Ora Banda (ASX:OBM) attracts $30m for Eastern Goldfields gold production

Ora Banda Mining has quickly attracted the backing of shareholders and new investors to put the underground Sand King deposit on the rails towards a final investment decision as it advances its flagship Davyhurst Gold Project towards greater production in Western Australia.

The discovery of a high-grade stacked lode system from the first exploration hole into the northern Sand King area was taken as a game changer for the prospects of underground mining in the Eastern Goldfields.

And investors have agreed to the tune of $30 million in an institutional placement priced at 22 cents a share – a 13.7 per cent discount to a last-traded price of 25.5c – to rapidly advance Sand King and continue an on-schedule ramp-up of mining at the project’s Riverina underground deposit.

Ora Banda Managing Director Luke Creagh said the company was at an exciting inflection point as it pivoted away from low-grade open pit mill feed to high-grade underground as a primary source of ore.

“In addition, the outstanding recent drilling results from the phase 1 program at Sand King position it as a potential second underground mine in the future which could materially increase production,” Mr Creagh said.

“The company is now well funded, and we thank our existing and new investors for their support. We continue to execute our strategy in becoming the next mid-tier miner in Australia.”

The gold player has accumulated 2 million ounces at 2.5 grams per tonne and a mineral reserves inventory of 276 thousand ounces at 1.9g/t across Davyhurst, and is now on track for steady-state production at Riverina for the June quarter of 2024.

Ora Banda’s ambition is 100,000 ounces of gold a year by 2025, holding a 1.2 million tonne Davyhurst processing plant which begs for more feed.

It has now put a spotlight on Sand King for the task, believing another underground operation would fill the plant with high-grade ore, substantially increase its production rate, and put the company in a step change position.

The greater Davyhurst project covers 1200 square kilometres of territory and almost all of about 130 strike kilometres of greenstone sequences considered prospective for gold, nickel sulphide, and base metals.

Its owner believes it is still only scratching the surface, but for now has production on its mind and near-term numbers that would leave it entrenched as a mid-tier producer.