Blackham Resources Ltd (ASX:BLK) is nearing the closure of its $52 million equity issue in April, after which the company expects to finalise a $40 million project finance proposal for the stage 1 expansion of the Wiluna Gold Mine.
The funding package will allow the company to finalise the expansion, which will result in production of between 100,000 ounces per annum and 120,000 ounces per annum in concentrate and gold ore.
Executive chairman Milan Jerkovic said: “Within the current quarter of dramatic global change due to COVID-19, Blackham has been relentless in advancing our stated two-year transformation plan: we have added clout and expertise to our leadership team, refinanced the company and achieved fantastic initial underground exploration results, while significantly upgrading the processing capacity and development of our Wiluna Gold Mine.”
While the company has experienced an impact on production from the cyclones Blake and Damien, there has been no impact on production, operations, explorations or on its supply chain from the virus to date.
Stage one activities progressing
The construction of tails storage facility K is near completion, the rod mill refurbishment is completed and successfully commissioned, and the dewatering of the East-West pits and underground mine is on schedule.
The engineering design for the sulphide flotation plant is close to completion with construction of the concentrator and filtration plant expected to take 11 months from approval.
The company recently revealed a funding package of up to $92 million by way of a placement of $26 million in two tranches.
Tranche one of $11.67 million is completed with funds received, and tranche two funds committed - subject to shareholder approval at a General Meeting to be held on 6 April.
In addition, a fully underwritten entitlement issue of $26.1 million by major shareholder Delphi has commenced and will close on 26 March.
Both the placement and entitlement issue at a price of 1.0 cents per share.
Blackham’s gold production remains largely unhedged, with current forward sales contracts of only 10,991 ounces at an average price of A$2,393 per ounce, maturing by 31 August 2020.
Jerkovic said: “Looking ahead to quarter four, we reaffirm our commitment to shareholders to deliver on our five-point strategy of transitioning to gold concentrate production, increasing operational cashflows, repairing the balance sheet, expanding gold production and advancing ‘under the headframe’ exploration, to underpin a future greater than 250,000 ounces/per annum long-life gold operation.
“We are 10 months into this two-year transformation process, and while there is still a lot of work to do, we are committed to building a safe, quality mining and exploration company, focused on creating value for shareholders.”