Ora Banda Announces $55 Million Worth of Capital Raising to Accelerate Recommencement of

Production at Davyhurst Project

Summary

• Ora Banda has announced capital raising as a step towards strengthening the final phase of development activities to re-start production at its Davyhurst gold project.
• Ora Banda shall undertake $55 million of capital raising in two phases, including an institutional placement to raise $40 million, and a non-renounceable entitlement offer to raise $15 million.
• The proceeds shall be used for funding ongoing exploration programs across OBM’s significant landholding and much more.

Ora Banda Mining Limited (ASX:OBM) has been actively engaged in carrying out various activities at its Davyhurst gold project and the development of the same. Taking legal advice from DLA Piper Australia, a more significant step by the Company has announced a capital raising worth $55 million to strengthen the final phase of development activities to re-commence production at the Davyhurst project.

The $55 million equity raising comprises of the following:

• Raising around $40 million through a two-tranche institutional placement by issuing up to ~174 million new shares, and
• Raise around ~$15 million by the issue of 66 million new shares under an underwritten one for nine accelerated non-renounceable entitlement offer, further comprising of an Institutional Entitlement Offer and a Retail Entitlement Offer

Related: Ora Banda Mining Announces underground Mineral Resource at Callion, Updates Total Mineral Resource to 2.13M ounces

The issue price for all new shares offered under the equity transactions is $0.23 per new share, indicating 9.80% discount to the last traded price of $0.2550 on 2 July 2020 and 7.18% discount to the TERP of $0.2478.

Institutional Placement

A non-underwritten institutional placement comprises of the following two tranches:

• Tranche 1: Issue of approximately 95,667,216 new shares to sophisticated as well as professional investors pursuant to the Company’s existing placement capacity under ASX Listing Rules 7.1 and 7.1A, and
• Tranche 2: Issue of a minimum of 78,245,828 new shares to the Company’s major shareholder, Hawke’s Point, subject to shareholder approval in the general meeting to be held in late August 2020.

Notably, every new share issued under the Offer shall rank equally with the present fully paid ordinary shares in the Company on the issue.

Related: Ora Banda Reports 46% Increase In The Underground Mineral Resource At Riverina Project

Non-Renounceable Entitlement Offer

1. Institutional Component

A fully underwritten entitlement offer invites the shareholders with registered addresses in the offering jurisdictions. Eligible shareholders can either take up full, none, or part of their entitlement, whereas the Company majority shareholder Hawke’s Point has committed to take up its entitlement.

2. Retail Entitlement Component

Shareholder – which are eligible as per the record date 7 July 2020 and have registered address in New Zealand and Australia will be invited to participate. Fully underwritten Retail component shall remain open from 10 July 2020 to 24 July 2020 and the shareholders can take up either full, none or part of their entitlement.

OBM has appointed Hartleys Limited as the Lead Manager and underwriter for the Entitlement Component, which will be receiving 6% fees for the proceeds received under the entitlement offer with an exception for the shares applied by Hawke’s Point, for which only 2% fees will be issued.

Proceeds to be Used for Re-commencing Production

The proceeds from the equity raising, along with the existing cash balance of the Company are expected to offer significant finances to satisfy the capital costs as well as working capital requirements for the re-opening of production at the project. In addition to this, the funds accumulated shall be utilised toward several activities, including:

• Refurbishment and recommissioning of processing plant
• Site infrastructure, including tailings storage facility, road maintenance and site accommodation;
• First fills and spare parts;
• Pre-production mining costs;
• Exploration programs; and
• Working capital.

Subsequent to the announcement of the Definitive Feasibility Study for the re-commencement of production at Davyhurst, OBM looks forward to commencing production by the first quarter of CY2021.

Recently, to re-start production at Davyhurst Gold Project, OBM had concluded a Definitive Feasibility Study which has shown that a rapid and low-capital path can be undertaken to achieve sustainable gold production at the project.

This is further supported by the significant existing infrastructure at the Project. The study also highlighted robust cash flows and financial returns over a mine life of 5.2 years at the project.

Related: Ora Banda Finalises DFS at Davyhurst Project; Results Indicate Strong Economic Returns

OBM stock was placed in a trading halt on 03 July 2020 and was noted at $0.255 with a market capitalisation of $ 149.77 million.