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Blackham Resources: Speculative Buy from BBY with $0.25 price target

Last updated: 08:30 12 Jan 2015 EST, First published: 09:30 12 Jan 2015 EST

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Blackham Resources (ASX:BLK) has received a Speculative Buy recommendation from Australia’s largest independent stockbroker BBY Limited with a price target of $0.25. 

Blackham is trading at $0.085.

BBY noted that in 2014, the company consolidated its position in the Wiluna gold field, reduced its capex hurdle and production timeline by acquiring processing infrastructure and increased its mine inventory.

“This year, once funding has been secured, we anticipate BLK to focus on enhancing the value of its flagship Matilda Gold Project and advancing it towards first production, which could be achieved as early as 2015,” BBY said.

“Our price target is underpinned by our preliminary base case valuation of $0.38 per share. However, significant upside exists should BLK improve the economics through the drill bit, or by lowering its costs structure.”


Matilda Gold Project


Blackham continues to advance its 4.4 million ounce Matilda Gold Project in Western Australia towards production with operations expected to restart in late 2015.

Discussions are ongoing with a number of potential funders that have expressed an interest in financing Matilda Gold Project through feasibility and into production.
    
Initial start-up capital to re-commission the project is estimated at $24.6 million while all-in sustaining cash costs are expected to be between A$1,000 and A$1,100 per ounce.

The project is projected to be cash flow positive within five months of development decision.

The Matilda Project consist of a number of open pit and underground deposits within 20 kilometres of the company’s existing 1.3 million tonne per annum gold plant.

These have JORC 2012 resources of 42 million tonnes at 3.3 grams per tonne for 4.4 million ounces of contained gold.

Under the first stage development, Blackham seeks to unlock free milling production of 100,000 ounces of gold per annum.

 

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