Tumbling gold price pressuring Ora Banda shares despite new high-grade results
Ora Banda Mining Ltd (ASX: OBM) shares are tumbling today.
Shares in the S&P/ASX 200 Index (ASX: XJO) gold stock closed Friday trading for $1.28. In morning trade on Monday, shares are swapping hands for $1.18 apiece, down 7.8%.
For some context, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is down 0.7% at this same time.
In a better comparison of golden apples to golden apples, Ora Banda shares are moderately outperforming the S&P/ASX All Ordinaries Gold Index (ASX: XGD), which is down 8.9% this morning.
This comes as the gold price continues to get hammered in the wake of US President Donald Trump's appointment of Kevin Warsh to succeed Jerome Powell as Federal Reserve chairman. Gold is currently trading for US$4,801 per ounce, down more than 21% since Thursday.
Warsh's focus on combating inflation has traders pricing in higher US interest rates. That could throw up numerous headwinds for gold, which doesn't pay a yield itself and is priced in US dollars.
That's the macro picture.
Now here's the latest from the ASX 200 gold miner.
Ora Banda shares on the growth path
Though pressured by the falling gold price today, Ora Banda mining shares could get longer-term support after the miner announced another batch of "exceptional drill results".
The results come from Round Dam, an 18-kilometre-long mineralised trend located within the company's Waihi Project, in Western Australia. Ora Banda has been actively exploring the open-pit and underground mining potential along a 7.5-kilometre section of this trend.
Ora Banda has now completed 280 holes for 53,000 metres of drilling from its 62,000 metre Phase 1 exploratory program.
This morning, the miner reported it had identified up to six subparallel continuous gold lodes along the trend. The company said that early indications are that the Round Dam trend will be "highly amenable" to bulk tonnage open-pit mining with the added potential for high grade shoot development.
What did management say?
Commenting on the latest gold results that could help boost Ora Banda shares over the longer term, managing director Luke Creagh said, "At Round Dam we are looking at the potential for large-scale surface mining opportunities, enhanced by multiple, newly identified high grade shoots."
Creagh added:
Excitingly, the Round Dam Project is located only 15 kilometres from our existing Davyhurst processing infrastructure, with the potential for rapid resource development.
Today's Round Dam results are another highlight in the company's ongoing $73 million FY26 exploration strategy to target projects with the potential to become mines in short order supporting the company's organic growth strategy.
Despite now sinking a painful 29.8% since Thursday's close, Ora Banda shares remain up 85.2% since hitting one-year closing lows on 1 August.
The post Tumbling gold price pressuring Ora Banda shares despite new high-grade results appeared first on The Motley Fool Australia.
Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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