Blackham Resources Ltd (ASX:BLK) has been up to 22% higher after receiving high-grade gold results from resource development drilling at the Wiluna Gold Project which confirm the company's sulphide strategy.
The drilling which returned up to 14.45 metres at 17.16 g/t from 18.95 metres, including 7.45 metres at 31.22 g/t at Bulletin lode was designed to increase confidence in sulphide resources from inferred to the indicated category.
As Blackham looks to methodically grow the geological confidence in the high-grade sulphide resources around existing mine infrastructure at Wiluna, the results have seen shares reach 1.7 cents in early trade.
The company has a market cap of approximately $140.4 million and shares are up from 0.9 cents at close on May 14.
Blackham executive chair Milan Jerkovic said: “These outstanding results are delivering on our Stage 1 Sulphide strategy as we initially target shallow high-grade sulphides ‘under the headframe’.
“Our plan to convert the existing large inferred sulphide resources at Wiluna into indicated resources is gathering significant momentum and confidence with every new hole.
“These results will support further resource and reserve updates and mine planning work scheduled over the coming months.”
Broad, high-grade results
Other results from the Essex and Bulletin lodes include:
- 12.4 metres at 7.93 g/t from 31.4 metres (Bulletin);
- 12 metres at 7.01 g/t from 184 metres, including 4 metres at 16.59 g/t (Bulletin);
- 6 metres at 53.73 g/t from 109 metres, including 1-metre at 283 g/t (Essex);
- 4 metres at 12.08 g/t from 107 metres, including 2 metres at 21.30 g/t (Essex);
- 2 metres at 10.92 g/t from 133 metres and 2 metres at 5.43 g/t from 139 metres (Essex);
- 4 metres at 9.73 g/t from 128 metres (Essex); and
- 8 metres at 11.80 g/t from 144 metres, including 4 metres at 22.10 g/t (Essex).
Initial drilling is on track for completion in June 2020 with seven drill rigs in operation at Wiluna.
Wiluna Mining Centre showing scale of the operation and latest drill hole locations
Stage 1 Sulphide mine plan
Blackham’s strategy is to drill out high-grade inferred resources to enhance the first years of the Stage 1 Sulphide mine plan.
The preliminary mine plan includes Essex and Bulletin in the first two years, and in years three to four mining would extend to include the Calvert and East Lode areas.
Consequently, the company is undertaking aggressive infill and extensional drilling campaign targeted at the inferred resources associated with the initial years of the preliminary mine plan with production expected to ramp up from September 2021 to 100,000-120,000 ounces per annum, and a subsequent Stage 2 expansion aiming at more than 200,000 ounces per annum.
“Targeting high-grade shoots”
Jerkovic said: “The current underground sulphide resource at Wiluna averages 4.8 g/t but historically the average grade mined was between 7 to 8 g/t, and the Bulletin shoot alone produced 900,000 ounces at 8 g/t.
“We’re targeting high-grade shoot discoveries because every 1 g/t increase in the grade in the sulphides, could result in an additional 25,000 ounces per annum of production in Stage 1 and 50,000 ounces per annum under our Stage 2 scenario, so grade is obviously extremely important to project economics”.
Essex high-grade results infilling inferred resource and new lode discovery with existing underground access installed by previous operators to within 80 metres of the high-grade zone
Mineral resource development
With a combined open pit and underground resource of 35.5 million tonnes 3.90 g/t for 4.45 million ounces, including 2.2 million ounces (49%) in the inferred category, the company is confident there are significant opportunities for additional resources and life-of-mine extensions.
Further drilling beyond June 2020 is planned to continue and further grow resources and reserves and build on the existing 10 million ounces geological endowment at Wiluna with the focus now on the Calvert and East Lode zones.
The company expects an updated resource estimate to be published for the Wiluna project in the September quarter.
Results are also expected in the near-term from ongoing drilling at the high-grade Golden Age mine, with the aim to extend free-milling reserves for additional cashflow during the transition to sulphides production in September 2021.
Enhanced mineral resources and conversion to reserves underpin Blackham’s 24-month, five-point strategy to:
- Strengthen the balance sheet,
- Increase operational cash flow,
- Transition to include gold concentrate production,
- Expand production, and
- Undertake exploration and feasibility studies to fully develop a more than 200,000 ounces per annum, long-life gold operation.