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Blackham Resources set to increase production at Matilda-Wiluna Gold Mine

Snapshot

The company remains on track to achieve its core objectives for the next 3 to 6 months while maintaining operations and output.

Blackham Resources Ltd - Blackham Resources keeps sight set on increasing production at Matilda – Wiluna Gold Mine

Quick facts: Wiluna Mining Corporation Ltd

Price: 1.47 AUD

ASX:WMX
Market: ASX
Market Cap: $147.42 m
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Blackham Resources Ltd (ASX:BLK) has sights set on increasing production at its Matilda–Wiluna Gold Operation in Western Australia’s northern Goldfields.

The project lies within the Wiluna Domain, one of the three largest gold systems in the region about 530 kilometres north of Kalgoorlie.

All three of these systems are controlled by ASX-listed gold companies including Northern Star Resources Ltd’s (ASX:NST) Jundee and Bronzewing belt to the east and Westgold Resources Ltd’s (ASX:WGX) Meekatharra belt to the west.

The operation comprises more than 1,600 square kilometres of tenements and has resources of 93.2 million tonnes at 2.1 g/t containing 6.4 million ounces (57% of which is indicated) and inclusive of reserves of 24.7 million tonnes at 1.7 g/t for 1.4 million ounces with a plus-10 year mine life.

Executive chairman Milan Jerkovic told Proactive that from a strategic point of the view, the company’s five core objectives included:

  • Repair the balance sheet;
  • Maintain and increase immediate operational cashflow;
  • Transition to gold concentrate production;
  • Expand gold production; and
  • Undertake exploration and feasibility to fully develop a more than 250,000 ounce per annum long-life gold operation.

He said that with the completion of the capital raising due shortly, strategies two to five were now the main priority.

“These strategies were established 10 months ago when I changed out the old management and set a new direction for the company.

“I established a 24-month timetable for this transformation, and we are 10 months into it and so far, we are on track.”

Targeting more than 250,000 ounces

Blackham’s goal is to annually produce more than 250,000 ounces 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, the company has intended to apply capital in a two-staged approach.

The first step, which comprised a $52 million capital raising, included securing the funding to execute stage-I of the expansion plan.

This step is intended to increase annual production to a level of around 100,000–120,000 ounces.

“Terrific achievement” raising funds

Jerkovic said it had been an interesting time for the company deciding to raise $52 million in the current market climate, which was roughly the same amount as its market capitalisation at the time of the announcement in February. 

“It has been a terrific achievement raising these funds in the worst two months the ASX has had since 1987.

“We are fortunate to have a greatly supportive major shareholder in Wilhelm Zours of Delphi who has backed us to the hilt in the last eight months.

“Zours is smart and has done his homework - been to site, spoken to our management team and has decided to back assets at Blackham when very view people would.

“We were also fortunate to have a backer like Simon Catt and his team at Arlington who have worked hard, introduced a number of tier-1 calibre of shareholders to the register and committed over $2 million of their own money which is extremely rare from modern-day brokers.”

With the resource to reserve conversion drilling having commenced, along with the tailings dam construction and the underground de-watering of the Wiluna mines, Jerkovic said the construction of the concentrator would be assessed according to how quickly the company ccould mobilise crews and equipment to site when the COVID-19 pandemic concluded.

While the final rate of annual gold production is set to be released in the feasibility study, he said the company hoped to double production to 1.5 million tonnes, which would equate to between 220,000 ounces and 250,000 ounces once stage II had been completed.

"Largest single-site undeveloped gold project”

“Wiluna is, in my opinion, the largest single-site undeveloped gold project in Western Australia.

“We have not even explored the underground sulphides below 500 metres which compared with peers like Jundee and Gwalia, is very shallow.

“There is real potential to significantly increase our resource and reserves at Wiluna and we have many other sulphide targets, including Regent that have significant potential.”

Strategic alliance

On March 31 Blackham announced a strategic alliance, along with an offtake agreement, with Polymetal International PLC (LON:POLY), which Jerkovic said saw the two companies put a deal together rather quickly.

“We first met the Polymetal Group at a conference in London last October - they recognised we had a substantial refractory sulphide resource and that we were looking at producing a sulphide concentrate and they started discussions with us.

“They are a large group who really are a technology company as much as a mining company with leading-edge knowledge and know-how on POX treatment of refractory ore with a requirement for a lot more concentrate in the future to feed their POX facilities.

“What they recognised in us was Blackham is soon to be a large-scale refractory sulphide gold concentrate producer with a long mine life, located in a tier-1 jurisdiction.

“What we saw in them, apart from them providing an offtake agreement, is a large, well-run company with exceptional know-how and IP on refractory ore treatment with facilities to treat our concentrate going forward and a willingness to engage with us strategically to assist us with our growth ambitions."

Expertise in building companies 

Jerkovic has more than 30 years’ experience in the mining industry with previous roles including chief executive officer at Straits Resources and founding chairman at Straits Asia Resources.

With the Wiluna mine complex boasting huge potential, he said the company would remain focused on developing under its headframe before looking at spreading its wings too far.

“My expertise is building substantial, multi-billion-dollar mining companies.

“We did it at Straits Resources and the major shareholders who have recently come on board want us to do that again - build another significant mining company using Wiluna as the key building block.”

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