Sand King is likely to be next in line for underground mining at Ora Banda’s Davyhurst project. Pic: Getty Images
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Special Report: Ora Banda’s Davyhurst project is looking increasingly lucrative with the Sand King deposit’s potential to be a second underground operation solidifying after a 176% increase in gold resources to 306,000oz.
The delivery of the near tripled resource upgrade and a maiden underground ore reserve at Sand King containing 55,000oz at 3.2g/t, were among the key highlights of an annual resource and reserve statement that shows Ora Banda (ASX:OBM) is within touching distance of hosting 2Moz of high quality gold resource.
A 54% increase in resources at the flagship Riverina underground gold deposit to 468,000oz, has brought Davyhurst’s global resource to 1.95Moz.
The gold miner, led by former Northern Star Resources (ASX:NST) executive Luke Creagh, has engineered a major shift in thinking to modernise the Davyhurst operations near Kalgoorlie, turning away from marginal open pits to chase higher grade ounces underground.
Stoping began at Riverina in the March quarter, with Sand King now in line to become the second underground development.
A +1km long mineralised system that is part of the Siberia project area – Sand King was previously mined as an open pit by Western Mining until 1991 producing 50,000oz of gold at an average grade of 4.8g/t.
A small cutback that wrapped up in early January delivered 11,400oz at 1.7g/t for OBM, but drill hits have shown the deposit remains open along strike and at depths suited for underground mining below more than 300m.
Intersections ranging as high as 17.4g/t in the 090 Lode served to open up a significant exploration window to the north and at depth as the ultramafic unit dips away to the southeast.
Sand King’s development after Riverina would provide support for the company’s goal of producing 100,000oz of gold at Davyhurst in FY2025.
At last update, Davyhurst was expected to deliver 67,000-73,000oz at all in sustaining costs of $2275-2475/oz in the just departed FY24, against gold prices that spent much of the year above $3500/oz.
The most recent resource upgrade has really brought Sand King into focus, taking the initial 110,000oz and expanding it by 176% to 3.4Mt grading 2.8g/t gold, or 306,000oz contained gold.
The upgrade at Riverina, where development of OBM’s first underground mine is progressing, included a 19% increase in its ore reserve to 87,000oz.
This has also increased total ore reserves at Davyhurst by 19% to 190,000oz and cranked up the reserve grade – excluding low grade and stockpiled material – by 17%. Underground ounces make up the bulk of that at 142,000oz, a near doubling from last year’s position of 73,000oz.
Surface stockpiles have also increased by 67% to 20,000oz.
“Our updated resource and reserve position is reflective of the wholesale changes Ora Banda has made as a business to target high-grade, with a plus 50% increase in Riverina underground resource and a 176% increase in the Sand King underground resource, in addition to declaring a maiden underground ore reserve at Sand King,” managing director Luke Creagh said.
“Although it is still early days, we are extremely encouraged by the fact that we’ve been able to grow our ounce position so quickly and that we are now seeing the deposits show significant potential along strike and at depth.
“The company will continue to allocate significant investment into exploration and resource definition drilling to continue to expand these mineralised systems to extend mine life and increase its options around an accelerated production profile in the future.”
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.
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