Ora Banda Mining produced 22,973 ounces of gold in the December quarter at 2.9g/t, totalling 47,300 ounces for the half year. All-in sustaining costs rose 14.7pc to $2536 due to processing residual low-grade ore. With the Riverina mine paying for itself inside 18 months, Sand King is set to boost output to 150,000 ounces annually by June. Cash reserves grew by $9m to $57.8m.
Ora Banda Mining has capped off 2024 with a stellar performance at its Davyhurst gold project in Western Australia, producing an impressive 22,973 ounces of gold in the December quarter and pushing its half-year total to a solid 47,300 ounces.
The company is now sitting on a cash hoard of $57.8 million, up $9.1m on the quarter despite having spent more than $30m in growth projects.
While production was slightly below the first quarter’s output of 24,327 ounces, the dip was largely attributed to processing some of the remaining lower-grade stockpiles and lower-grade Riverina ore.
The low-grade material, which made up 59 per cent of the throughput, decreased the overall head grade by 14.7 per cent to 2.9 grams per tonne (g/t) gold. High-grade ore processed from its underground mine still managed to hit a remarkable average grade of 4.9g/t gold.
The company says the lower-grade material will be progressively replaced as the higher-grade ore starts to flow through from its new Sand King underground mine.
When fully operational, the high-grade ore from Riverina and Sand King is set to supercharge production, with the company aiming for an impressive 150,000 ounces annually by the 2026 financial year.
At the Davyhurst mill, throughput increased 9 per cent to 280,409 tonnes, reflecting steady improvements to the plant, which management says are still progressing. This hints at further performance benefits to come.
Costs were 11 per cent higher than the previous quarter at $2,536 per ounce, although the numbers reflected a one-off $116 per ounce non-cash share-based payment and $183 per ounce cost for treating the higher-cost open pit stockpiles that are now largely depleted.
Ora Banda Mining managing director Luke Creagh said: “It is a testament to the quality of Riverina Underground that it has paid itself back in just 18 months and is now delivering strong cash flows which will self-fund Ora Banda’s production outlook towards 150,000 ounces in FY26. As the business strengthens and the results start to come through on our exploration programs, we will be in a position to rapidly advance any additional opportunities that exist in our portfolio.”
At Riverina, the company managed to mine 1839 development metres for the quarter, of which 1250 were operational and progress was in line with expectations. The reserve grade continued to surprise on the upside, with development ore coming in at 4.9g/t gold and stoping ore clocking up an impressive 5.5g/t gold.
More remarkably, the ore processed to date from underground operations has now fully repaid the Riverina capital expenditure, just 18 months since opening the portal to the mine.
At Ora Banda’s newer Sand King underground mine, first ore was hit in December, setting the stage for steady-state production in the next few months. With a capital expenditure of $39m, funded from existing cashflow, Sand King should be stoping by March and in full production by June, targeting a steady annual production rate of 60,000 ounces of gold.
With Sand King moving into first production shortly, management says the company will soon hit a pivotal moment as the higher-grade feed from Sand King starts to fill the Davyhurst mill, leading to increased production and cashflow while reducing costs.
With $5.5m earmarked for investment capital in the coming quarter, including a 14,000-metre drill program to bolster its resources at Riverina and Sand King, Ora Banda appears to be hitting its straps.
As any gold miners worth their salt will remind you, timing can play a big part in the gold mining game. It seems Ora Banda has taken good note of that advice in preparing for a 50 per cent jump in production in the next six months on the back of a soaring gold price, currently trading at US$2695 ($4349) per ounce.
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