Ora Banda Mining has secured funding support from shareholder Hawkes Point Holdings to continue developing its Riverina underground operation including exploration, resource development and capital expenditure.
Hawkes Point is the gold producer’s largest shareholder and will provide Ora Banda with an unsecured loan of $11 million towards work at the project near Kalgoorlie.
Ora Banda says there are no conditions to the drawdown of the loan and expects to receive the proceeds before the end of the week.
In addition to the loan, the gold producer has also entered into an agreement with Hawke’s Point where some of the company’s wholly-owned subsidiaries agree to pay a net smelter return royalty on gold doré or bullion produced and sold from Ora Banda’s existing mining tenements from 31 December next year in return for $1.74 million from Hawke’s Point. This royalty is payable at 0.9 per cent net smelter return and is capped at a total of 900,000 ounces of pure gold over 15 years.
Hawke’s Point may request the grant of security by the relevant subsidiary with respect to the royalty. The grant of any such security will be subject to Ora Banda obtaining any required shareholder approvals
Ora Banda Mining Managing Director, Luke Creagh said: “Importantly the funding package will also mean no dilution to shareholders whilst operational improvements strengthen the business in the second half of FY2023 ahead of the royalty becoming payable in calendar year 2024.”
Earlier this month Ora Banda extended mineralisation of its Riverina gold system by more than 100m to the south and 100m vertically with the deposit remaining open in all directions following positive assay results.
The company has completed 46 diamond drill holes for a total of 13,046m at the site as Ora Banda explores the system for underground mining potential. The success has encouraged the company to expand the program to 54 holes for a total of 15,331m.
Ora Banda says the latest results are expected to have a positive impact on the upcoming underground resource estimate that is on track to be updated in the March quarter of next year. A decision to mine the Riverina system is predicted for the second half of the 2023 financial year which could potentially put the company on the path to increasing its gold production.
Assay highlights from the latest drilling campaign at the company’s Main Lode East prospect include 2.5m at 29 grams per tonne gold from 232m, a 2.4m intercept going 26.4 g/t from 320.6m and a 1.2m hit recording an impressive 51 g/t gold from 257.8m.
The Murchison lode continues to deliver impressive grades with 1m going an outstanding 40.3 g/t gold from 171m, a 0.9m hit at 30.5 g/t from 118.1m and 0.7m grading 26.1 g/t gold from 507.3m.
The Main Lode West prospect also produced a number of high-grade hits with a 2m intercept grading 13.2 g/t gold from 330m including 1m at 25.1 g/t gold from 331m in addition to 1.4m going 14.2 g/t gold from 578m. Results have been returned from 29 holes with a further 17 holes currently being processed. Eight diamond holes remain to be drilled.
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By Matt Birney
