Highlights

  • Ora Banda Mining has approved the construction of a new standalone 3.0 Mtpa nameplate capacity processing plant at Davyhurst for A$375 million, with GR Engineering Services selected as preferred EPC contractor at an estimated contract value of A$233 million, targeting commissioning in Q3 FY28.
  • The Board has also approved development of the Waihi Underground Mine — the company's third underground operation — for a Capital cost of A$90 million, with portal commencement scheduled for Q1 FY27 and first stoping ore from the high-grade Golden Pole lode expected in Q4 FY27.
  • Ora Banda's DRIVE to 300 aspiration targets a combined milling nameplate capacity of 4.2 Mtpa by FY29, backed by a pro-forma Liquidity position of approximately A$432 million, comprising cash of A$232 million and an upsized A$200 million revolving Credit Facility.

 

Ora Banda Mining Limited (ASX:OBM), the Western Australian gold producer with operations centred at the Davyhurst processing hub approximately 120 kilometres north of Kalgoorlie, has announced a suite of capital approvals that collectively represent the most ambitious expansion program in the company's history. Branded as the DRIVE to 300 aspiration, the initiative aims to double the company's gold production over approximately three years through a combination of a new processing plant, a third underground mine, and enhanced Balance Sheet flexibility.

OBM shares have gained approximately 33.86% over the prior twelve months to trade at AUD 1.35 on 18 May 2026, reflecting growing market recognition of the company's operational momentum and the quality of its resource base. The DRIVE to 300 announcements will now be the subject of close market scrutiny, as investors assess the execution risks and reward potential of what is a transformative but capital-intensive growth strategy.

The New Davyhurst Processing Plant: A $375 Million Capacity Leap

The centrepiece of the DRIVE to 300 initiative is the Board-approved construction of a new standalone 3.0 million tonnes per annum (Mtpa) nameplate processing plant adjacent to the existing Davyhurst facility — which currently operates at a nameplate capacity of 1.2 Mtpa, recently running at up to 1.4 Mtpa. The new plant will more than double the site's processing capacity, fundamentally transforming Davyhurst into a large-scale regional gold processing hub.

GR Engineering Services Limited has been appointed as the preferred EPC (Engineering, Procurement, and Construction) contractor for the new plant at an estimated contract value of A$233 million. Early works have already commenced, with long-lead item ordering and engineering underway. The total Capital Expenditure for the expansion, including the EPC contract, associated works, owner's costs, and contingency, is estimated at A$375 million, spread across FY27 and FY28. Construction is scheduled to begin in Q1 FY27, with commissioning targeted for Q3 FY28.

The plant design incorporates single-stage jaw crushing, a 6.0 MW SAG mill and 6.0 Ball Mill combination designed to achieve a P80 of 90 microns at 3.0 Mtpa throughput, and a Gravity plus Hybrid CIL recovery circuit with a designed plant recovery of approximately 91%. The new facility will Leverage existing ROM facilities at Davyhurst, and the company intends the existing plant to continue operating during construction, maintaining production continuity through the transition period.

Waihi Underground: Fast-Tracking High-Grade Ore

Complementing the processing plant expansion, Ora Banda's Board has approved the development of a third underground mine at Waihi, located approximately 4 kilometres from the existing Davyhurst mill. The Waihi Underground project is being advanced specifically to fast-track access to the high-grade Golden Pole lode — a mineralised zone that offers the opportunity to feed higher-grade ore into the processing circuit during the period that the company remains mill-constrained, ahead of the new plant's commissioning.

A Maiden Ore Reserve for Waihi Underground has been released alongside the expansion announcement, comprising 825,000 tonnes at 3.8 grams per tonne for 101,000 ounces of gold. Within this, the initial Golden Pole Ore Reserve stands at 254,000 tonnes at 5.0 grams per tonne for 41,000 ounces — a meaningful high-grade component that will drive the early production profile from the operation.

Portal development into Waihi Underground is scheduled to commence in Q1 FY27, with first ore expected in Q3 FY27, first stoping ore in Q4 FY27, and steady-state production targeted for Q1 FY28. The total capital cost for Waihi Underground is estimated at A$90 million. In addition to its production contribution, the Waihi Underground development will establish underground drill platforms that allow for rapid and cost-effective extensional drilling, potentially growing the resource base over time in a manner similar to successful campaigns at the company's Riverina and Sand King operations.

Balance Sheet Positioning: Funded for Growth

A growth program of this scale demands a robust funding foundation, and Ora Banda has moved to ensure its balance sheet is appropriately configured for the capital intensity ahead. The company entered the expansion period with a cash balance of A$232 million as at 31 March 2026 — a strong starting position that reflects the cash generation achieved over the preceding production period.

Complementing the cash position, Ora Banda has replaced its existing A$50 million revolving credit facility with a new, upsized A$200 million facility entered with ANZ and Commonwealth Bank of Australia. The new facility carries a three-year tenor through to 30 June 2029, with no mandatory hedging requirements — a feature that preserves the company's flexibility to manage its gold price exposure. Combined with existing cash, this produces a pro-forma liquidity position of approximately A$432 million.

To manage gold price risk during the capital-intensive construction period, the company has also put in place a gold price protection program. This includes AUD Gold Put Options over 149,994 ounces at an average exercise price of A$5,781 per ounce between May 2026 and October 2027, and partial collars for the November 2027 to June 2028 period, combining put options at A$6,000 per ounce with sold call options at A$8,400 per ounce. This hedging structure provides downside protection through the construction phase while retaining meaningful upside participation if gold prices perform strongly.

The DRIVE to 300 Aspiration: Scale, Cost and Strategic Logic

The combination of the new Davyhurst plant and the Waihi Underground development is designed to achieve 4.2 Mtpa of combined milling nameplate capacity by FY29, alongside substantial unit cost reductions through scale benefits, the elimination of third-party milling costs, and broader operating efficiencies. The dual-mill configuration will also mitigate single-asset processing risk — a meaningful operational resilience benefit.

It is important to note that DRIVE to 300 is explicitly described by the company as an aspirational target rather than a production forecast or target. The company acknowledges that it does not yet have reasonable grounds to believe the aspiration can be achieved, appropriate disclosure reflecting the significant execution dependencies — including EPC contract finalisation, construction performance, and underground mine development — that must be navigated over the coming years.

Share Performance and Market Context

The 33.86% appreciation in OBM's share price over the prior twelve months reflects the market's recognition of the company's operational execution at Davyhurst and the quality of its resource base in the prolific Eastern Goldfields of Western Australia. Gold prices have provided a supportive macro backdrop, and the scale of Ora Banda's resource position — combined with the demonstrated ability to ramp processing throughput above nameplate — has attracted increasing investor interest.

The approval of DRIVE to 300 represents a step-change in the company's risk-reward profile. Execution of a A$465 million capital program requires disciplined project management, sustained gold production from the existing operations, and continued gold market support. The company's liquidity position provides a meaningful buffer, and the gold price protection program reduces downside scenarios during the construction period.

Conclusion

Ora Banda Mining's DRIVE to 300 initiative represents a bold and well-funded growth strategy that, if successfully executed, would transform the company into a significantly larger gold producer with materially lower unit costs and enhanced operational resilience. The combination of a new 3.0 Mtpa processing plant, a third underground mine accessing high-grade mineralisation, a A$432 million liquidity position, and a prudent gold price protection program demonstrates a management team that is ambitious but cognisant of the risks ahead. The market will be watching execution closely over the next two to three years as Ora Banda seeks to translate this aspiration into demonstrable production and financial outcomes.