viewWiluna Mining Corporation Ltd

Blackham Resources expects to reduce strip ratio as it stockpiles gold

More than 70,000 ounces of gold could be produced from Blackham’s portfolio this financial year.

Blackham Resources Ltd - Blackham Resources expects to reduce strip ratio as it stockpiles gold
Higher grade ore is now being mined at Blackham

Producer mines “highest margin” reserves

Blackham looks forward to an improved period of production as it benefits from investments made so far during 2019 as well as continuing to improve operational performance through cost reduction, and by mining its highest margin reserves to improve operational cash flow. FY20 should be an exciting period for Blackham as it progresses its strategy associated with its sulphide expansion project to unlock the large sulphide reserves and resources at Wiluna.

Blackham executive chairman Mr Milan Jerkovic

What does Blackham Resources do?

Blackham Resources Ltd (ASX:BLK) (FRA:NZ3) (OTCMKTS:BKHRF) is a West Australian producer focused on near-term revenue.

The company is set on mining 2 million tonnes a year of free milling ore for reduced costs while reducing its debt levels.

Its corporate strategy is to transition towards becoming a low-cost low-risk sulphide mining and tailings retreatment operation that produces to a scale of up to 120,000 ounces a year.

West Perth-based Blackham is led by executive chairman Milan Jerkovic, a geologist and minerals economist with more than 30 years’ experience in the mining industry.

The Xavier Group principal is the chairman of Geopacific Resources Limited (ASX:GPR) and a former chief executive officer of Aeris Resources Ltd (ASX:AIS).

What does Blackham own?

Blackham holds 1,600 square kilometres of prospective ground and more than 55 kilometres of strike length in the northern Yilgarn gold endowment area.

Its inventory includes 96 million tonnes of gold resources grading 2.2 g/t for 6.7 million ounces — with 58% of these resources in the indicated category.

Gold reserves come in at 26 million tonnes grading 1.8 g/t for 1.5 million ounces.

The company’s lead asset is the Matilda-Wiluna Gold Operation in Western Australia.

Wiluna features more than 11 million ounces.

What will Blackham produce?

Blackham has narrowed its focus to Wiluna and is set to produce 70,000 to 80,000 ounces this financial year as a company.

The producer’s all-in sustaining cost (AISC) for productions are forecast as between A$1,550 and A$1,750 an ounce.

Blackham wrote on August 1, 2019, “Higher grade ore is currently stockpiling, with that trend continuing over the course of year, with significant high-grade stockpiles built up toward the end of the year.

“The FY20 average stripping ratio is expected to decrease from FY19’s 9 to 7, with grades improved over the previous year.”

Blackham reported it was largely unhedged and had forward gold sales contracts for 13,893 ounces priced at an average of A$1,835 an ounce, with these maturing by 2019 calendar year end.

The company said in its financial year 2020 guidance it was now accessing the main ore zones at the Matilda M1 North open pit and the Wiluna open pits of Happy Jack North and Essex, as well as Golden Age Underground.

It reported increased availability of ore and lower waste stripping for the September 2019 financial quarter.

Pre-stripping of Williamson open pit is expected to start this quarter, with ore production timetabled to begin in November 2019.

Blackham’s sulphate of potash (SOP)-focused neighbour Salt Lake Potash Ltd (LON:SO4) is expected to tip in $10 million to help cover the $15 million needed for pre-production at Williamson, if the collaborator completes a Lake Way brines transaction.

Producer Blackham’s AISC estimates include about $11 million for sustaining capital expenditure, including construction of a tailings storage facility.

Non-sustaining capital is about $5 million this financial year and would cover refurbishing Rod Mill plant to increase project throughput.

Blackham’s corporate strategy for Wiluna includes a sulphide expansion project that could add value as large reserves and resources were unlocked.

Inflection points

  • Lake Way and other significant transactions at Wiluna
  • Financing milestones
  • Gold and sulphate of potash commodity sentiments

Quick facts: Wiluna Mining Corporation Ltd


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