Ann: The DRIVE to 100 - OBM Corporate Presentation, page-15

Hartleys updated research today

Price target lifted from 11c to 15c, more to come. Using Spot they value at 20c

Sees Riverina underground funded by cash and debt.

• We adjust our modelling to the latest Company reserves, resources and indicative guides, and now assume ~100koz (+16%) @ A$1,741/oz AISC (-6%) in FY25; assuming FID and development capex of ~A$20m, which all remains subject to update. Our FY24 forecast remains largely unchanged for ~79.7koz @ A$2,125/oz AISC.
• OBM had a short-term focus to improve operations, fill capacity of the processing plant (1.2mtpa), and reposition exploration on higher-grade underground targets. Medium and longer-term objectives of increasing production at lower unit costs via the introduction of higher-grade/margin mines. Riverina underground appears to the first of many such opportunities, with Missouri and Callion also being assessed (=upside).
• Our latest OBM NAV is 16cps (up from 11cps), spot NAV 24cps and Price Target 15cps (up from 12cps). We assume the development of the Riverina underground can be funded via cash and additional project level debt from its supportive major shareholder (Hawke's Point), though new equity may be considered.

Action

Filling plant capacity with higher grade ores makes commercial sense, and OBM has now demonstrated a potential pathway to higher sustainable production levels (+100kozpa) expected to equate to improved margins and free cashflow generation. We like the pipeline of growth options, within a goldfield that remains under-explored, especially at depth. New management team also delivering well on strategy. Speculative Buy retained, PT 15cps, currently trading on a P/NAV 0.6x, and forecast EV/EBITDA <1x FY25.