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- Ora Banda Mining (OBM) secures $12.74 million in funding to advance its Riverina project in Western Australia
- The company struck a deal with its largest shareholder, Hawke’s Point, comprising an unsecured loan worth $11 million and a net smelter return royalty to Hawke’s Point in return for the remaining $1.74 million
- Ora Banda expects to receive the proceeds by December 23, with the cash to fund resource development and exploration at Riverina
- Hawke’s Point remains Ora Banda’s largest shareholder, with a current shareholding of 45.29 per cent
- Ora Banda is up 4.41 per cent and trading at 7.1 cents at midday AEDT
Ora Banda Mining (OBM) has secured $12.74 million in funding to advance its Riverina project in Western Australia.
The company penned a deal with its largest shareholder, Hawke’s Point Holdings, for the funding, comprising an unsecured loan and a separate payment for a net smelter return (NSR) royalty.
Hawke’s Point agreed to provide the company with an unsecured loan worth $11 million. There are no conditions to the drawdown of the loan, with the proceeds expected to reach Ora Banda by December 23.
The cash will be used to fund resource development and exploration at Riverina, capital expenditure and general working capital.
Ora Banda also signed an agreement with Hawke’s Point for the company’s wholly-owned subsidiaries to pay an NSR royalty on gold doré or bullion produced from its existing mining tenements from 31 December 2023 in return for $1.74 million from Hawke’s Point.
This royalty is payable at 0.9 per cent NSR and is capped at a total of 900,000 ounces of pure gold over 15 years.
Hawke’s Point may request the grant of security by the relevant subsidiary in regard to the royalty.
“This funding is a great outcome for shareholders because it allows Ora Banda to continue advancing the Riverina underground project without delays and demonstrates the support of our major shareholder, Hawke’s Point, to unlock the exploration potential of our highly prospective tenement package,” Ora Banda Managing Director Luke Creagh said.
“Importantly the funding package will also mean no dilution to shareholders whilst operational improvements strengthen the business in the second half of FY2023 ahead of the royalty becoming payable in calendar year 2024.”
Hawke’s Point remains Ora Banda’s largest shareholder, with a current shareholding of 45.29 per cent. The loan and royalty will further reinforce Hawke’s Point’s support for the company and the ongoing development of its projects.
Ora Banda was up 4.41 per cent and trading at 7.1 cents at midday AEDT.
