Ora Banda Mining raising $55 million to underpin restart of gold production at Davyhurst project

Ora Banda Mining Ltd (ASX:OBM) (FRA:M6N) has launched a $55 million equity raising to underpin the final phase of development activities to re-start production at Davyhurst Gold Project, north of Kalgoorlie in Western Australia’s Goldfields. Equity raising proceeds, together with its existing cash balance, are expected to meet the capital costs and working capital requirements to recommence production at Davyhurst, which is targeted for January 2021. The raising, which will comprise an institutional placement and a non-renounceable entitlement offer, will also provide funding to ensure minimum ongoing exploration programs across the company’s 1,350 square kilometres prospective landholding are met. "A significant step" Ora Banda managing director David Quinlivan said: “The capital raising is a significant step for the company as we advance towards production at Davyhurst. "It will provide the funding required for the production re-start and will strongly position Ora Banda to become a debt-free gold production company in Q1 2021. "We are also pleased to provide existing shareholders with the ability to participate in the offer.” Institutional placement The $55 million equity raising will involve a two-tranche institutional placement and an accelerated non-renounceable entitlement offer.    A two-tranche institutional placement of up to about 174 million new shares will raise up to around $40 million. Under the first tranche, around 95,667,216 new shares will be offered to sophisticated and professional investors and the second tranche, which is subject to shareholder approval, will involve the issue of a minimum of 78,245,828 new shares to major shareholder Hawke’s Point. Entitlement offer Around 66 million new shares will be issued as part of an underwritten 1-for-9 accelerated non-renounceable entitlement offer to raise up to around $15 million. This offer will consist of an institutional entitlement offer and a retail entitlement offer. All new shares offered will be issued at a price of 23 cents per new share, which represents a 9.80% discount to the last traded price on July 2 and a 7.18% discount to the theoretical ex-rights price (TERP). Upon completion of the offer, Ora Banda will have around 829,785,227 shares on issue. Lead manager Hartleys Ltd has been appointed as lead manager for the offer A general meeting to consider tranche-2 of the placement is expected to be held in late August 2020 and Hawke’s Point has committed to subscribe for at least 78,245,828 new shares under this tranche. The placement is not underwritten while the institutional entitlement offer is fully underwritten by Hartleys. Davyhurst Gold Project The Davyhurst project, which has four key deposits - Riverina, Missouri and Sand King open pits and Golden Eagle underground – saw its total gold resource hiked up to 2.13 million ounces after establishing a maiden underground mineral resource at the Callion Main Lode. The capital raising funds will go towards: ➢ Processing plant refurbishment and recommissioning; ➢ Site infrastructure, including tailings storage facility, road maintenance and site accommodation; ➢ First fills and spare parts; ➢ Pre-production mining costs; ➢ Exploration programs; and ➢ Working capital.