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Blackham Resources locks in buyer for stage 1 expansion gold concentrate

The deal secures stage 1 expansion offtake and creates an alliance that could lead to developing other sulphide deposits.

Blackham Resources Ltd - Blackham Resources locks in buyer for stage 1 expansion gold concentrate
Polymetal is a top-20 global gold producer and top-5 global silver producer with nine mines

Blackham Resources Ltd (ASX:BLK) and signed an agreement to sell the remaining planned gold concentrate production from its stage 1 expansion.

The gold concentrate purchase and sale agreement is with Polymetal International PLC (LON:POLY) and covers 122,500 tonnes of gold concentrate, or 70% of production, for the first 3 years.

The Stage 1 expansion is part of Blackham's operating strategy to expand gold production at the 6.4-million-ounce Matilda-Wiluna Gold Operations in WA.

Stage 1 intends to increase production to around 100,000-120,000 ounces of gold per annum.

Longer term benefits to the deal

Blackham’s executive chairman Milan Jerkovic said: “Establishing a relationship with Polymetal for the sale of all non-committed portions of Stage 1 gold concentrate production is a significant milestone for Blackham to deliver stage 1.

"And then entering into an ongoing alliance agreement with a significant global counterparty such as Polymetal provides a technical and strategic pathway for the company’s vision to develop its sulphide deposits.

"Longer term this will enable the company to expand its production from Wiluna and consider other regional opportunities.

"We look forward to working with and developing the relationship with a partner that will help provide a sustainable and commercial outcome for the Wiluna Goldfields."

Strategic alliance formed

Blackham and Polymetal have also entered into a strategic alliance for project development and supply with the following key objectives:

  • Establish a process of a two-way technical and market data exchange for further potential project expansion;
  • Polymetal will be appointed as an agent for 100% of Wiluna concentrate providing concentrates market and pricing visibility to Blackham;
  • To work cooperatively to investigate and achieve joint business development opportunities for gold concentrate production from other sulphide deposits in the West Australian Goldfields.

Quick facts: Blackham Resources Ltd

Price: 0.014 AUD

Market: ASX
Market Cap: $140.4 m

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on 28/2/19

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