OBM (ASX) Ann: Strong New Drill Results at Riverina, Waihi &amp; Little Gem

Originally posted by bcjk3: ↑

Hey mate, I've watched your posts for a long time given we both held SPR early, you are right to have an opinion on anything you want at any time but its clear you have a negative agenda re: OBM which is great, so we can debate as i'm quite positive long-term. In the interest of said debate you should explain in more detail why this impacts your investment thesis and we should all be thanking you for poking holes in ours. In short you are warning us that the drill results are poor and we should learn to read the report but in the interest of balance I'm not sure you're seeing the upside either, why?

Further i think next to nobody who has enjoyed this run from 3c to current and surrounding prices has worried about the resource otherwise we'd never had held it as it's always been scarse. Everyone knows what they signed up for. Everyone understands the prospectivity and data sets otherwise none of us would have taken the risk. Yet you still bang on about the resource here now and in your previous posts also.

Below is their FY25 drill plans, you can see the infill upgrading to indicated and the right hand side colum saying "By EOFY25' over 90% of existing LOM is expected to be converted" and you can see the growth areas.

Can you answer what the capital cost is for those ounces that will come off that northern decline if mineralized? Initial results below don't look awful.

Do you know how many vertical meters they can mine per year?

What's a reasonable extrapolation of mine life given vertical extent?

So now lets look at the most recent announcement, you can see they are tapping that northern corridor and they are intersecting the main lode footwall at 1000m below surface.

At ~80m vertical meters a year could it reasonably be conceived that they are inferring a 5+ year extension to Riv here alone?

The latest update provided no information on Sand King but I'm assuming you're worried for us there too

Doesn't look overly concerning to me given the system is open in every direction

14.5koz months coming in hot starting now and the market won't believe them (rightly so) until they sort out the processing plant issues.

So why not direct your issues to the process plant? Seems like easier pickings than the resource.

Actually, if you look hard enough you'll find they announced to market the processing plant is going through upgrades also. Given you've been around a while you should know delays happen.

So whats your problem? Resource scarcity is well known and cum upgrade.

Processing plant issues well known and publicly discussed and now addressed.

So what should we jump at next? Enlighten me but do so in a way that alerts me to some unknown risks, something that is not blindly obvious or frankly, already reported on by the company.

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Congrats to all those who have done well in OBM.

You have avoided answering my questions and focused on other matters. I am not into promises and plans you seem focus on but facts. You may want to consider that they planned for AISC of $2,025 (mid-point) but are delivering $2,600 and production being about 9% below planned. That is, plans mean nothing if they miss them by a wide margin. I would not be concerned about missing production but the AISC is a huge miss and is the elephant in the room ie why production is about 9% below guidance but AISC is 28% above guidance noting the higher mined grade than reserve grade should have reduced planned AISC offsetting the other processing issues they have encountered, which increased AISC, but it did no go anywhere towards offsetting. Why then is AISC about nearly 20% above plan above guidance (net after the production miss)?

You have missed that stockpiles only have a grade of 2.8 g/t less than the head grade mined to date this year. You ignore the words 'possible' and are not focused on facts.

They may have had blow outs and the head grade mined grade at Riverina is 25% above ore reserve grade but the head grade has still only been 3.05 g/t in the last 6 months which is one reason the AISC is high.

I have looked through all the detailed drill results at the back of each announcement since June 2024. They are not very exciting - again I will ask my question what proportion have a gram/metre over 25 and over 50?. Have you looked through all the detail assays?

OBM had a reserve of 142k Oz @ 3.7 g/t in the areas being mined a year ago and that will have reduced a lot well below 75k oz now - what upgrade will they have next month when the assay results have not been very exciting? 142k oz is not even at 2026 planned production level. The M&I MRE from a year ago for the current mining areas are 336k Oz at a grade of 3.2g/t or a bit more than 2 years of 150k Oz pa production. These compare very unfavourable for other producers producing 100 Oz or more per year. They need to spend a lot on drilling to increase resources to produce beyond 2 years and much more grade control drilling than other producers which is not going to be cheap and will cause costs to be higher than other producers.

I do not know what their guidance for 2026 will be and its not production that is an issue instead it is AISC guidance and more to the point what AISC will actually be in 2026 (ie will it meet guidance or be worse or better). All I know is that if AISC is 10% or 20% higher than the existing 2026 guidance then the stock will drop from current levels and significantly so if its 20% higher. A higher AISC is a risk that should not be ignored and it may be a significant risk which do not seem to be recognising.