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Blackham Resources raising up to $7 million for key mine development work programs

Blackham’s gold mining operations are benefitting from a period of improved production in FY2020.

Blackham Resources Ltd - Blackham Resources raising up to $7 million for key mine development work programs
Production guidance of 17,500-19,500 ounces for the September 2019 quarter

Blackham Resources Ltd (ASX:BLK) is raising up to $7 million to provide funding for key mine development work programs that will underpin its FY20 production, including pre-production activities at the Williamson open pit, a new tailings storage facility and rod mill refurbishment.

The capital raising comprises of a $4 million placement at a price of 1 cent per share and a share purchase plan (SPP) to existing shareholders for up to a further $3 million, at the same price as the placement.

The placement was made to a small number of targeted international and domestic institutional and professional investors with settlement anticipated to occur by Monday, September 15 2019.

Shareholders whose registered address is in Australia and New Zealand as at 5:00pm (WST) on the record date of September 11 2019 will be able to participate in the SPP for up to $30,000.

If total demand for the SPP exceeds $3 million, Blackham reserves the right to close the SPP early and scale back applications in its sole discretion.

Strong cash flow generation

Blackham’s gold mining operations are benefitting from a period of improved production in FY2020 following investments in mine development made during the June half.

The company maintains its production guidance for the September 2019 quarter of 17,500-19,500 ounces at an all-in sustaining cost of A$1,550-$1,750 per ounce.

With the AUD gold price at around $2,270 per ounce, Blackham expects to generate stronger cash flow once its 8,554 ounces of forward sales contracts are delivered.

Furthermore, the Lake Way transaction is expected to complete in the coming weeks, which will provide Blackham with $7 million cash and a $10 million contribution towards Williamson pre-production activities.

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