Blackham Resources Ltd (ASX:BLK) has entered into a binding term sheet with A-Cap Resources Ltd (ASX:ACB) to farm-out a 75% joint venture interest in the nickel, cobalt and associated metals of the Wiluna Cobalt Nickel (Wilconi) Project in WA.
The company also reported its financial results for the year ended June 2018 today, delivering a 150% increase in revenue from gold and silver sales.
Blackham shares were up 0.3 cents, or 7.14%, to 4.5 cents intraday.
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Blackham chairman Milan Jerkovic said the company was delighted to have partnered with A-Cap to add value to the Wiluna project.
He said: “This transaction is consistent with Blackham’s stated strategy of divesting non-core assets allowing it to focus on its Matilda-Wiluna Gold Operation.”
A-Cap will acquire an initial 20% JV interest by making a cash payment to Blackham of $2.8 million within two days of the parties entering into the staged JV agreement.
On making the payment A-Cap will also acquire third-party exploration data for a payment of $100,000.
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A second earn-in interest of a further 35% may be acquired by A-Cap for a cash payment of $500,000 within a period of 24 months and after incurring minimum expenditure on exploration activities.
The third earn-in interest of 20%, bringing the total JV interest held by A-Cap to 75%, will be subject to completing the project’s definitive feasibility study within 36 months, a cash payment of $1 million and an issue of $1.5 million worth of A-Cap shares.
A-Cap intends to immediately begin a drilling campaign to bring existing inferred resources at Wilconi into JORC 2012 standard,
It will also conduct step-out drilling to follow anomalous cobalt away from the currently defined zones.
Blackham reported revenue of $118,252 for financial year 2018, up from last year’s $47,331, representing an increase of 150%.
All-in sustaining costs across Blackham’s operations were also reduced by 13%, from $1,875 per ounce to $1,629.
Gold production increased 79%, from 39,413 ounces to 70,565 ounces, and the gold sales price achieved was up 4% to $1,654 per ounce.
Strong production is expected to continue into financial year 2019 as high-grade material is accessed from the Wiluna open pits.
Despite an overall loss for the year, the company increased production by 31% in the second half and continuously made improvements to its process plant, delivering record output of 535,000 milled tonnes in the June 2018 quarter.
The loss of $20 million for the year, with $14.4 million incurred in the first half, was mostly due to low first half gold production at the Matilda-Wiluna Gold Operation.
Blackham intends to consistently achieve production of 80,000 ounces a year and create a pathway to unlocking value in its sulphide resource.
Production guidance for financial year 2019 is 77-89,000 ounces at an all-in sustaining cost of $1,250-1,450 per ounce.