Blackham draws down $7m debt to get into production

Perth based Blackham Resources dream of restarting the old Wiluna Gold Mine supported by fresh reserves looks to be coming to fruition as the company yesterday drew down on a $7m debt facility from Orion Mine Finance.

The funding will be used to start ordering long lead time items required for production which is expected to commence mid 2016 and for initial plant and infrastructure refurbishment.

Blackham will also put the funds to good use by completing its Definitive Feasibility Study due in January 2016 and extending mine life inventory by way of a concentrated drilling program. 

Blackham originally struck a $38.5m financing deal with Orion back in May 2015, however $30m of those funds were agreed to be committed by Orion only after the company had completed a DFS on the Matilda Gold project to the satisfaction of the mining financier.

In a sign that Orion have been happy with the progress made by Blackham to-date, Orion have agreed to unlock a portion of the $30m debt funding even before the DFS has completed on the Matilda project.

Orion Mine Finance are a mining focussed investment house with approximately USD$1.8b under management.

They identified an early opportunity with Blackham by taking $2.5m in equity at 13c back in May this year. That stake has almost doubled at today’s prices.

Blackham have amassed a considerable resource at the Matilda Gold Project that now boasts around 4.7m ounces of gold grading around 3.3 grams to the tonne and all resources are within 20km of the mothballed Wiluna Gold Plant which the company purchased last year.

Importantly the old Wiluna Gold plant already has a 1.3Mtpa plant, a gas power station, borefields and a 350 person accommodation village all of which will no doubt put the project on the fast track to production.

Blackham Resources Managing Director Bryan Dixon said  “A lot of the DFS work programs have been completed. The early drawdown of these funds allows the Blackham team to look beyond the studies and begin the first stages of development work. Starting the refurbishment of the plant and infrastructure will allow a more orderly progression into gold production planned for the middle of next year.”