The equity capital raising comprises a $26.2 million two-tranche placement to sophisticated and professional investors, and a fully underwritten non-renounceable pro-rata entitlement offer to raise up to $26 million.
In addition, Blackham is progressing towards unlocking an additional $40 million of project debt funding after signing a non-binding term sheet with Mercuria Europe Trading Ltd for a loan facility.
It is anticipated that the agreed terms and final credit approval will be received in the coming months.
Total funding package of $92 million
Assuming shareholders approve tranche two of the placement and the company concludes the project loan facility negotiations, the total funding package totals $92 million.
The funding package will enable Blackham to progress its operating strategy at its flagship Wilunda Gold Project where it aims to expand gold production.
This will complement the existing free milling capacity to include stage-1 sulphide concentrate production as well as an expanded production rate of 100,000-120,000 ounces per annum from early 2021.
Targeting more than 250,000 ounces of gold per annum
Blackham boasts a geological endowment of more than 6.4 million ounces of combined free-milling and sulphide mineralisation within its existing mineral resources.
The company’s goal is to produce more than 250,000 ounces per annum of gold with the option to process both styles of free-milling and sulphide mineralisation often seen within the same deposit.
To deliver this operating strategy and take advantage of the existing infrastructure, Blackham intends to carefully apply capital in a staged approach.
The first step - contributed the capital raising, includes securing the funding to execute stage-1 of the expansion plan.
This step is intended to increase gold production to a level of around 100,000-120,000 ounces per annum.
Proceeds to advance expansion plan
Proceeds from the entitlement offer and the tranche-1 placement are intended to advance stage-1 of the expansion plan and the following company programs:
- Construction of a sulphide processing plant and associated infrastructure and mine development;
- Drilling program to expand reserves and resources;
- Retirement of existing secured debt to refresh the balance sheet as a precursor to drawing down on a to be agreed project loan facility;
- Feasibility work associated with phase-2 expansion to target more than 250,000 ounces of annual gold production;
- Ongoing regional and brownfields exploration program; and
- Improvement of working capital position.