve of 2.8 Mt @ 2.3g/t Au for 213,000 oz Au (Siberia Project only).

The primary objective of the recent resource and reserve definition drilling programs was to expand and upgrade the known resources at five priority targets and deliver a robust five-year mine plan that envisages both open pit and underground mining operations.

Riverina

• Located 48 km from processing plant and presents a significant opportunity for near-term low-strip open pit oxide production.
• The Riverina Mineral Resource Estimate (MRE) was updated on 2 December 2019.
• Phase 2 of the Riverina infill drilling program completed and returned outstanding assay results.
• Results from the Phase 2 drilling program have been incorporated in an updated iteration of the Riverina MRE.
• During the quarter, a series of geotechnical and metallurgical drill hole were also completed.

Waihi

• A well-established mining centre located 3 km from processing plant and will provide additional open pit production by way of a significant open pit cut back.
• It comprises the historical Waihi, Homeward Bound and Golden Pole deposits where the MRE was updated to 2.46 Mt @ 2.6 g/t Au for 206,000 ounces after an extensive resource drilling program, completed in January 2020. It depicted a 190% increase in the previously reported resource.
• A 13 hole near mine RC exploration program for 1,607 metres was drilled in the month of March 2020 with results including 4.0m @ 15.0g/t from 8.0 metres (WHRC19111) and 3.0m @ 2.89g/t from 69 metres (WHRC19099).
• Two 120m geotechnical diamond holes were drilled and logged by the Company’s geotechnical consultant.

Callion

• Located 14 km to the south west of Davyhurst processing plant and presents a significant opportunity to source near-term high-grade ore from both open pit and underground areas.
• Callion has a published resource of 0.2 Mt @ 2.6 g/t for 14,000 contained ounces.
• Callion drilling program Phase 1 completed during the quarter (10 RC drill holes for 1,371 metres) while the first batch of assay results from previous quarter drilling were receive in mid-January 2020.
• An additional Phase 2 drill program (22 RC holes, 3,334m) was also completed and assays from resource definition programs at Callion were used for MRE work.
• Geological and mineralisation interpretation continued during the quarter and an updated Callion MRE is scheduled for completion in early May 2020.
• Five geotechnical diamond drill holes (681.1m) were completed and geotechnically logged to define pit design parameters.
• For Callion deposit, the primary conceptual plans include an open pit cut back, re-establishing access to existing underground mine workings, rehabilitation of existing underground mine development and working on new high-grade areas below the historical mine workings.
• One, CNDD20002, of the three metallurgical diamond drill holes drilled returned outstanding assay of 6.7m @ 26.78 g/t from 78.8m.

Siberia

• Located 37 km southeast of processing plant and comprises both the Sand King and Missouri open pits.
• A 16-hole drill program (Six RC holes for 630m and 10 diamond holes for 1,531.4m) was completed at Sand King to close down drill hole spacing in several specific structurally complex areas along the lower boundary of the currently designed pit.
• The assay results, received during the quarter, were in line with expectations and gold mineralisation was intersected where expected, largely confirming the existing mineralisation interpretation.
• The assay results are being utilised into an upgraded Mineral Resource and Mining Reserve estimate.

Golden Eagle

• Located approximately 2 km west of the Company’s processing plant at Davyhurst.
• Surface drilling testing the northern down plunge extension of the mineralised structure commenced in December 2019 and completed in February 2020.
• By March quarter end, around 1,173.8 metres of drilling completed.
• During the quarter, Ora Banda began updating the underground resource model using recent underground face sampling and all recent drilling results, excluding the down plunge area referred to above. The MRE was announced on 8 April 2020 and totalled 393,000 tonnes at 3.9g/t for 49,000 ounces.

Resource & Reserve Modelling Update

Throughout the quarter, Ora Banda’s employee ramp-up continued with additional technical staff engaged to ensure the development of resource models, upgrading of Mineral Resource statements, development of mine plans and Mining Reserve statements in a timely manner.

Waihi: On 4 February 2020, an updated Resource Statement was published for Waihi, which now has a Mineral Resource of 2.46 Mt @ 2.6 g/t Au for 206,000 ounces Au. The Waihi open pit Mineral Resource estimate is based on a gold price of AUD 2,400² per ounce, a lower block cut-off grade of 0.5 g/t Au and is physically constrained to the area within an optimum AUD 2,400 per ounce open pit shell that extends to a depth of 140 metres. Besides, the underground Mineral Resource estimate for Waihi is limited to the area beneath the optimum AUD 2,400 per ounce open pit shell but with a higher block cut-off grade of 2.0 g/t Au to reflect the increased cost of underground mining.

Whittle optimisation runs to determine maximum NPV recoverable from Waihi have been completed and the Waihi pit design is near final.

Callion: During the quarter, all outstanding assay results from Callion resource definition drilling were received. At the same time, geological interpretation and wireframing of mineralised lode system at Callion were also finished and results, together with assays, have been incorporated into a new mineral resource model for this deposit. Currently, a third-party development and verification of the Callion resource model is underway.

Sand King: For the updated Sand King resource model and calculation of a new open pit Mineral Resource estimate, the assay results from the additional 16 holes drilled at Sand King were utilised. Consistent with input parameters used by the Company in calculating open pit resources at other key open pit locations, the subject of this DFS (gold price of AUD 2,400 / oz and lower cut-off grade of 0.5 g/t Au), these input parameters have been used in delineating the updated Sand King Resource

Whittle optimisation runs has been completed and the optimum open pit design updated at Sand King.

Regional Exploration

Ora Banda also continued with regional exploration during the quarter. With the completion of the resource development drilling, the focus turned to exploration drilling with 5,622 RC metres drilled at an all up cost of AUD 72/metre at various prospects including Siberia South, Riverina South, Young Australia and Python.

Davyhurst, Riverina, Mulline

• Planning was well advanced for pXRF study of representative cross-sections at Waihi.
• An exploration drilling program over the Riverina South area was completed, targeting a 1km long, highly-prospective strike extension corridor, comprising 32 drill holes for 3,645 metres, reaching a maximum depth of 150 metres.
• On the Mulline Trend, a RC drill program, comprising Seven holes (PTRC108 – PTRC114) for 829 metres was completed at Young Australian.
• Drill planning is ongoing south along the mineralised trends within the Mulline Project.

Mt Ida

Ora Banda commenced a detailed exploration and prospectivity review of the entire Mt Ida project in mid-February 2020. An initial drill program has been planned with drilling scheduled to commence early in the June quarter period.

Siberia

During the reporting period, an auger drilling program targeting the calcareous horizon within the soil profile was undertaken on M24/848 with 325 samples collected. In addition, Two RC drilling programs were undertaken at Siberia including a total of four holes for 386m at the Equator prospect on M24/845.

Lady Ida

An auger drilling program targeting the calcareous horizon within the soil profile was undertaken over part of the Lady Ida project area to infill gaps in the current surface geochemical coverage. A total of 1,195 samples were collected and have been forwarded to Intertek in Kalgoorlie for Gold and a 33 Multielement suite analysis.

In addition, a total of two holes for 216m were drilled at the Flame Prospect on E16/344, to follow up previously untested anomalous RAB intercepts south of the Olympic Torch prospect - 3m @ 1.3g/t and 5m @ 0.5g/t Au. Samples have been submitted to Nagrom for Gold and Arsenic analysis.

The Company would utilise these upgraded Mineral Resources and Mining Reserves into the Definitive Feasibility Study (DFS) that is currently being finalised. This would help in establishing a sound business case to return the Davyhurst Gold Project to production.

The Processing Plant remained on care and maintenance during the reporting period and GR Engineering Services (GRES) is carrying out a detailed condition reporting, engineering evaluation and studies that will form the basis of re-commissioning program.

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Stock Performance: The OBM stock closed the trading on 1 May 2020 at $ 0.190, with a market cap of ~ $ 117.46 million.