Blackham’s redemption on track
The West Australian 9March18: Stuart McKinnonz
Shares in Blackham Resources surged yesterday after the beaten-down gold miner took another step towards redemption with investors by posting record monthly production.
The miner produced 6713oz in February, up 3 per cent on the previous month, representing a 13 per cent jump in mill feed grade to 1.5g/t.
Crucially, Blackham reported a 21 per cent fall in all-in sustaining costs to $912/oz in the month, ahead of second half cost guidance of $1100-$1200/oz.
Executive chairman Milan Jerkovic said he was thrilled with yesterday’s share price reaction, suggesting the heavy volumes pointed to institutional buying.
He said the company was on a sustainable path to profitable operations, noting high-grade stockpiles at its Matilda-Wiluna had risen to 144,000t at 1.7g/t at the end of last month and were expected to grow this month, providing a buffer to consistently feed its mill.
Blackham held $31.4 million in cash and bullion at the end of last month as well as secured debt of $43.8 million.
But Mr Jerkovic said Blackham hoped to use its cashflow from steady-state operations to retire debt and position itself for strong returns to shareholders as it pushed ahead with longer-term plans to lift production to 200,000oz a year.
“We remain confident that 2018 will be a transformational year that will generate significant cash flows and value for Blackham and its shareholders,” he said.
Blackham’s 6.5Moz Matilda-Wiluna operations were bleeding cash last year because of high strip ratios and a lack of access to high-grade ore resulting in steep operating costs.
Its shares were suspended before Christmas after Pacific Road Capital pulled out of a $60 million funding package initially flagged in November, leaving the miner without cash to meet a $14.8 million debt repayment due on December 31.
Blackham has since negotiated a deal with creditors to keep it operating while it bedded down a company-saving $36 million capital-raising last month.
Blackham shares were up 1.4¢, or 26.42 per cent, to 6.7¢ at 7.55am.
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