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Highlights

  • FY25 gold production forecast lowered to ~95koz, down 5% from previous guidance.

  • All-in sustaining cost (AISC) revised up to ~$2,600/oz, exceeding prior top-end estimate.

  • Shares fell over 8% on 6 June to AUD 1.18 after update.

Ora Banda Mining Limited (ASX:OBM) has revised its full-year guidance for the Davyhurst Project, forecasting lower gold production and higher operating costs for FY25. The market reacted swiftly to the update, with shares falling more than 8% to AUD 1.18 on 6 June.

The company reported gold production of 12.1 thousand ounces (koz) for April and May, bringing year-to-date output to 82.5koz by the end of May. For June, the miner expects to produce up to 12.5koz, bringing the June quarter production estimate to approximately 24.5koz.

However, Ora Banda has now lowered its FY25 production forecast to around 95koz, representing a 5% decline from the lower end of its previous guidance range of 100koz to 120koz. Despite the shortfall, this revised figure still marks a 35% increase over FY24’s production of 70koz.

The company attributed the reduced production outlook to extended downtime at its processing plant, caused by the installation of lifter and liner upgrades to the primary mill. Additionally, the commissioning and ramp-up phase took longer than expected to reach targeted daily throughput rates of 3,700 to 4,000 tonnes per day (tpd).

Ora Banda has since completed the plant works, and the facility has now achieved performance levels of up to 4,000tpd. With operations stabilising, June production is forecast to hit the target monthly rate of 12.5koz, which aligns with the company’s goal of reaching an annual output of 150koz in future periods.

On the mining front, in June, combined output from the Riverina (8.5koz) and Sand King (6.0koz) deposits is projected to deliver around 14.5koz, with Riverina maintaining steady output and Sand King now ramping up as planned.

Despite operational improvements, the earlier processing disruptions led to a buildup in ore stockpiles. As of the end of May, stockpiles included 83kt at 2.8g/t (7.5koz) of medium-grade ore and 114kt at 1.2g/t (4.4koz) of low-grade material, which are expected to support future production.

In terms of costs, the company now expects all-in sustaining costs (AISC) to reach ~$2,600/oz, exceeding its previous top-end guidance of $2,500/oz by 4%. This increase is attributed to the combination of lower-than-expected gold output and operational inefficiencies during the plant upgrade period.