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Summary
- Ora Banda Mining had re-commenced production at its Davyhurst Project and made the first gold pour in early February 2021.
- OBM’s DFS had shown strong results, and the Company has completed various capital works activities to enable the processing plant.
- The six deposits at OBM’s Davyhurst project underpin the project's long-life operation, and OBM has a conventional approach to mining method and schedule.
- OBM is currently progressing with resource definition drilling programs focussing on near-mine infill drilling to upgrade existing resources.
Ora Banda Mining Limited (ASX:OBM) is all set to emerge into the newest gold producer of Australia, with the first gold poured on 7 February 2021 from its Davyhurst Gold Project located in the highly prolific Eastern Goldfields region.
The Davyhurst represents a financially robust project as the Company remains fully funded and debt-free with A$32.6 million cash on 31 December 2020 and A$15.0 million facility terms agreed with CBA.
DFS completed with strong metrics
OBM had completed a Definitive Feasibility Study to re-commence production at its Davyhurst Project, which established a quick and low-capital way to attaining sustainable gold production at the project.
INTERESTING READ: Ora Banda (ASX:OBM) Uniquely Positioned To Reap Benefits After Busy Half-Year
(Source: Company Announcement 17 March 2021)
Moreover, the DFS projected a free cash flow of A$175 million over a 5.2-year mine life using a A$2,100/oz gold price. Furthermore, the project is estimated to generate an average annual free cash flow of A$35 million while carried forward tax losses of A$258 million is expected to grow free cash flow in the early years.
The DFS also highlighted the average annual gold production of 81kozpa with a production target of 481koz over the existing 5.2-year mine life.
Capital works completed at the processing plant
To re-commencing the production at Davyhurst, the Company had undertaken numerous capital works activities to enable the processing plant, enhance the infrastructure around the processing plant, and undertook mining operations.
INTERESTING READ: Ora Banda’s (ASX:OBM) Continuing Streak For Impressive Mining Results
The Company undertook direct procurement, and remedial site works program to enable the processing plant to operate at its nameplate 1.2 Mtpa capacity. Moreover, infrastructure developments among others include Davyhurst camp upgrade, installation of Riverina camp, LNG facilities and new power station, communications upgrade, maintenance of site roadways etc.
Davyhurst Processing Plant Control Room (Source: Company Announcement 17 March 2021)
On the mining front, OBM had concluded all works related to the establishment of site infrastructure at Riverina, mobilising of the earthmoving fleet, clearing of the open pit, waste dump and other mine site areas, haul road construction as well as open-pit mining activities by 31 January 2021.
Project work delivered on time
During the same time, OBM also concluded all works related to the establishment of site infrastructure at Golden Eagle, mobilising of mining fleet, dewatering the underground workings, rehabilitation of all underground working areas and underground mining activities.
Golden Eagle Underground Operations (Source: Company Announcement 17 March 2021)
With activities concluding in time, OBM has been able to deliver project works on schedule and within budget, including operating the Riverina open-pit, Golden Eagle underground mining and the processing plant. Besides this, OBM also witnessed the first gold poured in the first quarter of 2021 and is currently in the process plant ramp-up period.
DECEMBER QUARTER UPDATE: Ora Banda ASX:OBM Reports A Busy Quarter With Major Progress at Davyhurst
OBM believes that multiple production sources underpin the long-life operation at Davyhurst, where six deposits contribute to the current 5.2-year mine plan and are all located within 50km of the Davyhurst plant.
Current and upcoming activities
Currently, there is significant infrastructure in place to support current and future operations at the Davyhurst processing plant, while there are optimisation investigations and trade-off studies currently in progress.
Process Plant In Operation (Source: Company Announcement 17 March 2021)
OBM has a mine plan based on an Ore Reserve of 6.1Mt @ 2.4g/t Au for 460koz Au that encompasses a conventional approach to mining method and schedule. Moreover, the Company has scheduled mining of the five open pits and one underground area that is planned to be undertaken in a phased manner to optimise cash flow over more than 5-year life of the project.
Key Deposits Underpin Mine Production (Source: Company Announcement 17 March 2021)
There are ongoing resource definition drilling programs that emphasis near mine infill drilling through which the Company remain in pursuit of upgrading the existing resources.
INTERESTING READ: Ora Banda Mining Ready to Get the Boots on the Ground; Highlights Key Validations from DFS at Davyhurst Project
Now, OBM has looks forward to a full process plant throughput rate from April 2021 and is currently progressing with planning for commencement of mining operations at Missouri.
Furthermore, OBM has several near-term opportunities with potential open-pit extensions and strong underground Mineral Resources of 0.5 Moz Au that offer the opportunity for near term mine-life extensions beyond present designs.
OBM stock was noted at $0.255, up by 4.081% on 19 March 2021.
