There were 20,631 ounces produced at the Matilda-Wiluna Gold Operation in Western Australia in the three months, up 38% on the previous quarter.
Lower stripping rates and increased production saw Blackham reduce all-in-sustaining-costs (AISC) to $1,092 per ounce in the quarter, down 42% on the December 2017 quarter.
“The March operational results demonstrate a continuation of the step-change in project economics that commenced in December 2017,” chairman Milan Jerkovic said.
“Record production and significantly reduced costs underpinned a quarter of strong operational cash flows, whilst building stockpiles.
“We remain confident that 2018 will be a transformational year that will generate significant operating cash flows and value for Blackham and its shareholders.”
Record monthly production
The company also achieved record monthly production of 7,419 ounces in March, up 11% on February.
There were 165,000 tonnes milled in March, up from 150,000 tonnes in February.
Stronger gold production has been achieved after the company gained access to high-grade zones in the M4 and Galaxy pits late in the December 2017 quarter.
This has been boosted by lower open pit mining stripping ratio of 2.5:1 during the March quarter.
The average realised gold price during the quarter was $1,669 per ounce, representing an encouraging margin for Blackham.
In the September and December quarters of 2017, 248,000 tonnes and 206,000 tonnes of low-grade stockpiles were processed respectively at an average grade of 0.7 g/t.
This significantly reduced mill feed grade for those quarters but during the March 2018 quarter, it improved to 1.5 g/t while throughput increased 8% on the previous quarter.
Plant recoveries decreased slightly as deeper ore from the M4 pit was processed.
High-grade stockpiles totalled 127,000 tonnes at 1.5g /t at the end of the quarter.
This was lower than forecast in January 2018 due to lower mining material movements.
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Blackham’s transition in 2018 is supported by gold forward sales contracts of 27,400 ounces at A$1,724 per ounce for the remainder of the year.
At March 31 the company had cash and bullion of $29.2 million and secured debt of $40 million.
Production guidance for the first half of 2018 remains at 40,000 to 45,000 ounces at an AISC of $1,100 to $1,200.