Ora Banda Mining Advancing Towards Production At Davyhurst, Open Pit Mining to Start This Week

Summary

• Ora Banda Mining Limited has been seeking to advance production at its Davyhurst project
• The Definitive Feasibility Study undertaken at Davyhurst has confirmed the project to be a financially robust development project.
• The pre-existing infrastructure at the project enables rapid re-start, and six key deposits underpin production at the project.
• Open Pit Mining is expected to commence during the current week as the Company continues to progress with the resource definition drilling programs.

Gold explorer and developer, Ora Banda Mining Limited (ASX:OBM) has been keen towards the advancement of its Davyhurst Project and is suitably positioned to become Australia’s next gold producer.

The Company’s keen interest in advancing the Davyhurst project is backed by

• Robust Definitive Feasibility Study (DFS) that validated Davyhurst as a financially robust development project
• Availability of significant infrastructure in place to facilitate smooth operations
• Adequately funded and debt-free balance sheet to ensure continued exploration
• High-grade Ore Reserve and Mineral Resource of 24.3Mt @ 2.8g/t for 2.2Moz Au underpinning operations

On top of this, the Company’s highly experienced leadership team of professionals strives to bring the organisation’s vision into reality through competent decision making based on their broad set of skills and abundant knowledge.  

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

Compelling DFS Outcomes

The robust DFS returned compelling financial metrics that indicate the potential for strong financial returns for a technically robust re-start with initial gold pour targeted for the first quarter of 2021. Further, the DFS also indicates a strong argument for a fast and low-capital path to attaining sustainable gold production.

Furthermore, DFS indicates the following:

• DFS base case of A$2,100/oz gold price reflecting a significant upside to the current gold price environment
• Post-tax-free cash flow of A$358 million
• Rapid payback of 7 months @ A$2,550/oz Au
• Post-tax NPV6% of A$291 million @ A$2,550/oz Au
• Post-tax IRR of 238% @ A$2,550/oz Au

The study also highlighted free cash flow increases in the early years due to carried forward tax losses of A$258 million. The DFS also indicates the total estimated capital cost of A$45 million, which includes pre-production mine development and contingencies.

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

OBM is optimistic about the average annual gold production 81koz and has a production target of 460koz over initial 5.2-year mine life. Multiple production sources underpin the potential long-life mining operation at the project.

The existing infrastructure at the project includes the site facilities outside of the process plant EPC contract such as permanent camp facilities, tailings storage facility, upgraded communications, upgraded bore-fields and site administration buildings.

1.2Mtpa Davyhurst Processing Plant (Source: ASX Announcement 21 October 2020)

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

Six Key Deposits Underpinning Production at Davyhurst

Further, six deposits contribute to the initial 5.2-year mine plan and all lie within 50km of Davyhurst plant. In addition to this, strong underground Mineral Resources of 0.5 Moz Au2 (3.7 Mt @ 4.4 g/t Au) provides an opportunity for mine-life extensions below open pit mine designs.

The six key deposits that underpin production at the Davyhurst Project are the Riverina, Golden Eagle, Missouri, Sand King, Waihi, and Callion. OBM plans to adopt a conventional approach to the  mining method and schedule.

In order to optimise the cash flow over the 5 plus year life of the project, OBM has plans to carry out mining at the five open pits and one underground area in phases. The initial phase of the mining shall involve Riverina open pit, and Golden Eagle underground and the Company has already commenced pre-production works at Riverina Stage 1.

Interesting Read: Ora Banda Reports Significant Increase in Mineral Resources at Riverina Project, A Walk-Through Yearly Developments

In addition to this, OBM has also initiated the pre-production works at Golden Eagle and seeks to recommission and ramp up the plant to full capacity. Subsequently, OBM plans to undertake the next phase of mining which shall Missouri and Sand King deposits.

Mining activities after this shall involve successive cutbacks at Riverina Stage 2, Waihi and Callion deposits.

Ongoing Activities And Work In Progress

Moreover, there are ongoing resource definition drilling programs that focus on infill drilling and seek to upgrade current resources.

Interestingly, the Company has obtained major approvals and permits to begin work at the project, and remedial work re-start programs are already advancing well. Moreover, current work in progress for OBM comprises of:

• Ongoing Grade Control Drilling Program at Riverina
• Arrival of LNG tank for the new power station on site
• Progressive Construction of mine haul roads
• Upgradation of conveyors to screening plants

Earthmoving Fleet at Riverina (Source: ASX Announcement 21 October 2020)

The earthmoving fleet has arrived at Riverina and OBM is all set to begin Open-pit mining during the current week.

Detailed Discussion at: Ora Banda Mining Ready to Get the Boots on the Ground; Highlights Key Validations from DFS at Davyhurst Project

OBM share price remained unchanged on 21 October 2020 at $0.335 with a market capitalisation of $ 280.86 million.