Blackham Resources Ltd (ASX:BLK) has raised $25 million through the placement of 25 million shares at $1.00.
Funds will be used to fast track expansion plans at the 100% owned 5.1 million ounces of gold, Matilda Gold Project, located in Western Australia.
Mining has commenced and first gold production is targeted within three weeks.
Bryan Dixon, managing director, commented: “The funding allows for a significant drill budget aiming to lengthen the mine life.
“We will also be fast tracking the plant expansion study on the Matilda-Wiluna Gold Project that has a gold endowment greater than nine million ounces.”
Use of funds
The placement proceeds will be used at Blackham’s Matilda Gold Project with the aim to:
- expand the oxide and free milling resources and reserves;
- grow the sulphide open pit and underground mine plan and reserves;
- fast track the plant expansion study and sulphide circuit refurbishment; and
- strengthen the balance sheet and increase working capital.
Matilda gold production is targeted within 3 weeks with the following site updates:
- Matilda open pit mining is into ore;
- Crushing circuit has been energised;
- Mills are mechanically complete and relining has commenced;
- Leach tank wet commissioning expected later this month;
- New tailings dam commissioning in August;
- Power station has been commissioned; and
- 290 room camp fully operational.
Recent drill results
Recent results from underground drilling at the Bulletin mine, within the Matilda Gold Project, included the following highlights:
- 6.0 metres at 26.4g/t gold;
- 15.6 metres at 7.51g/t gold; and
- 8 metres at 7.05g/t gold.
This current program will allow resources to be upgraded from unclassified or Inferred to Indicated.
The Bulletin ore reserve is currently 938,000 tonnes at 4.7g/t gold for 142,000 gold ounces, but this is expected to increase following recent results.
By raising a fast $25 million, Blackham are able to provide themselves with a funding buffer, which in turn, de-risks project operations.
The recent drill results from Bulletin and the success Blackham have seen in their district exploration program highlights the opportunity of a larger exploration budget, which this funding also provides.
Furthermore, the operations update from the Matilda Gold Project shows that Blackham remain on schedule to pour its first gold bar.
Production timing for Blackham is fortuitous with the AUD gold price continuing to trade strongly, currently at A$1,755 per ounce.
An expansion study is underway aiming to grow annual gold production to 175,000-235,000 ounces of gold and better monetise the large resource.
Shares in Blackham are up over 370% year to date, currently trading at an all-time high of $1.10 per share.
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