Highlights

  • Ora Banda Mining approved construction of a new $375 million 3.0 Mtpa processing plant at Davyhurst and a $90 million Waihi Underground mine as part of its DRIVE to 300 production aspiration.
  • Macquarie Research has issued an Outperform rating on OBM with a price target of AUD 1.70, against the current price of AUD 1.40 — implying approximately 21% upside.
  • OBM shares have risen nearly 40% over the past year, supported by strong gold prices, resource growth, and the announcement of a transformative Capital expansion programme.

Ora Banda Mining Limited (ASX:OBM) is a gold mining and exploration company based in Western Australia, operating the Davyhurst gold project approximately 120 kilometres north of Kalgoorlie. The company has been on a strong operational and strategic trajectory, having grown its resource base substantially and now embarking on a major capital expansion to double production through its DRIVE to 300 aspiration.

OBM shares traded at AUD 1.40 on 19 May 2026, up 0.08 or 6.04% on the day, and have gained nearly 40% over the past twelve months. This performance reflects a combination of strong gold prices, expanding mineral resources, and growing investor confidence in management's ability to execute on its growth strategy.

Broker Perspective: Macquarie Outperform at $1.70

Macquarie Research has issued an Outperform rating on OBM with a price target of AUD 1.70, implying approximately 21% upside from current levels.

DRIVE to 300: The Strategic Transformation Plan

On 18 May 2026, Ora Banda's Board approved the DRIVE to 300 aspiration — an ambition to deliver the company's next phase of growth targeting approximately 300,000 ounces of gold production annually. While management explicitly states this is an aspirational target rather than a production forecast, the approvals underlying it are concrete and committed.

The centrepiece of DRIVE to 300 is the construction of a new, standalone 3.0 million tonne per annum (Mtpa) nameplate processing plant at Davyhurst at a capital cost of AUD 375 million. GR Engineering Services has been selected as the preferred contractor for the engineering, procurement, and construction (EPC) component at AUD 233 million, with supporting infrastructure and capital contingency of AUD 142 million. Works are planned to commence in early FY27, with commissioning scheduled for Q3 FY28.

The second major approval is the Waihi Underground mine — Ora Banda's third underground operation — at a capital cost of AUD 90 million. The portal is to be established in Q2 FY27, with steady-state production targeted by Q1 FY28. The high-grade Golden Pole lode within the Waihi system, grading 5.0 grams per tonne over 254,000 tonnes in the maiden ore reserve, will be a focus of early development activity.

Mineral Resource and Ore Reserve Upgrade: A Step Change

Accompanying the capital approvals, Ora Banda released a substantially upgraded Mineral Resource and Ore Reserve statement on 18 May 2026. The total Mineral Resource estimate grew to 54.8 million tonnes at 2.0 grams per tonne for 3.57 million ounces — an increase of 1.46 million ounces from July 2025. The most dramatic component of this upgrade was the Round Dam Open Pit Resource, which increased 964% to 25.6 million tonnes at 1.6 grams per tonne for 1.33 million ounces, up from just 125,000 ounces.

The Waihi Open Pit and Underground Resource also grew 114% to 7.3 million tonnes at 2.1 grams per tonne for 482,000 ounces. Total Ore Reserves increased 136% to 7.8 million tonnes at 2.2 grams per tonne for 555,000 ounces, including a Maiden Waihi Underground Ore Reserve and a Maiden Round Dam Ore Reserve of 3.7 million tonnes from five open pits. These reserve upgrades provide the ore body confidence required to underpin the Capital Expenditure decisions being made.

Balance Sheet Strength and Financial Position

To support the capital programme, OBM has upsized its revolving Credit Facility to AUD 200 million and holds a cash balance of AUD 232 million as at 31 March 2026 — providing a combined Liquidity position of over AUD 430 million to fund the early stages of construction. The company has also structured gold price protection through AUD put options over 183,326 ounces at an exercise price of $6,000 per ounce, spread over May–June 2026 and November 2026 through June 2028, providing downside protection while allowing participation in higher gold prices up to $8,400 per ounce through sold call options.

The combined new processing plant and underground mine approvals will require approximately AUD 465 million in capital over the construction period, which management expects to fund through a combination of existing cash, operating cash flows from the current mine production, and the revolving credit facility.

Combined Processing Capacity and Cost Reduction Outlook

Upon completion of the new Davyhurst processing plant, OBM will have 4.2 Mtpa of combined milling nameplate capacity for FY29, incorporating the existing 1.2 Mtpa Davyhurst plant alongside the new 3.0 Mtpa facility. This scale uplift is expected to deliver substantial unit cost reductions through elimination of third-party milling costs, improved overhead absorption, and operating efficiencies from larger-scale processing operations. The establishment of dual-mill optionality also reduces single-asset operational risk — a meaningful consideration for investors assessing the risk profile of a junior to mid-tier gold producer.

Conclusion

Ora Banda Mining is at a defining inflection point. The Board's approval of $465 million in Capital Investment, a dramatically expanded resource and reserve base, and a clear production aspiration toward 300,000 ounces per annum collectively represent the most significant strategic step-change in the company's recent history. Macquarie's Outperform rating at $1.70 reflects confidence in the execution plan, the quality of the ore body underpinning the investment, and the favourable gold price environment. For investors, the central questions will be execution risk on the new plant construction, the pace of Waihi Underground development, and the trajectory of the Australian dollar gold price over the construction horizon to FY28.