Ora Banda Mining has record half with gold revenue up 93% and NPAT 371% higher

Ora Banda Mining Ltd had a strong six months of production from the Davyhurst Gold Project in Western Australia to December 31, 2024, with revenue up 93% to a record A$186.422 million and net profit after tax (NPAT) for the period 371% higher to A$50.844 million.

EBITDA increased by 254% to A$84.2 million, cash flow from operations increased 765% to A$91.2 million and the company had closing cash of A$57.8 million at the end of the period, up A$31 million on the previous six months.

Spending of $54.2 million on capital included A$37.1 million on Riverina and Sand King underground development; A$8.2 million on resource development and exploration activities; and A$8.9 million on growth capital works projects for Sand King and ongoing improvement projects at the Davyhurst mill.

Transition to underground

During the period the company transitioned from lower-grade open pit mining to higher-grade underground operations, with Riverina being the first underground mine as part of this strategy.

At Riverina Underground mine there were 320,574 tonnes mined at 4.5 g/t for 46,190 ounces and at the under-development Sand King mine there were 9,202 tonnes of development ore mined at 2.2 g/t for 656 ounces for a record total of 47,300 ounces.

Cash flow from operations increased by 765% from A$10.6 million in H1 FY24 to A$91.2 million primarily due to increased gold sales of 15,668 ounces and a higher realised gold price (A$902/ounce higher than the prior comparative period).

Growing margins

Ora Banda’s managing director Luke Creagh said: “The first half of FY25 is a testament to the quality of Riverina Underground which has paid itself back in just 18 months and is delivering free cash flows that have enabled the company to self-fund the group’s second underground mine at Sand King.

“The operating margins of the business continue to improve, as reflected by the 371% increase in NPAT.

“Supported by the current gold price environment, we expect this trend to continue to grow into H2 of FY25 and into FY26 with the Sand King Underground scheduled to reach steady state production in the June 2025 quarter.”

Riverina Underground

Development and operating advance continued in line with schedules, with a total of 3,757 lateral advance metres completed including 2,297 operating development metres.

A total of 702 vertical metres were also completed during the period, including 503 metres of operating vertical metres.

These strong development rates enabled Riverina Underground to achieve commercial production on August 1, 2024, following two consecutive months of steady state production.

Project payback was then achieved in the December 2024 quarter, generating positive cash flows only 18 months after the portal was established.

A total of 59,631 tonnes of development ore was mined during the period at 4.7 g/t for contained ounces of 8,949 ounces. Stoping continued in the main ore body and delivered 178,708 tonnes at 5.6 g/t for 32,311 ounces.

Ora Banda continues to demonstrate that Riverina main lodes are continuous and high-grade, with a high conversion of stoping tonnes along the ore drives.

Grade control drilling during the period also confirmed the consistency and high-grade nature of Riverina ore lodes. A program of 122 holes intersected significant gold mineralisation, including 102 above 10 gram-metres, which included 45 intercepts over 20 gram-metres.

FID for Sand King

An important step during the six months was approval by the board of the Final Investment Decision (FID) for Sand King to become the group's second underground mine at the Davyhurst Project.

It became the second to be developed by the company in less than two years with capital of ~$39 million to be fully funded from Riverina Underground operating cashflows.

A total of 1,073 lateral advance metres were completed during the period, including 100 operating metres in the month of December 2024. First development ore was achieved in line with schedule, four months from portal establishment.

Key capital projects have been completed in line with FID and within budget, leaving only the primary fan installation to be completed in Q3 of H2.

First stoping ore is on track to be achieved in the current quarter, with steady-state production of ~60,000 ounces per annum to follow in the June 2025 quarter. This ramp is expected to deliver 21,000 ounces in a stronger second half of FY25.

Processing improvements

On the processing side, key improvement projects completed at the crushing and milling circuits in FY24 culminated in record ounce production during the half-year.

A total of 538,109 tonnes was milled at 3.1 g/t for 47,300 ounces produced, representing a 54% increase at the Davyhurst mill in gold production compared with prior period.

A 55% increase in head grade milled to 3.1 g/t from 2.0 g/t is a reflection of the switch in strategy to higher-grade underground mining.

Current period mill production includes the depletion of legacy open pit stockpiles. These stockpiles are fully depleted as at period end and are expected to be progressively replaced by higher grade Sand King material in the second half of FY25 and into FY26.

Inflection point

“With Sand King Underground progressing on schedule we have also reached an inflection point whereby the higher-grade feed from Sand King will progressively fill the Davyhurst mill paving the way for production and cashflow to increase and costs to reduce,” Creagh said.

“The cash build of $31 million demonstrates the strengthening operational and financial position of the company.

“This new-found strength positions the company to rapidly advance additional opportunities that exist in our portfolio,” he added.