Newly minted WA gold producer Ora Banda Mining says it remains on track to bring its large Missouri open pit on line next month, adding some desirable harder ore into its refurbished Davyhurst gold plant that will underpin an expected fiscal year 2022 production of more than 80,000
The harder ore from the new pit will help improve the ore feed blend that has relied on softer and lower grade oxide material during the plant ramp-up period.
Ora Banda started pouring gold from its 1.2 million tonne per annum Davyhurst mill in February this year and it is developing a series of open pit and underground deposits on the historically prominent gold field to provide both base load and supplementary plant feed in an initial five-year production schedule.
The six mines in the initial schedule include Missouri and its circa-230,000oz current resource and the Riverina and Golden Eagle mines that are providing an early mix of open pit and high-grade underground ore, respectively. Ora Banda says a high proportion of viscous, low-density softer oxide ore in the initial Riverina feed has hampered plant throughput and slowed gold production early on. However, the combination of harder ore from Riverina, Golden Eagle and Missouri that will come on line shortly is expected to enhance the ore blend uniformity from July this year.
The advancement of Missouri in the production schedule will go a long way to conquering ore viscosity issues encountered during commissioning. We are also seeing improvements in a number of other areas of the project, in particular at Riverina and Golden Eagle, which we believe will bode well as we accelerate our ramp-up.
The company expects to deliver about 420,000 ounces of gold averaging 81,000 ounces a year over the period, generating average annual free cash flows of A$35m at a base-case Aussie gold price of $2,100/ounce over the five years. The market price of gold is currently above $2,400/ounce.
Six previously mined deposits were included in Ora Banda’s 2020 Davyhurst definitive feasibility study that had remaining reserves of 6.1 million tonnes grading 2.4 g/t for 460,000 ounces, buttressing the initial production plan.
The next fiscal year will be the company’s first full year of gold production at Davyhurst and local stockbroker Euroz said in a research note this month that output of 80,000-100,000 ounces at all-in-sustaining costs around A$1,560/ounce would set Ora Banda up to grow via exploration success.
Euroz said: “The Davyhurst plant availability has been good at plus-90 per cent and Ora Banda is fine-tuning the optimal ore blends to enhance recoveries [that are] already above 90 per cent.”
“Exploration remains a key value driver with the district-scale land holding now starting to receive the drill-attention it deserves. We continue to see good potential to extend mine life and sustain higher production levels.”
Ora Banda has a dominant 1,350sq.km landholding at Davyhurst covering about 200 strike kilometres of fertile greenstone sequences.
Established infrastructure, including most of the core gold plant components, enabled Ora Banda to re-set Davyhurst at a pre-production capital cost of only A$45 million, making it one of the most capital-efficient start-ups for an 80,000-ounce-plus producer in the sector in recent times.
The company has no debt, about $20 million in cash and carried forward tax losses of more than $280 million that will boost early free cash flow levels.
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