We are initiating coverage on Ora Banda Mining (OBM) with a SPEC BUY rating and set a A$0.40 price target. The ramp up of the Riverina Underground mine should see OBM lift production from ~65kozpa to ~100kozpa by the end of FY25. The development of the Sand King underground should enable OBM to sustain the ~100kozpa run rate for 3-4 years, with potential to extend this through exploration success. We expect OBM to start generating strong cash flow as production increases, with exploration success that extends the potential life of Riverina and Sand King presenting key near-term catalysts for the stock. Operating the Riverina and Sand King underground mines in parallel could lift group production well above 100kozpa and remains upside to our base case.
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