Ora Banda has raised $4.2 million, and is prepped to fund a major transformation. Pic via Getty Images
Gold miner Ora Banda banks more cash to bolster balance sheet for Riverina underground decision
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Ora Banda Mining has moved swiftly to raise $4.2 million from the sale of non-core tenements at its Davyhurst gold project and funding from its major shareholder Hawke’s Point, fortifying its balance sheet ahead of a major transformation.
The gold miner wants to be a 100,000ozpa producer by FY2025, something it plans to do through the development of the Riverina underground mine.
The sale of four exploration tenements at the bottom tip of its extensive Eastern Goldfields land package to fellow WA gold miner Beacon Minerals will put $2.5 million in cold hard cash on the balance sheet, a good outcome given the exploration leases were not in Ora Banda’s (ASX:OBM) production plans.
Ora Banda will also receive a $1.7m payment from Hawke’s Point to extend its funding arrangements with the major US investor.
That will see a royalty over those tenements extinguished, with OBM to increase the royalty slightly on its tenements due to Hawke’s Point to 1%, with a 900,000oz cap also removed.
But the royalty will not come into effect until January 2024, with Hawke’s Point also agreeing to extend the maturity on an $11m unsecured loan from a maturity date of December 31, 2023 to September 30, 2024.
The sale comes less than a week after OBM announced the disposal of three mining leases for $10m to Lamerton Pty Ltd and Geoda Pty Ltd.
It will mean an additional $14.2m in cash will hit OBM’s bank account in preparation for the Riverina underground investment decision, along with the added cash flow flexibility from the restructure of the Hawke’s Point royalty and loan.
“As with the previous Lady Ida sale, the sale of these exploration tenements for $2.5 million is an excellent outcome for OBM shareholders as they are non-core and not part of our production target of 100kozpa.” Ora Banda managing director Luke Creagh said.
“The Hawke’s Point funding for $1.7 million is also important for OBM shareholders as it strengthens our balance sheet as well as extending the existing $11 million debt maturity to September 2024 which gives the Company improved cash flow flexibility.”
Ora Banda last month doubled underground mineral resources at Riverina to 303,000oz at 4.1g/t with a maiden ore reserve of 73,000oz at 4.3g/t and more reserve conversion only limited by drilling density.
With a recent charge in Australian dollar gold prices the reserve calculation was completed at more than $1000/oz below spot prices.
This article was developed in collaboration with Ora Banda Mining, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
