In its latest investor presentation, the company highlighted several factors which make it a viable investment opportunity.
With ‘significant’ infrastructure in place, operations underpinned by high-grade ore reserves of 6.1 million tonnes at 2.4 g/t for 460,000 ounces, a resource of 23.7 million tonnes at 2.8 g/t for 2.1 million ounces and regional exploration potential in a ‘district-scale’ landholding, Ora Banda believes it has a financially robust development project.
After completing a $55 million capital raising in July and release of its regional growth strategy and definitive feasibility study results in June, the company is well-funded and ready to advance towards a rapid re-start and near-term production.
Key DFS outcomes
The DFS focused on the recommencement of operations at Davyhurst where strong financial metrics were returned and first gold pour is targeted to begin in January 2021.
With a DFS base case of A$2,100/ounce gold and spot case of A$2,550/ounce, Davyhurst is forecast to deliver the following:
- Post-tax free cash flow of A$358 million;
- Average annual free cash flow of A$68.8 million;
- Rapid payback of 7 months at A$2,550/ounce gold;
- Post-tax NPV6% of A$291 million at A$2,550/ounce gold; and
- Post-tax IRR of 238% at A$2,550/ounce gold.
- The total estimated capital cost, which includes pre-production mine development and contingencies currently sits at A$45 million.
Ora Banda’s roadmap to a near-term 81,000 ounce (average) annual gold producer comprises a 28-week project delivery estimate, followed by a three-month ramp-up to full production:
Final phase development activities:
- Mining and plant commissioning scheduled to commence in Q4, 2020;
- First gold pour in Q1, 2021;
- Ramp-up period of three months to full production; and
- Full production expected from April 2020.
Multiple production sources are set to underpin a potential long-life mining operation:
- Six deposits contribute to the initial 5.2-year mine plan, all within 50 kilometres of Davyhurst plant; and
- Strong underground Mineral Resources of 0.5 million ounces gold (3.7 million tonnes at 4.4 g/t gold) provides opportunity for mine-life extensions below open pit mine designs.
Ora Banda’s Riverina South Corridor is around 1-kilometre long immediately along strike to the south of the planned Riverina open pit and is host to numerous historic gold workings.
It has been sparsely drilled but returned several encouraging drill intercepts from previous operators in the 1980s -2000s.
Prior to 2020, an exclusion zone surrounding the Riverina Station Homestead was in place that prevented any drill testing of the prospective corridor within the exclusion zone.
This exclusion zone was removed in April 2020, allowing the full 1-kilometre strike length of the Riverina South mineralisation corridor to be tested by drilling.
Multiple regional exploration targets
On August 10 the company received phase-2 reverse circulation (RC) results for 7,338 metres and 68 holes – completing the infill drilling program.
The results confirmed an extension to the Riverina Main Lode mineralisation into the Riverina South area ahead of a maiden resource estimation model scheduled for delivery in September 2020.