MACA is set to provide financial backing for Blackham Resources to undertake its stage one expansion of the Wiluna gold mine in Western Australia.
The stage one expansion will propel Wiluna to a yearly production of 120,000 ounces and a longer mine life.
MACA will provide Blackham with working capital of up to $12 million until February next year in the form of extended payment terms for its surface mining contract.
This facility goes on top of the $14.3 million secured loan previously provided by MACA, with cashflow impact expected to be negligible in the 2019 financial year.
Blackham will, in return, issue MACA 265 million ordinary shares, increasing the contractor’s shareholding in the former to over 19 per cent.
“We believe our continued support of Blackham and the alignment through MACA’s shareholding will result in a positive outcome for both parties as Blackham transitions into what is forecast to be a stronger operating period,” MACA operations director Geoff Baker said.
Blackham will use the facility to undertake mine development works at Wiluna, progressing it toward a sulphide expansion in 2020 by enlarging the tailings storage facility and mine planning for further shallow, near-plant free-milling open pit mines.
Investment in the March and June quarters is expected to realise benefits over the coming six months, with expected delivery of significant ore from the M1 North cutback and an increased volume of high-grade ore from the Golden Age Lower development from July this year.
“We are very pleased to announce the continued support of MACA, which allows the company to continue to prioritise improvements to operational performance and cost reduction to reduce debt and allow for the transition to the stage one expansion sulphide development, which will unlock the large sulphide reserves and resources at Wiluna,” Blackham chairman Milan Jerkovic commented.
MACA expects a positive cash inflow of around $20 million during the 2020 financial year based on the agreed terms.