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Highlights
- Ora Banda Mining Ltd (ASX:OBM) closed 2024 with a cash balance of A$57.8 million and a fully paid-off flagship Riverina Underground operation.
- Sand King Underground achieved first ore within four months, set to contribute significantly to gold production in the second half of FY25.
- The company aims to scale production to 150,000 ounces annually by FY26, driven by operational efficiencies and infrastructure improvements.
Ora Banda Mining Ltd (ASX:OBM) concluded 2024 on a high note, showcasing a financially solid position with a cash reserve of A$57.8 million. The company’s flagship Riverina Underground operation, part of the Davyhurst Project in Western Australia, is now fully paid off and generating strong cash flows within just 18 months of operations commencing.
Operational Excellence and Strategic Focus
The December quarter highlighted the effectiveness of Ora Banda’s underground mining strategy, which delivered robust results despite significant investments in capital, resource development, and exploration. During this period, the Riverina Underground not only recouped its initial capital investment but also contributed to positive cash flows, bolstered by mined grades that exceeded forecast expectations.
The Sand King Underground operation also made significant strides, intersecting first ore just four months after the portal’s setup. Production ramp-up is progressing as planned, with expectations to deliver up to 21,000 ounces of gold in the second half of FY25.
Strong Production Metrics
Ora Banda reported gold production of 22,973 ounces for the December quarter, bringing the first-half FY25 total to 47,300 ounces. During the period, the company sold 22,288 ounces of gold, resulting in cumulative gold sales of 47,824 ounces for the first half.
The Davyhurst mill processed 280,000 tonnes of ore during the quarter, a 9% improvement over the previous period, reflecting the benefits of recent upgrades. Medium and high-grade ore from Riverina accounted for 41% of the mill feed, while low-grade legacy stockpiles comprised the remainder. As higher-grade material from Sand King comes online in the second half of FY25, the company expects increased production and reduced costs.
Cost and Financial Performance
All-in-sustaining costs (AISC) for the quarter stood at A$2,536 per ounce sold, with factors such as non-cash share-based payments and the processing of higher-cost open pit stockpiles influencing the figure. Importantly, the depletion of low-grade stockpiles positions the company for more cost-effective operations moving forward.
Closing cash increased by A$9.1 million from the previous quarter, leaving the company well-funded to pursue growth initiatives. Available inventory at the end of the quarter totaled 7,500 ounces, including 3,300 ounces in gold-in-circuit.
Growth Outlook and Strategic Ambitions
With planned infrastructure improvements and consistent output from Riverina Underground, Ora Banda is on track to enhance its operational efficiency. The advancement of Sand King Underground toward steady-state production is expected to further bolster the company’s production profile.
Ora Banda aims to achieve an annual gold production rate of 150,000 ounces by FY26. This growth ambition is underpinned by continued operational performance, ongoing exploration success, and strategic infrastructure upgrades.
The company’s managing director emphasized the significance of Riverina Underground’s rapid repayment and its role in funding future growth. Additionally, the integration of high-grade feed from Sand King is anticipated to strengthen production metrics while reducing costs, paving the way for a stronger financial and operational performance in the coming periods.
Ora Banda Mining remains well-positioned to capitalize on exploration opportunities and deliver value across its portfolio, leveraging its financial stability and operational momentum to achieve long-term growth.
