Ora Banda Mining becomes Australia’s newest gold producer with two operating gold mines and a third in development

Ora Banda Mining Ora Ltd (ASX:OBM) (FRA:M6N) became Australia’s newest gold producer after it recommissioned the Davyhurst Gold Processing Plant in WA, together with its associated site infrastructure, with the first gold poured on February 7, 2021. It marked a major milestone for Ora Banda, transitioning the company from a developer to a gold producer.  The gold producer now has two operating mines – Riverina and Golden Eagle - with the third, Missouri, in development.  Its 1.2 million tonnes per annum nameplate process plant is operational and it is continuing to build ore stores.  Quarterly highlights During the quarter, a total of 3,024 ounces of gold were sold at an average price of A$2,235 per ounce. At quarter-end the company had: Unsold bullion of 1,166 ounces; Gold in Circuit (GIC) of 1,354 ounces; Gold in surface ore stocks of 6,593 ounces. Riverina open pit productivity continued to increase during the quarter, reaching the 425mRL bench level by March 31, 2021. The dewatering and rehabilitation of Golden Eagle underground was also completed in the quarter and first gold production achieved. All key infrastructure was completed during the quarter, including power, camps, processing plant, and bore fields. With A$1.25 million investment in exploration, a total of 30,225 metres of exploration and resource definition drilling were completed. Davyhurst Gold Project With the first gold poured in February, project works have been delivered on schedule and within budget. They include: Riverina open pit & Golden Eagle underground operational; Process plant in ramp-up phase with full throughput imminent; and Planning for commencement of mining operations at Missouri in progress. Multiple production sources underpin the long-life operation at Davyhurst, with six deposits contributing to the current 5.2-year mine plan, all within 50 kilometres of the Davyhurst plant. There are potential open pit extensions and strong underground mineral resources of 500,000 ounces of gold (3.7 million tonnes at 4.4 g/t), providing the opportunity for near-term mine-life extensions beyond current designs. It has highly strategic long-term infrastructure in place to support growth and resource extensions, with Ora Banda positioned well to be a long-term regional producer in a leading jurisdiction. Key DFS metrics At its base case gold price of A$2,100 per ounce gold, the Davyhurst Gold Project is forecast to deliver: ➢ Post-tax free cash flow of A$175 million; ➢ Average annual free cash flow of A$35 million; ➢ Rapid payback of 14 months; and ➢ Post-tax net present value (NPV) of A$137 million. The life-of-mine production forecast is at 418,000 ounces of gold for the life-of-mine or 81,000 ounces per year of gold. The DFS has confirmed the project will generate strong cash flows and financial returns with its six distinct mining operations - Riverina, Missouri, Sand King, Waihi and Callion open pits and the Golden Eagle underground. These six deposits will feed the Davyhurt Processing Plant. District-scale landholding Its district-scale land holding stretches from Kalgoorlie to the north of Menzies with significant exploration potential. The tenement package consists of 111 granted tenements covering an area of about 1,350 square kilometres. It has around 200 strike kilometres of greenstone sequences prospective for gold as well as nickel sulphide and base metal mineralisation. At its Riverina South and underground prospects, it has confirmed an extension to the Riverina Main Lode mineralisation, which remains open along strike to the south and at depth. It has a maiden resource estimate of 650,000 tonnes at 2.1 g/t for 43,000 ounces. At the Riverina open pit and underground, 48 kilometres from the Davyhurst process plant, there is considerable scope to grow the resource and reserve base with its underground mining evaluation study in progress and confirmed extension to the Riverina Main lode. At its Golden Eagle Underground only 2 kilometres from the Davyhurst process plant, drilling has been targeted at extending and upgrading the current resource with 4,083 infill diamond metres drilled in the March 2021 quarter. A major resource definition drilling program has been planned from underground locations to upgrade the inferred resource. Financing As of end-March 2021, the company had A$18.5 million in cash with no debt. It also has a A$15 million credit terms agreed with the Commonwealth Bank of Australia (ASX:CBA) (OTCMKTS:CBAUF) (FRA:CWW) for hedging and working capital purposes to support prudent risk and capital management during the ramp-up phase, subsequent to the first gold pour at Davyhurst. Ora Banda managing director David Quinlivan said the addition of these credit facilities was a prudent step in the management of risk and working capital. He added: “We see this as a significant step, given the company’s recent transition from developer to a producer with significant exploration upside. This facility enables management to undertake discretionary gold hedging. Management change Peter Nicholson took over as chief executive officer (CEO) with effect from April 6, 2021.  Quinlivan, who was holding both managing director and CEO hats, will continue as managing director in the short to medium term, and take on a role as a non-executive director of Ora Banda when Nicholson takes on the role of managing director as well. The timing of that proposed change will be determined by the board to ensure an orderly transition of all executive functions. Ora Banda chair Peter Mansell said this was a significant appointment for Ora Banda as Nicholson’s “ strong combination of technical, commercial and operational expertise and experience will be a substantial contributor to the ongoing success and growth of Ora Banda”. Nicholson has 25 years of industry experience in operational and mine management roles, coupled with deep experience in private equity across international mining and mining services. He has been exposed to an extensive range of assets and commodities, spanning more than 50 countries, and has considerable experience in leading senior multi-disciplinary technical and commercial teams.