Summary
- Ora Banda had delivered a Definitive Feasibility Study which indicated a solid case for a rapid and low-capital path to achieving sustainable gold production at Davyhurst.
- OBM also announced an increase in Maiden Underground Resource at Callion- reached 77,000 ounces and for Riverina- reached 139,000 ounces, respectively.
- OBM also drilled 15 prospects with a total of 15,180 metres during the quarter.
- Recently, OBM has completed a capital raise and is actively engaged in resource drilling and regional exploration activities presently.
Gold exploration and development company, Ora Banda Mining Limited (ASX:OBM) has undertaken several activities across its projects over the June quarter to substantially grow its Resource as well as Reserve base. Moreover, GSN also completed a Definitive Feasibility Study (DFS) to reinforce the re-commencement of production at its Davyhurst Gold Project and progressed with an aggressive exploration work.
Let us look at the activities undertaken by OBM during the quarter ended 30 June 2020.
During the quarter, OBM delivered a DFS that validated a robust case for a rapid and low-capital path to achieving sustainable gold production at Davyhurst. Strong cash flow generation and financial returns over a 5.2-year mine life with average estimated annual free cash flows of A$68.8 million at a gold price of A$2,550/oz are estimated through the DFS.
OBM plans to commence plant commissioning in the fourth quarter of CY20 and initial gold production is targeted for the first quarter of CY21.
Detailed discussion at: Ora Banda Mining Ready to Get the Boots on the Ground; Highlights Key Validations from DFS at Davyhurst Project
Moreover, OBM anticipates several production sources to underpin a probable long-life mining operation at the Project. The first phase of mining shall involve the Golden Eagle underground and Riverina open pit.
Feasibility Ultimate Pit & Underground Designs (Source: ASX Announcement)
OBM has been proactively engaged in obtaining key approvals and permits while some are anticipated to be obtained in the upcoming two months. While all assumptions incorporated in DFS still apply, the Company will continue to enhance the current DFS parameters and include latest technical and cost information and trade off studies.
Source: ASX Announcement
Source: ASX Announcement
Source: ASX Announcement
Maiden Underground Resource of 77,000 ounces at Callion
During the quarter, OBM reported Maiden Underground Mineral Resource totalling 411,000 t @ 5.8 g/t Au for 77,000 oz Au at Callion, further complementing the lately announced open pit resource 269,000 t @ 3.5 g/t Au for 30,000 oz Au and increasing total upgraded Callion Mineral Resource to 680,000 t @ 4.9 g/t Au for 107,000 oz Au.
Presently, mineralisation is still open down plunge of the known resource areas, and robust potential persists for additional resource growth with further drilling.
Detailed discussion at: Ora Banda Mining Announces underground Mineral Resource at Callion, Updates Total Mineral Resource to 2.13M ounces
46% Growth in Riverina Underground Resource
Another noteworthy development for OBM was an increase of 46% to the underground Mineral Resource for Riverina to 728kt @ 5.9 g/t Au for 139,000 ounces, resulting in a 16% (44,000 ounces) increase in total Mineral Resource to 3.7Mt @ 2.7g/t Au for 322,000 Au ounces at Riverina.
Intending to define the economic parameters around an underground mine, OBM is continuing the upgraded underground Resource.
Resource Upgrade at Golden Eagle
Over the June quarter, OBM upgraded existing Golden Eagle Resource indicating the potential to mine this deposit by conventional underground mining methods by upgrading to 393kt at a substantially higher grade of 3.9 g/t Au for 49,000 ounces of contained gold.
Based on a gold price of A$2,400 per oz Au, a cut-off grade of 2.0 g/t, this increase in the underground Mineral Resource estimate has been derived following the input of
- Drilling results received since the previous resource was quoted
- Recent underground face sampling information together with the application of various constraints including modifying factors for potential underground operations
OBM believes that the mine at Golden Eagle is well established with capital decline development approaching 150 vertical metres below the surface and 85 metres below the portal and ore development is well established on four levels.
Detailed discussion at: Ora Banda Mining completes Resource Upgradation at Priority Target Golden Eagle
Regional Exploration Reverse Circulation Drilling Campaigns
For the June quarter, over 15 prospects comprising 3,448 air core metres, 11,587 reverse circulation percussion metres and 145 diamond core metres was drilled as shown below:
Source: ASX Announcement
- Flame Prospect is interpreted to lie on the same mineralised trend as the Golden Lode deposit and has been under explored till date
- Young Australian prospect intersected multiple zones of quartz-sulphide veining accompanied by biotite-chlorite-sulphide alteration through drilling
- Golden Eagle Deposit completed eight RC holes with diamond tails between December 2019 and March 2020 with the following significant results:
- 5.6m @ 3.2 g/t Au from 207.4m (GEDD20001/Footwall Lode)
- 2m @ 6.5 g/t Au from 250m (GEDD19004/Footwall Lode)
- 2.3m @ 7.5 g/t Au from 343.2m (GEDD19006/Main Lode)
- 2.1m @ 12.9 g/t Au from 350.9m
- Sand King Deposit is one of five key priority mining targets at the Davyhurst Project and has a current Mineral Resource of 2.45Mt @ 3.4 g/t Au for 268,000 ounces
All Round Development Across OBM
OBM has been employing proactive methods for promotion of its activities such as the adoption of virtual marketing in light of travel restrictions imposed due to COVID-19.
In order to fund a return to production at Davyhurst, OBM announced a A$55 million equity capital raising subsequent to the June quarter. Moreover, OBM’s capital raising was well-supported by existing shareholders as well as new institutions, and the capital raising was successfully completed.
In addition to this, OBM awarded an EPC contract to GR Engineering Ltd for undertaking remedial works required to return the Davyhurst gold processing plant to a fully operational status. To recommence site works, preparations are currently underway.
OBM boasts a robust and well-capitalised balance sheet that has zero debt and a cash balance of $10.6 million at 30 June 2020.
Overall, OBM is continuing resource drilling and regional exploration activities across its projects in the present quarter while assay results received from RC and Diamond drilling undertaken are being collated.
OBM looks forward to releasing these results to the market subsequent to integrity checks.
On 04 August 2020, OBM stock was noted at $0.355 with a market capitalisation of $268.13 million.
All financials mentioned are in AUD, unless specified.
