Production results lift Blackham’s prospects for future
Recent production results have given Wiluna miner Blackham Resources a leg-up in its bid to complete a $36 million rights issue and recapitalise the struggling gold producer.
The fully underwritten 4¢ a share entitlement offer is due to close on Monday as costs start to drop at Blackham’s Wiluna-Matilda gold operations. Blackham’s all-in sustaining costs climbed as high as $2236 an ounce in the September quarter and remained well above the prevailing gold price in the December quarter.
But figures released yesterday showed Blackham made margins of more than $500/oz in January, producing 6498oz at $1158/oz.
That was an improvement on the 5461oz at $1359/oz it generated in December. Executive chairman Milan Jerkovic said the results showed Blackham’s turnaround was “well under way”.
The miner’s operational struggles threatened the company’s collapse late last year before it was able to refinance its $39 million debt with New York-based Orion Mine Finance and gain the support of its major contractors to recapitalise the company and keep the Wiluna operations going.
Its shares were up 22 per cent or 1.1¢ to 6.1¢ yesterday, about 50 per cent higher than the 4¢ a share issue price for its capital raising, which is underwritten by brokerage firm Hartleys and sub-underwritten by Orion and contractors MACA and Pybar.
Blackham, which employs about 200 staff and contractors at Wiluna, had $12.3 million in cash and bullion at the end of January.