Stuart McKinnon
Blackham’s debt crisis eases
Embattled gold miner Blackham Resources has taken another step towards securing its short-term future by tapping contractor and creditor MACA for a $14.3 million loan to help it out of its cash crunch.
The MACA loan will enable Blackham to meet a $14.8 million debt repayment owed to its financier, Orion, which fell due at the end of last year.
Orion, MACA and former contractor Pybar have also agreed to jointly sub-underwrite a $36 million rights issue to the value of $13 million, which will be arranged and underwritten by Perth broker Hartleys.
Blackham’s non-executive turned executive chairman Milan Jerkovic will also sub-underwrite the rights issue to the tune of $500,000.
The company will use the cash to stabilise its operations, repay MACA and Pybar the $10.4 million it owes them and begin staged repayments of $20.5 million it still owes Orion.
Blackham forecast that its cash reserves would not fall below $15 million in 2018.
The Goldfields miner announced yesterday its $36 million rights issue would be priced at 4¢-a-share, a discount of more than 50 per cent to its last traded price of 10.5¢.
Former Resolute Mining chief financial officer Greg Fitzgerald will join Blackham’s board as a non-executive director while mining engineer and MACA board member Linton Kirk would be appointed to a new technical advisory committee, along with experienced gold mining geologist Jonathan Lea.
Blackham’s 6.5Moz Matilda-Wiluna operations bled cash last year because of high strip ratios and a lack of access to high-grade ore resulting in average operating costs of $1962/oz.
But Mr Jerkovic said the company had recently accessed high-grade ore zones, delivered record gold production of 3294oz in the past two weeks and achieved a step-change in project economics.
Blackham said operating costs had fallen to $1359/oz in December and it was targeting costs of $1100 to $1200/oz this half.
Shares in the company were suspended before Christmas after private equity outfit Pacific Road Capital pulled out of a $60 million funding package initially flagged in November.
The withdrawal meant Blackham could not meet the $14.8 million due to Orion on December 31.
Orion subsequently agreed to a stay on the repayment.