Ora Banda Mining (ASX:OBM) has fallen to the tune of around -10% as Australian shareholders punish the company on a guidance downgrade.
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“Based on the current performance and stockpile levels, FY25 total production is expected to be ~95koz, which is 5% below the lower end of guidance of 100koz,” the gold mining company wrote on Friday.
“AISC is expected to be ~2,600/oz, which is 4% above the top end of previous guidance of $2,500/oz.” (AISC, in pub terms, is what it costs per ounce to mine it.)
So, slightly higher costs to produce each gold ounce, coupled with a forecast 5% decline in total gold produced across the twelve months to July – that’s how you get a -10% decline on Friday.
Presumably, investors are profit-taking while they can. But it’s worth noting Friday share turnover volumes were actually less than the 4Wavg at 4.15M vs. 7.36M respectively.
So why the decline?
Ora Banda pointed to extended downtime stemming from works on a key processing plant, which are now complete, but the damage has already been done.
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“In addition, the commissioning and ramp-up of the mill has taken longer than expected to achieve targeted daily throughput rates of 3,700-4,000tpd,” Ora Banda added in its market release shared on Friday.
Still, with gold prices where they are, it’s unlikely the company will be punished too harshly. So long as it can nip any future plant problems in the bud.
OBM last traded at $1.16/sh.
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Jonathon Davidson
The Market Online, Australia
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