Ora Banda’s Growth Hinges on Ore Sale Deal and Processing Expansion Risks
Ora Banda Mining delivered a strong FY25 with 92.4koz gold produced, up 32% year-on-year, and sets an ambitious FY26 target of 140-155koz driven by new underground mines and strategic partnerships.
- FY25 gold production rose 32% to 92.4koz
- June quarter output impacted by operational delays but still 21.9koz
- FY26 guidance aims for 140-155koz gold, a 60% increase
- Growth capital expenditure of $86M planned, including $37M for underground development
- Non-binding MOU with Norton Gold Fields to process up to 400kt ore
Strong FY25 Performance Sets Stage for Growth
Ora Banda Mining Ltd (ASX – OBM) has reported a robust FY25 with gold production reaching 92.4 thousand ounces, marking a 32% increase over the previous year. Despite some operational setbacks in the June quarter, including slower ramp-up of the mill and mining delays at Riverina Underground, the company produced 21.9koz in that quarter alone. These challenges deferred approximately 3koz of high-grade ore into early July but did not derail the overall growth trajectory.
Cash reserves ended the year strong at $84.2 million, bolstered by $57.4 million in free cash flow, providing a solid financial foundation for the company’s ambitious expansion plans. Stockpiles of 165kt at 1.9g/t gold, including medium-grade ore, position Ora Banda well for FY26 operations.
Aggressive FY26 Guidance and Strategic Partnerships
Looking ahead, Ora Banda has set a bold FY26 production guidance of 140,000 to 155,000 ounces, representing a roughly 60% increase from FY25. This growth is underpinned by the full-year contribution from the Sand King Underground Mine and ongoing third-party ore sales to Norton Gold Fields (NGF). The company recently signed a non-binding Memorandum of Understanding with NGF to process up to 400,000 tonnes of ore, which, if formalised, could significantly enhance throughput and revenue.
All-in sustaining costs are forecast between A$2,800 and A$2,900 per ounce, reflecting higher third-party processing fees, full-year underground mining costs, and increased royalties due to stronger gold prices. The company is investing $86 million in growth capital, including $37 million for underground development, $6 million for processing plant upgrades, and $43 million for new infrastructure such as an on-site airstrip and assay lab.
Exploration and Processing Expansion Drive Future Potential
Ora Banda is allocating a substantial $73 million budget to exploration and resource development drilling in FY26, nearly doubling the drilling metres compared to the last three years combined. This aggressive program aims to extend mine life at Riverina and Sand King Undergrounds, test new prospects like Waihi, and advance other key targets including Little Gem and Round Dam.
Additionally, a feasibility study is underway to expand the Davyhurst processing plant from its current 1.2 million tonnes per annum capacity to approximately 3 million tonnes. This expansion could reduce unit processing costs, improve gold recoveries by up to 4%, eliminate reliance on costly third-party milling, and support the development of additional mines and larger open-pit opportunities.
Managing Director Luke Creagh highlighted the company’s strong operational momentum and financial position as a platform for growth, emphasizing the strategic importance of the exploration program and infrastructure upgrades to sustain and accelerate production increases.
Bottom Line?
Ora Banda’s FY26 ambitions hinge on operational execution and formalising key partnerships, setting up a pivotal year for the company’s growth story.
Questions in the middle?
- Will the non-binding MOU with Norton Gold Fields convert into a binding ore sale agreement?
- How will the planned processing plant expansion impact production costs and throughput timelines?
- Can exploration drilling results extend mine life and unlock new underground targets as anticipated?
