Shares in Ora Banda Mining Ltd (ASX: OBM) have appreciated by more than 56% over the past 12 months, but at least two brokers believe the stock still has a way to run.
The analyst teams at both Macquarie and UBS have bullish share price targets on the company, which we'll get to shortly.
Firstly, let's look at why they've recently published research reports on the company.
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Strong fourth-quarter production meets guidance
Ora Banda earlier this week published its quarterly production report, which showed the company produced a record 39,552 ounces of gold during the June quarter to meet its full-year guidance target.
The company said it had closing cash of $267.7 million at the end of the quarter, with total available liquidity of $468 million, including an undrawn $200 million debt facility.
The company had also, during the quarter, launched its "Drive to 300" initiative, which is a multi-year target to increase production to 300,000 ounces of gold per year.
Ora Banda Managing Director Luke Creagh said of the result:
Another transformational year for Ora Banda is a credit to the exceptional work of our teams who achieved records across nearly every metric as well as set ting up the Company to deliver outstanding value creation with the launch of our 'DRIVE to 300' Project. Our organic growth strategy continues to gain momentum, with material increases in Resources and Reserves, and operating cashflows continuing to strengthen the balance sheet . The business has more than $468 million of liquidity to fund capital projects as we target a doubling of production and a step-change down in unit costs by FY29.
Ora Banda's production guidance for the current year is 125,000 to 140,000 ounces of gold at an all-in sustaining cost of $3400 to $3600. Last year's production result was 140,949 ounces.
The company added:
Production is expected to be weighted towards the first half of FY27, with production supplemented by third-party processing through to October 2026 . Post October, the Company will commence building ore stockpiles ahead of commissioning of the new processing facility.
Ora Banda intends to spend $425 million in growth capital this year.
Brokers say this ASX gold stock is going cheap
UBS said it had lowered its price target on the company due to higher capital expenditure and lower estimated earnings.
The broker's price target for Ora Banda shares is now $1.45, down from $1.60, compared to the current price of $1.
Macquarie's price target on the shares is $1.30.
The broker said:
OBM is firmly in its growth phase growing production from 141koz in FY26 to >300koz in FY29 by using its balance sheet (liquidity of A$468m) and internal cash flows to fund it.
