OBM has approved the Sand King underground mine and also released detailed guidance for FY25 and FY26 for the first time. We have upgraded our production forecasts by 20% and lowered AISC by 18% to bring our FY25/FY26 forecasts within the guidance ranges. A faster ramp up at Sand King is a key driver behind the stronger production outlook in the near-term, while an expansion to the Davyhurst processing plant to 1.4mtpa underpins ~20% upgrades to our production outlook in the medium-term. We now expect OBM to sustain a ~150kozpa production rate for FY27-FY29. Exploration is a core growth strategy for OBM, with the annual spend on drilling set to rise to A$40mpa. With greater clarity on the outlook for OBM we move from Spec Buy to BUY. The material upgrades to earnings drives an 18% lift in our price target to A$0.53.
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