Ora Banda’s decision to go underground has paid off with a doubling of its mineral resource. Pic via Getty Images
Mining
Ora Banda Mining has laid the foundations for a swift move to a final investment decision on developing its Riverina underground gold mine at the Davyhurst operation in WA, in an early win for its strategic pivot from open pit to high grade underground mining.
The Riverina underground mineral resource has been doubled to 303,000oz at 4.1g/t, after the company moved to ramp up its investment in exploration under new MD and former Northern Star (ASX:NST) executive Luke Creagh.
Ora Banda (ASX:OBM) has also revealed a maiden underground ore reserve at Riverina of 73,000oz at 4.3g/t, all extractable at a 2.2m minimum stoping width conservative reserve gold price of $1850/oz (almost $1000/oz below current prices) and only limited by the density of its drill results.
More drilling is expected to begin in March, with just 3% of the reserve comprised of the largely inferred Murchison lode. Infill grade control drilling is planned to convert resources to reserves, with a Phase 2 drilling program to extend the mineralised envelope further south and at depth.
The significance of the change in tactic is no more evident than in the volume of drilling completed since the underground strategy came to life.
Over six months OBM drilled 9.8km of diamond holes into the Riverina underground between July and December last year.
That is a remarkable 24% higher than the total underground drill metres completed at the deposit in the last 37 years, from 1984 to 2021.
The delivery of the reserves has opened the door to a planned 34% year on year lift in production output from between 55,000-60,000oz in FY23 to 100,000ozpa by FY25, subject to a decision from the OBM board to invest in the Riverina underground development.
Its higher reserve grade is anticipated to materially lift production and lower costs, with a review to demonstrate if it can deliver 600,000t of ore per annum under way.
Early works to prepare for that investment case to be put to the OBM board in the March quarter are already under way, with the Riverina Pit mined 15m to fresh rock to expose main portal and ventilation portal access and an underground mining tender well advanced.
That is expected to be completed next month. A mining commencement notice was submitted to WA’s mining authority on February 10, meaning mining could begin by March 27 subject to a board decision and contractor mobilisation.
“We are very excited by the increase of the Riverina Underground Resource and maiden Reserve position. This update is a game-changer for the Company because, subject to final investment decision, we have a genuine pathway to greater than 100kozpa that is backed by reserves,” OBM managing director Luke Creagh said.
“This puts us in a good position to present a business case for the final investment decision, thereby placing this project squarely on a rapid development path.”
The resource update takes the total open pit and underground inventory at Riverina to 5.15Mt at 2.7g/t for 445,000oz, the bulk of that in the underground.
Meanwhile, OBM is looking to repeat the dose by restarting exploration at the Callion and Siberia deposits in a bid to identify a second underground mine.
“This result also validates the prospectivity of our tenement package, noting there has been no modern or systematic approach to target high-grade underground mines, so we consider this not just early days on the Riverina system, but early days across our entire tenement package,” Creagh said.
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.
Mining
Mining
Mining
Get the latest Stockhead news delivered free to your inbox.
