Ora Banda Mining Ltd (ASX:OBM) says updated estimates for its mineral resources and ore reserves as at June 30 show the company is well placed for growth in challenging market conditions.
The company’s mineral resource of around 2 million ounces remains stable despite mining depletion, and there has been significant growth in the Iguana mineral resource following drilling last year.
Davyhurst Project – comprised of the six key deposits of Riverina, Waihi, Callion, Missouri, Sand King and Iguana open pits – boasts 25,200,000 tonnes at 2.5 g/t gold for a total of 2.02 million ounces.
Robust business case
Ora Banda is confident its ore reserve inventories provide a strong platform for a profitable growth strategy for the company.
Ore reserves have been updated to 276,000 ounces at ~2 g/t and those underpin more than four years of production at the company’s current run rate.
The company says the reserves were estimated at a gold price of $A1,850 per ounce, which provides excellent cashflow opportunities compared to previous calculations done at a gold price of $2,200 per ounce.
In the meantime, the company will focus on higher-margin ounces that add value to the ore reserve base.
Changes in market outlook
Cost increases have been taken into account for the ore reserve conversion which reflect changes in the prevailing market conditions for the West Australian mining industry.
In this latest resource update, Ora Banda has factored in mining depletions alongside operational efficiencies to form a robust business case on which to build a strong future for the company.
The mineral resource of roughly 2 million ounces also provides extensive future organic growth opportunities, while updated ore reserves of 276,000 ounces at around 2 g/t underpin production.
Ora Banda Mining CEO Luke Creagh said: “Our change to the gold price assumption for our reserve calculation down to $1,850 per ounce fundamentally improves the economics on how we assess our projects.”
“This change improves the quality and value of our current reserve base as well as directing our focus to higher-margin ounces – both from a production perspective as well as directing our drill programs.
“Very upbeat”
“I am very upbeat about increasing our resource and reserve base given the outstanding opportunities the company has with over 120 kilometres of mineralised trends that are substantially under-explored.
“This year we will be committing to a systematic, disciplined and continuous approach to our exploration pathway and we look forward to informing the market in due course.”
What’s next?
Drilling has commenced at Riverina, pinpointing extensions to the deposit’s higher-grade mineral resource with a view to converting more ounces to reserves.
Further drilling is planned in this financial year, which will continue Ora Banda’s strategy of growing higher-margin mineral resources at the Siberia, Riverina and Callion deposits.