OBM has purchased 100koz of gold put options with an exercise price of A$4,400/oz. The options are exercisable over the FY26 fiscal year and provide OBM with downside protection to the gold price. The cost of this effective “gold price insurance” policy was A$14.2m. In addition, OBM has secured a two-year, A$50m revolving credit facility, which will provide financial flexibility during the production ramp up. We applaud OBM’s strategy in taking downside price protection, noting that the price secured is marginally below our forecast for FY26, hence we do not expect the options to be utilised. The progress of the ramp up of Sand King is the key driver of growth for OBM in the 2HFY25 and into FY26. We reiterate our HOLD rating and A$1.00 price target.
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