extract … excellent research Cannacord GroupNew strategy...

extract … excellent research Cannacord Group

New strategy starting to bear fruit ... exit run rate from FY25 could be ~150kozpa ... from <50koz in FY23.

FY24 is expected to see a notable production lift YoY (CGe +49%). With the 2H introduction of Riverina underground ore into the blend, the company is expecting to produce ~70koz at an AISC of A$2,375/oz (guidance mid- points).
With commercial production expected to be announced in the JunQ'24, it will mark the first meaningful steady-state underground ore supply at the operation, and we expect it will contribute ~75kozpa of the targeted ~100koz FY25 production profile.
With a Resource and Reserve update expected shortly, we expect that OBM will make an FID on a second underground, Sand King, which has been the subject of an extensive and successful exploration program in FY24.

We assume that Sand King can be developed for A$35m during FY25, and essentially be at nameplate by the end of the FY, allowing the 1.2Mtpa plant to be filled with high-grade underground ore that should support a production rate of ~150kozpa from FY26.