ASX-listed debt-free gold miner Ora Banda Mining has chalked up a solid quarter of gold production at its recently revived flagship Davyhurst mining and processing operation about 120km north-west of Kalgoorlie in Western Australia’s Eastern Goldfields. The company achieved total gold output of 10,356 ounces for the three months ended June 30 from 201,817 tonnes of ore treated that went at an average head grade of 1.81 grams per tonne.
Perth-based Ora Banda prised most of the gold from the multi-deposit project’s Riverina open-cut and Golden Eagle underground mines as it kicked off mining at the Missouri open pit and commissioning of the Davyhurst processing plant continued during the quarter. Plant recoveries averaged 87.2 per cent for the period.
Riverina is located about 30km north of Ora Banda’s refurbished 1.2 million-tonnes-per-annum-capacity Davyhurst plant, Golden Eagle lies 3.2km away and Missouri sits about 40km to the south-east.
While operations were affected by plant stability problems and lower than expected grades, the company says improvement initiatives to address both these issues were under way.
Ora Banda says it anticipates continued ramp-up of the processing plant this month paving the way for definitive feasibility study or “DFS” levels of production from next month onwards.
Management has indicated it aims to produce just under 81,000 ounces at Davyhurst in the current financial year from the trio of keystone deposits.
Gold sales for the June quarter tipped the scales at 10,665 ounces for a realised price that averaged $2,352 per ounce and fetched about $25 million, leaving Gascoyne with a healthy cash balance of $24.2 million, no debt and unsold bullion of 857 ounces.
Davyhurst’s overall probable ore reserves drawn from six satellite deposits all within 50km of the plant – with the other three being Sand King, Waihi and Callion – weigh in at 6.1 million tonnes grading an average 2.4 g/t for 460,000 ounces of contained gold, prior to the recent depletion.
According to Ora Banda’s DFS on Davyhurst released about 13 months ago, an initial mine life of 5.2 years is extrapolated to generate base-case total free cash flows before tax of $174.6 million, or an average of $33.5 million a year, assuming a received gold price of $2,100 an ounce.
Gold production at Davyhurst has been forecast in the DFS to average 81,000 ounces per annum across the current life-of-mine projection, with base-case all-in sustaining costs tipped to come in at an average $1,566 an ounce.
Last month the company reported a swag of high-grade gold drill hits from the Iguana satellite deposit about 55km south of the Davyhurst gold production hub.
The pick of the bunch from the phase-one 27-hole resource definition reverse circulation drilling program for an aggregate coverage of 3,750m included 2m at 13.6 g/t gold from 136m, 4m at 7.9 g/t from 68m, 9m at 7.6 g/t from 181m and 4m at 7.6 g/t from 84m.
Ora Banda hopes to upgrade and build on the Iguana resource, which currently stands at an estimated inferred and indicated 2.72Mt at an average grade of 2 g/t for 175,000 ounces of contained gold.
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By Matt Birney
