Ora Banda (ASX: OBM) Hits Bonanza Gold Grades – But After 161% Rally, Is It Time to Take Profits?

Ora Banda hits bonanza gold grades, but the rally raises profit-taking risk

Ora Banda Mining (ASX: OBM) is on a tear, and last week’s drilling update shows exactly why gold investors can’t stop talking about this stock. The company reported exceptional grades at its Golden Pole lode, including a jaw-dropping 2-metre intercept grading 87.5 g/t gold, sitting within a broader 7-metre zone at 27.4 g/t. For context, anything above 10 g/t is considered high-grade. These results are spectacular.

But here’s the question keeping investors awake: after surging 161% from its 52-week low of A$0.62 to A$1.62, has Ora Banda run too far too fast? Or is the best still to come?

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Waihi Could Become Ora Banda’s Third Underground Mine

What makes the Waihi discovery so exciting isn’t just the grades; it’s the location. The project sits just 3 kilometres from Ora Banda’s existing Davyhurst processing plant. That proximity means any future mine would cost far less to develop than a greenfield project, and ore could be trucked to the mill almost immediately.

Management clearly likes what they’re seeing. They started with a 45-hole drill program last July, expanded it to 97 holes as results rolled in, and have now added another 20 holes specifically targeting Golden Pole extensions. When a company keeps throwing more money at a drill program mid-campaign, it’s usually a strong signal.

The Golden Pole lode also comes with a historical pedigree. Between 1900 and 1939, it produced roughly 77,000 ounces at an average grade of 29.6 g/t, but historical workings only reached approximately 190 metres depth, leaving significant extensions untested. That’s where Ora Banda is now finding these bonanza grades.

A Producer With Real Momentum

Unlike many exploration stories, Ora Banda already runs two profitable underground mines at Riverina and Sand King. Last financial year, the company produced over 92,000 ounces of gold and reported a statutory net profit of A$186 million, a 575% increase from the prior year (though this was bolstered by a significant one-off tax benefit).

The growth runway looks equally strong. FY26 guidance points to 140,000 to 155,000 ounces, which would represent another 60% production increase. With A$84 million in cash and an undrawn A$50 million credit facility, Ora Banda can fund its aggressive A$73 million exploration budget without diluting shareholders. In the current gold price environment, financial flexibility matters.

The Investor’s Takeaway

Here’s the honest reality. At A$1.62, Ora Banda has surpassed most consensus price targets, which previously clustered around A$1.41 to A$1.44, suggesting the market is now pricing in a “discovery premium”.

Bulls will argue there’s more to come. Gold prices remain supportive, production is ramping up hard, and a maiden resource estimate for Golden Pole, expected in the June quarter, could provide another leg up.

Bears will point to the June quarter’s all-in sustaining costs (AISC) of A$3,583 per ounce. While management guides for costs to drop to A$2,800-A$2,900/oz in FY26, that spike remains a reminder that rapid growth can strain operations.

Our view? Long-term holders with a higher risk appetite may ride the momentum. But for investors looking to start a position now, waiting for a pullback towards the A$1.40 to A$1.50 range would offer a better margin of safety. The fundamentals are strong, but after a run like this, patience often rewards.