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Summary
- Ora Banda Mining has been working against the clock towards the advancement of its Davyhurst Gold Project towards production scheduled for Q1 of CY2021.
- The Definitive Feasibility Study confirmed a financially robust development project and the presence of significant infrastructure that reinforces a rapid and low-capex path to production.
- Six deposits at the Davyhurst project strengthen a potential long-life mining operation at the project along with production.
- OBM looks forward to mining five open pits and one underground area in two phases in order to enhance cash flow over the life of the project.
Gold exploration and development company, Ora Banda Mining Limited (ASX:OBM) has been engaged in activities to advance its 100% owned Davyhurst Gold Project towards production.
Robust DFS Outcomes Underpin Recommencement of Production
A significant milestone in the journey towards recommencing production at Davyhurst Project was the completion of the Definitive Feasibility Study (DFS). The DFS at Davyhurst that confirmed a financially robust development project along with the existence of significant infrastructure that is anticipated to propel Ora Banda’s aspirations to pursue a rapid and low-capex path to production.
Moreover, the DFS marks a significant step in the progress of Ora Banda towards realising the significant value that the strategic and prospective landholding of Davyhurst is believed to hold.
June Quarter Update: Ora Banda Mining Boasts Substantial Progress across the June Quarter, Site Works In Progress
The DFS demonstrates the potential for generating strong cash flows and financial returns over a 5.2-year mine life with average projected pre-tax annual free cash flows of $33.6 million, in the wake of a 7-month to the 14-month payback period.
The capital costs required to restart the Company's existing processing plant and mining operations at Davyhurst have been scoped and estimated to cost approximately $45.1 million. Notably, average annual gold production is expected to be 81koz with a low C1 cash cost of $1,427/oz and all-in sustaining costs over the 5.2-year mine life.
OBM looks forward to commencing mining and plant commissioning in the fourth quarter of FY2020, and first gold pour is expected in the first quarter of 2021. Additionally, a ramp-up period to full production is expected to be of three months, and its anticipated to begin from April 2020.
Did you read: Definitive Feasibility Results and Capital Raising Grease the Wheels for Ora Banda to Commence Production at Davyhurst Project
Significant Infrastructure In Place at Davyhurst Project
Along with the DFS, the pre-existing infrastructure at the project validates a rapid and low-capital path to achieving sustainable gold production at Davyhurst Project. The infrastructure includes:
- Conventional CIP process plant
- Accommodation camp for 172-persons
- Extensive haul road network and airstrip
- Administration buildings
- Tailings storage facility
- Core shed and workshops
- Bore fields (process water) and pipelines
OBM has either obtained major approvals and permits or shall obtain in the near term. Moreover, remedial work restart programs have commenced, and an estimated cost of $25.8 million (including contingencies) is expected to be incurred for recommissioning the current facilities and building new facilities.
Overall, the existing infrastructure significantly reduces the capital required to recommence production at the project.
Interesting Read: Ora Banda Mining Ready to Get the Boots on the Ground; Highlights Key Validations from DFS at Davyhurst Project
Six Deposits Underpinning A Potential Long-Life
Six deposits contribute to the initial 5.2-year mine plan underpinning a potential long-life mining operation at the Project. Furthermore, the strong underground Mineral Resources of 0.5 Moz Au provides the opportunity for mine-life extensions below open pit mine designs.
These six deposits include the following:
Source: Company Presentation ASX update dated 09/09/2020
Significantly, in order to optimise cash flow over the life of the project, the Company plans to mine five open pits and one underground area in two phases, including:
- Riverina open pit and Golden Eagle underground in the initial phase of mining and a pre-strip of the Riverina Stage 1 pit shall be undertaken during the pre-production phase.
- Missouri and Sand King shall be the part of the second phase of mining, subsequent to recommissioning and ramping up of the process plant to full capacity.
The ongoing resource definition drilling programs focus on infill drilling that seeks to upgrade existing resources. Lately, Phase 2 infill reverse circulation (RC) drilling program completed at Riverina South validated the extension to Riverina Main Lode mineralisation and remains open along strike to the south and at depth.
Did you read: Ora Banda Reports Significant Increase in Mineral Resources at Riverina Project, A Walk-Through Yearly Developments
Presently, resource modelling is progressing well, and resource estimation work is scheduled to complete in September 2020.
Importantly, Ora Banda remains fully funded, and debt-free with $55 million equity capital raising concluded to finance capital costs and working capital requirements.
Funding Update: Ora Banda Announces Successful Completion of Retail Entitlement Offer, New Shares to Commence Trading on 3 August 2020
On 09 September 2020, OBM share price was noted at $0.350, up by 1.449% with a market capitalisation of $255.51 million.
