OBM has released some encouraging drilling results that have confirmed mineralisation at Riverina extends to 1km below surface, nearly double the current base case mine plan. We have increased our mining inventory for Riverina to better reflect the likelihood of extensions to resources, which increases the mine life at Davyhurst by eighteen months. OBM has upgraded its FY25 capital and exploration budget by ~50% to accelerate drilling and development activity. The extension to the mine life and an increase in the regional exploration option value to A$255m post the Little Gem discovery, has driven a 5% lift in our price target to A$1.00, however, with the stock trading only slightly below this level, we reiterate our HOLD rating.
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