Ora Banda Mining (OBM) has secured non-dilutive debt and royalty funding of $12.74m to advance its Riverina underground project at the greater Davyhurst gold project in Western Australia.

For the financing, the company signed an agreement with its largest shareholder, Hawke’s Point Holdings.

The financing comprises $11m in unconditional and unsecured loan, and a capped net smelter return royalty related to certain gold products to Hawke’s Point in exchange for $1.74m.

Furthermore, OBM signed an agreement with Hawke’s Point whereby certain wholly-owned subsidiaries of OBM agreed to pay a NSR royalty on gold doré or bullion produced and sold from the its existing mining tenements on and from 31 December 2023.

In exchange, OBM will receive A$1.74m from Hawke’s Point.

OBM managing director Luke Creagh said: “This funding is a great outcome for shareholders because it allows Ora Banda to continue advancing the Riverina underground project without delays and demonstrates the support of our major shareholder, Hawke’s Point, to unlock the exploration potential of our highly prospective tenement package.

“Importantly the funding package will also mean no dilution to shareholders whilst operational improvements strengthen the business in the second half of 2023 ahead of the royalty becoming payable in calendar year 2024.” 

The proceeds will be used by OBM to support the development of the Riverina project including exploration, resource development and capital expenditure.