Ora Banda Mining Ltd (ASX:OBM) has entered into an agreement with Lamerton Pty Ltd and Geoda Pty Ltd for the sale of certain non-core Lady Ida tenements for total consideration of $10 million.
Upon receiving the funds, the company will grant the buyers the rights to explore and mine gold and silver at the tenements.
Notably, OBM’s production target of 100,000 ounces per annum in FY25 did not include any material from the sale tenements.
Looking ahead, this transaction will strengthen the company's balance sheet ahead of the final investment decision on Riverina Underground Project.
Strengthen balance sheet
Ora Banda managing director Luke Creagh said: “The sale of these tenements for $10 million is a great outcome for OBM shareholders as they do not align with OBM’s strategy to target high-grade underground deposits, nor is it included in our production target of 100,000 ounces per annum supported by reserves.”
“In addition, the Lady Ida tenements are approximately 65 kilometres from the Davyhurst Plant with significant capital requirements to establish haul roads and access for OBM, and the deposit is lower grade than other resources on the OBM tenements.
“The $10 million sale proceeds will strengthen OBM’s balance sheet as we progress the Riverina underground toward final investment decision and continue exploration on other advanced high-grade targets.”
Sale terms
Ora Banda agreed to the sale subject to conditions precedent being met which include:
- Sale of M16/0262, M16/0263, M16/0264 plus corresponding miscellaneous licences (L15/224, L16/58, L16/62 and L16/103) and applications for L16/138 and L16/142 to Lamerton Pty Ltd and Geoda Pty Ltd;
- OBM to retain mineral rights for all non-gold/silver over the sale tenements; and
- As one of the conditions precedent, OBM is negotiating with Hawke’s Point for the release of the sale tenements from its existing royalty.