Ora Banda Mining signs A$15 million credit approved offer with Commonwealth Bank

Ora Banda Mining Ora Ltd () (FRA:M6N) has signed a A$15 million credit approved offer with the () (OTCMKTS:CBAUF) (FRA:CWW) for hedging and working capital purposes to support prudent risk and capital management during the ramp-up phase, subsequent to the first gold pour at Davyhurst on February 7, 2021. 

In a separate statement, the company announced the appointment of Peter Nicholson as chief executive officer (CEO) with effect from April 2, 2021. 

Support of Australia’s largest bank

Ora Banda managing director David Quinlivan said: “As was foreshadowed in the definitive feasibility study announced in June 2020, the company sees the addition of these credit facilities as a prudent step in the management of risk and working capital.

“We see this as a significant step, given the company’s recent transition from developer to a producer with significant exploration upside.

“We are pleased to have the support of Australia’s largest bank, the Commonwealth Bank, as the company ramps up production

Facility details

The offer has two components:

• A$5 million for the purchase of put options; and
• A$10 million for development expenditure and general working capital.

The maturity date is the earlier of 12 months from financial close or February 28, 2022, with repayment via a bullet payment.

This facility enables management to undertake discretionary gold hedging.

A minimum hedge requirement of 20% of forecast gold production for an 11-month period applies where the working capital facility is drawn.

The working capital and hedging facilities are both subject to the execution of formal documentation and conditions precedent customary for a financing of this nature.

Management change

Quinlivan, the current Ora Banda managing director and CEO, will continue in both roles until the appointment date, after which he will continue as managing director.

He will relinquish this position in the short to medium term, and take on the role as a non-executive director of Ora Banda, when Nicholson will take on the role of managing director as well.

The timing of that proposed change will be determined by the board to ensure an orderly transition of all executive functions.

An announcement of the end of the transition period will be made in due course.

Significant appointment

Ora Banda chair Peter Mansell said: “This is a significant appointment for the Ora Banda and we look forward to welcoming Peter to the company and benefitting from his diverse suite of skills.

“Peter’s strong combination of technical, commercial and operational expertise and experience will be a substantial contributor to the ongoing success and growth of Ora Banda.

“Attracting someone of Peter’s experience and skills reinforces the calibre of the project and the potential of Ora Banda.”

Look forward to Quinlivan’s involvement

“David took on the role as MD and CEO of Ora Banda on an interim basis at the time of the administration of Eastern Goldfields,” Mansell said.

“It was not a role that he was seeking, but it is a role that he has performed exceptionally well and with passion.

“That Ora Banda has achieved every deadline it committed to on time and on budget is testament to the competence and discipline of David and his team.

“It is a measure of David’s commitment to the company that, while he is keen to move to a non-executive role, he is prepared to participate in any orderly transition to Peter.

“We thank David for his contribution and look forward to his continued involvement with Ora Banda as a non-executive director.”

Confident of company’s success

Nicholson said: “I am excited to be joining the team at Ora Banda.”

“The company is a debt-free new gold producer with a large tenement holding in a prolific gold producing…