Ora Banda’s Sand King underground mine receives green light

The board of Ora Banda Mining (ASX: OBM) has approved a final investment decision of $39 million for the development of the Sand King underground mine at its Davyhurst gold project in Western Australia.

Sand King – the second mine brought onstream by the company in less than two years – is scheduled for first production before year-end and steady-state production of approximately 60,000 ounces per annum by mid-2025.

The mine’s development costs will be funded from existing cash and revenue from Ora Banda’s Riverina underground mine.

Mid-tier ambitions

Managing director Luke Creagh said the decision to develop Sand King aligns with the company’s plans to own and operate at least two high-grade mines and achieve mid-tier status by June 2025.

“This is a very exciting time as our team has achieved a significant amount in a short period by discovering two underground mines in less than two years, indicating the significant prospectivity of the belt,” he said.

“We are firmly on the pathway to becoming a mid-tier gold producer and the most exciting part is that we are only just beginning to unlock this highly-prospective and underexplored tenement package.”

Exploration plans

Mr Creagh said the company had planned a significant exploration effort at Riverina and Sand King to test highly-prospective underground targets and expand the combined resource.

It has budgeted approximately $25m for exploration in the financial year 2025 and up to $40m for the following period, coupled with other investments to improve Davyhurst’s infrastructure and processing capabilities.

An initial 45km underground drilling program has been scheduled to commence in the December quarter.

Production outlook

Combined production from the historic Riverina and Sand King mines is expected to represent a step change for Ora Banda as it grows towards a production outlook of 150,000ozpa in 2026 and reduces its all-in sustaining cashflow to below $1,890/oz.

It will also provide greater operational flexibility and exposure to the potential upside of two significant mineralised systems.

Ora Banda recently announced a 176% upgrade to the underground resource at Sand King to 3.4 million tonnes grading 2.8 grams per tonne for 306,000oz (previously 110,000oz).

The resource is believed to be open in all directions and has only been drilled to a depth of 300m below the surface.

Sand King history

Sand King was previously owned by Western Mining Corporation from the late 1980s to 1991, with the company employing open pit methods and producing approximately 50,000oz at 4.8g/t gold.

Ora Banda’s mine design is based on a conventional top-down longhole open stoping mining method commonly used in Western Australia’s goldfields.

It will consist of one main access portal and a second vent adit, which will be mined from underground breaking back into the Sand King pit.