Ora Banda Mining will collect a cool $10 million for the sale of non-core tenements at Lady Ida, 65km south of its Davyhurst gold processing plant in WA’s Goldfields region.
The company says the move will strengthen its balance sheet ahead of a pending decision on the go-ahead for its Riverina underground gold mine. The sale package includes low-grade gold resources, three existing mining licences, four infrastructure-related licences and two licence applications. Ora Banda will retain the rights to all minerals on the tenements, except for gold and silver.
Ora Banda said the Lady Ida ground had not been scheduled for any production as part of the company’s target of 100,000 ounces of gold per annum in 2025.
The sale of the Lady Ida tenements to Lamerton Pty Ltd and Geoda Pty Ltd has several conditions, including the release of the tenements from an existing royalty held by London-based investment fund, Hawke’s Point. Mining leases included in the Lady Ida tenements have been the subject of applications for forfeiture and related Supreme Court proceedings. The purchasers are affiliates of that applicant, meaning the new deal will end Ora Banda’s defence proceedings on the forfeiture applications.
Ora Banda will receive $1 million on execution of the sale agreement and the remaining $9 million will be due 30 days later. Upon payment of the full $10 million, the purchasers will trigger the right to explore and mine for gold and silver in the tenements.
Ora Banda Mining Managing Director, Luke Creagh said: “The sale of these tenements for $10 million is a great outcome for Ora Banda shareholders as they do not align with our strategy to target high-grade underground deposits, nor is it included in our production target of 100kozpa supported by reserves.”
The company says it would have faced steep costs to establish haul roads and access between its Lady Ida tenements and its Davyhurst gold processing plant. Existing resources on the tenement have recorded lower grades than other Ora Banda resources, prompting the non-core status of the deposits.
Ora Banda expects to make a final investment decision on the Riverina underground gold mine at its March quarter board meeting, with a view to start mining after March 27. The company will also continue to explore other advanced high-grade targets.
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By Terry Bates
