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Ora Banda pockets $12.74m in debt and royalty deal to grow Riverina underground gold mine
Mining
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Ora Banda Mining has secured $12.74 million in debt and royalty funding from its top shareholder Hawke’s Point Holdings, in a move to shore up the development of its Riverina Underground mine while avoiding dilution to investors.
The deal will include an unconditional and unsecured loan of $11 million and a capped net smelter return royalty with respect to certain gold products to Hawke’s Point in return for $1.74m.
The royalty will be payable at a net smelter return of 0.9%, capped at 900,000oz from December 31, 2023 over a 15-year period.
Ora Banda (ASX:OBM) says it expects to receive the funds on or around December 23, and will use them to fund resource development and exploration at Riverina, capex and general working capital.
“This funding is a great outcome for shareholders because it allows Ora Banda to continue advancing the Riverina underground project without delays and demonstrates the support of our major shareholder, Hawke’s Point, to unlock the exploration potential of our highly prospective tenement package,” OBM MD Luke Creagh said.
“Importantly the funding package will also mean no dilution to shareholders whilst operational improvements strengthen the business in the second half of FY2023 ahead of the Royalty becoming payable in calendar year 2024.”
OBM sold 13,661oz of gold in the September quarter, and plans to produce 56,000-61,000oz at all in sustaining costs of $2175-2275/oz in FY23.
But it has ratcheted up investment in exploration, part of a three-year “Geology First” strategy, committing to targeting high grade underground ore like the Riverina mine.
Recent drilling results extended high grade mineralisation more than 100m to the south and 100m vertically.
It remains open in all directions, with some stellar grades at depth including 2.5m at 29g/t and 2.4m at 26.4g/t in the Main Lode East area.
Hawke’s Point is OBM’s largest shareholder with a 45.29% stake in the WA gold miner.
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.
