Blackham Resources plans to raise $25.8 million to back its transition to a 100,000 ounce a year gold producer and beyond.
The capital will allow Blackham to launch a stage one expansion at its Matilda-Wiluna operation in Western Australia, propelling the mine to 100,000 to 120,000 ounces of production a year.
Blackham will also progress a stage two expansion to increase Matilda-Wiluna’s ore processing throughput to 2.2–3.3 million tonnes per year, producing a targeted 250,000 ounces a year.
The company’s definitive feasibility study (DFS) will cover the two-stage expansion, scheduled for the September 2019 quarter.
Contractor MACA will play a major role in the capital raising by taking up to $7.5 million of the issue in exchange for a reduced amount of debt owed to it by Blackham.
Company chairman, Milan Jerkovic, will also personally sub-underwrite $1 million and subscribe for his $160,000 entitlement.
Blackham is in discussions with various smelters and traders for gold concentrate offtake and financing for the stage one expansion of Matilda-Wiluna.
The investment decision follows Blackham’s divestment of its non-core assets, including the Wiluna cobalt-nickel project in Western Australia in October 2018.
Blackham has kept its focus on reducing mining costs involving updated open pit mining plans, improving mill throughput by 22 per cent, and increasing mined grades, with stoping to commence in the June 2019 quarter.
The Perth-based miner will continue to focus its drilling on Golden Age, Blackham’s highest-grade orebody in Matilda-Wiluna, with a view for further extending the underground mine plan.