Australian gold miner Blackham Resources Limited (ASX: BLK) has gained strong international support to raise a total of A$92 million to grow production to 120,000 Oz PA.
The company has also signed an indicative, non-binding term sheet with Mercuria Europe Trading Limited a large, European based trading group, for a A$40 million project loan facility.
Executive Chairman, Milan Jerkovic, said the company is particularly encouraged by the support of tier 1, international institutions who are participating in the Capital Raising, indicating their backing and endorsement of Blackham’s expansion and growth strategy, and the renewed management team.
Mr Jerkovic said the total funding package of $92 million will enable the company to progress its operating strategy to complement its existing free milling capacity to include the Stage 1 sulphide concentrate production and target an expanded production rate of 100 to 120,000oz per annum from early 2021.
“The company boasts a significant geological endowment with over 6.4 million ounces of combined free milling and sulphide mineralisation within its existing Mineral Resources,” Mr Jerkovic said.
“To extract maximum value from these Mineral Resources, the company’s goal is to reach +250,000oz per annum gold production with the optionality to process both styles of free-milling and sulphide mineralisation often seen within the same deposit.
“To deliver this operating strategy and take advantage of the existing infrastructure, the Company intends to carefully apply capital in a staged approach. The first step, contributed to by the Capital Raising, includes securing the required funding to execute Stage 1 of the expansion plan. This step is intended to increase gold production to a level of approximately 100-120koz p.a.”
Proceeds from the planned Entitlement Offer and the Tranche 1 Placement are intended to advance Stage 1 of the expansion plan and the following company programmes:
- Construction of a sulphide processing plant and associated infrastructure and mine development;
- drilling programme to expand reserves and resources;
- retirement of existing secured debt to refresh the balance sheet as a precursor to drawing down on a to be agreed project loan facility;
- feasibility work associated with Phase 2 expansion to target +250,000 oz. of annual gold production1;
- ongoing regional and brownfields exploration program; and
- improvement of working capital position.