Ora Banda nabs $50m loan to speed up WA gold | Australian Markets

Ora Banda Mining has beefed up its already bulging pockets by locking in a secured two-year, $50 million revolving credit facility with ANZ and the Commonwealth Financial institution.

The newly established credit has been structured as a two-year time period with an non-compulsory one-year extension clause. The transfer has supercharged the company’s warfare chest to more than $100m, together with $58m sitting in its coffers.

Armed with improved firepower, Ora Banda now has the financial flexibility to pay for the growth of its booming Davyhurst gold project in WA because it strikes towards a manufacturing goal of 150,000 ounces of gold subsequent 12 months.

The funding settlement has been set underneath aggressive phrases, together with commonplace financial covenants and regular third-party consent provisions.

Whereas Ora Banda has a robust stability sheet and we’ve been producing robust working money flows, we really feel it’s important to have the added financial flexibility which this low-cost revolving debt facility offers us.

Though the new facility doesn’t need to be hedged, the company will use the surging gold price to buy a one-year put option at $4400 per ounce over the longer term sale of 100,000 ounces of the yellow steel.

Administration says if the price of gold falls during the following 18 months, the hedging facility will are available in very useful to cowl a significant slice of subsequent 12 months’s expanded manufacturing profile.

The put option has a price tag of $14.2m or $142 per ounce of gold and can present Ora Banda with a security web in opposition to falling gold costs whereas protecting the door large open for good points if costs surge.

The premium can be paid in manageable month-to-month instalments of $1.18m by the 2026 financial 12 months to minimise the affect on the company’s cashflow.

The Davyhurst project, 120 kilometres northwest of Kalgoorlie in WA’s Jap Goldfields, has loved a outstanding renaissance up to now 2.5 years.

Previous to ex-Northern Star sources basic supervisor Luke Creagh stepping up as managing director of Ora Banda, the company’s flagship Davyhurst mine was limping alongside at 50,000 ounces of gold per 12 months with grades peaking at 1.5grams per tonne (g/t) and was thought-about by many as being long previous its prime.

Ora Banda has since turned issues round by opening up the high-grade underground sources on the company’s Riverina and Sand King mines.

Wind the clock ahead and at the moment’s numbers inform the true story.

The company’s complete stock stands at 1.925 million ounces grading 2.7g/t with the latest drilling success prone to see grades and ounces grow shortly.

The project has doubled the company’s annual manufacturing to 100,000 ounces and put it on track to hit 150,000 ounces of gold subsequent 12 months. The pinnacle grade has additionally lifted a outstanding 200 per cent to 4.5g/t and its all-in sustaining prices are forecast to run at a very manageable $2125 per ounce this 12 months.

Ora Banda has a fortified stability sheet and a clear strategy for leveraging market situations. It seems well-positioned to navigate the gold industry’s notoriously unstable dynamics and hit its bold growth goal of attending to 150,000 ounces of gold manufacturing by subsequent 12 months.

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