Ora Banda Mining has supercharged its gold production ambitions, setting a new target of 150,000 ounces in the 2026 financial year (FY26) following the board’s final investment decision (FID) to push on and develop its new Sand King underground mine in Western Australia’s Goldfields region.
The pivotal move cements Sand King as the company’s second underground operation at its Davyhurst gold project that lies 120km north-west of the historic WA regional gold mining hub of Kalgoorlie.
The company this morning confirmed it is set to inject about $39 million into the Sand King project, with a maximum cash drawdown of $32 million. The investment will be covered by the operating cash flows from Riverina – its other underground mine at Davyhurst – and existing cash reserves.
Portal development is scheduled to begin in the September quarter, with first development ore expected by December and stoping operations to begin in next year’s March quarter. The mine is expected to reach a steady production state of 60,000 ounces per annum by June next year.
Ora Banda Mining managing director Luke Creagh said: “This is a very exciting time for the Company as the Ora Banda team has achieved a significant amount in a short period, finding two underground mines in less than two years since changing strategies – a success rate which also indicates the significant prospectivity of the belt. Our DRIVE to 150 plan to target 150,000 ounces in FY26 firmly places us on the pathway to becoming a mid-tier gold producer and the most exciting part is that we are only just getting started on unlocking this highly-prospective and underexplored tenement package.”
After exceptional drill results earlier this year, the Sand King underground resource has increased by 176 per cent to 3.4 million tonnes at 2.8 grams per tonne gold for a total of 306,000 ounces – a significant leap from the previous 110,000 ounces.
Keen to capitalise on the rapid resource growth, the company has also planned an extensive 45,400m underground drilling program that is set to kick off in the December quarter. It will be designed to further expand the resource base, while exploring new underground targets.
Ora Banda has also unveiled its production guidance for the current financial year, projecting an output of between 100,000 and 110,000 ounces at an all-in sustaining cost (AISC) ranging from $1975 to $2125 per ounce. The company has earmarked $25 million for exploration, concentrating on the Riverina trend and Sand King mineralisation, alongside a growth capital budget of $63 million.
Management believes the board’s approval of the Sand King underground mine will propel Ora Banda towards the target of 150,000 gold ounces by FY26, with an AISC of between $1740 and $1890 per ounce. That represents a 40 per cent year-on-year production growth from FY23 to FY26, promising significant free cash flow amid a favourable gold price environment.
Today’s Australian gold price is sitting higher than $3523 an ounce.
Ora Banda’s decision to develop Sand King has signified a pivotal new shift for the company, enhancing its operational flexibility and reducing dependence on a single mining operation. The increased production and reduced AISC are attributed to the higher-grade ore from underground mines, leading to improved profitability and resource utilisation.
Management’s strategic focus now includes an aggressive exploration program and infrastructural enhancements to ensure long-term growth. Ora Banda has allocated up to $40 million for exploration in FY26, with a mission to target high-grade deposits that promise to extend the life and expand the scope of its operations.
The Davyhurst gold mine, originally built by Western Mining in 1986, has had a rich history of ownership over the years, but has returned only limited success. However, in the three years since Ora Banda’s acquisition and recapitalisation in 2019, the mine has produced in excess of 150,000 ounces of gold, helped primarily by a buoyant gold price that has sat north, for the most part, of US$2000 (AU$2958).
With the Sand King underground set to play a crucial role in Ora Banda’s future, the company is poised to deliver robust production growth and shareholder value, positioning it as a re-emerging force in the WA gold mining sector.
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By James Pearson
