Ora Banda Mining has been given the green light to commence mining at its Riverina underground gold deposit near Kalgoorlie after receiving financial investment decision approval from the board of directors.
While the mining decision is still subject to the company securing a capital requirement of about $30 million, the approval supports its 2025 financial year production target of 100,000 gold ounces per annum.
The encouraging news comes just a month after Ora Banda revealed it had doubled the underground mineral resource at Riverina to more than 300,000 gold ounces. The gold producer also announced a maiden ore reserve for the Riverina system near Kalgoorlie of 73,000 ounces at a solid grade of 4.3 grams per tonne gold, with an additional reserve only limited by drilling density at the site.
The updated underground resource now sits at a credible 303,000 ounces at a grade of 4.1g/t gold.
Ora Banda says the development of the Riverina system has the potential to significantly increase production while also lowering costs.
The project has previously struggled with very high all-in sustaining costs (AISC) as high as $2950 an ounce in the December 2022 half-year. But the company says that figure is likely to be snipped down to $2600 an ounce by the end of the 2023 financial year.
However, the green light for the Riverina underground changes all that with the company-wide AISC to produce an ounce of gold now set to drop down to just $1750, against a spot gold price that has recently tested the $3000 mark.
Driving the bottom-line cost-cutting is the company’s AISC estimate solely for Riverina of only $1650 per ounce.
Ora Banda Mining managing director Luke Creagh said: “The approval of Riverina underground is an exciting turning point for the company as we have now pivoted from a turn-around story to a growth company, with a pathway to over 100 thousand ounces per annum in FY25 substantially reducing costs and increasing cashflow.”
With permitting and mining approvals already in place, the company expects to enter steady state production in the fourth quarter of the 2024 financial year at a targeted production rate of 600,000 tonnes per annum.
The current underground resource of more than 300,000 ounces remains open in all directions and a second-phase drilling program will target extensions to the mineralisation envelope further south and at depth. The next phase of exploration is expected to commence within days.
Ora Banda last year oulined a strategic reset after a detailed review of its flagship Davyhurst mining and processing operations, which sit about 120km north-west of Kalgoorlie. Part of the new strategy includes developing the Riverina underground complex based on the existing infrastructure in the area. Ore from Riverina has been processed at Davyhurst with recoveries of about 92 per cent.
Mr Creagh also said: “We consider this very early days in unlocking the Riverina system with next drill program commencing in April expected to extend resources and reserves. The most exciting part of this is that we are only just getting started on what is a highly prospective and under-explored tenement package, with over 100km of defined mineralised trends and numerous high-grade intercepts that have never been followed up.”
Ora Banda has already made impressive progress in its bid to raise its capital requirement to be able to mine Riverina. Earlier this week, it announced it will look to secure $4.2 million in a three-way deal that includes the sale of four non-core Lady Ida tenements to Beacon Minerals, in addition to a new royalty agreement with key investor Hawkes Point.
Last week, the company agreed to sell low-grade gold resources, three existing mining licences, four infrastructure-related licences and two licence applications at Lady Ida to Lamerton Pty Ltd and Geoda Pty Ltd for a cool $10 million.
Ora Banda’s renewed optimism puts the company’s chess piece squarely back on the board after a difficult period. If it can continue to convert Riverina underground resources into mineable reserves, it may well serve as a watershed moment for the company that has been re-invented more than just once.
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By Michael Philipps
