Blackham Resources cements gold alliance with $13 billion Russian major

Blackham Resources Polymetal Group offtake gold ASX BLK Wiluna
Blackham Resources has signed an offtake deal with Polymetal International for 70% of stage one production from its Wiluna gold project.

Wiluna gold producer Blackham Resources (ASX: BLK) has signed an offtake agreement with Russia’s Polymetal International and sealed a long-term relationship by appointing the London-listed company as its sales agent for future Wiluna concentrate output.

The initial sales agreement covers 70% of Stage 1 concentrate production from the Western Australian project, or 122,500 tonnes (whichever is greater), for the first three years.

The long-term strategic agreement will see Polymetal, which is capitalised on the London Stock Exchange at £6.47 billion (A$12.98 billion), as the agent or principal for up to 100% of concentrate from the expanded Wiluna Stage 2.

Polymetal is a top-20 gold and top-5 silver producer. It is domiciled in Jersey.

Blackham’s Wiluna project in Western Australia covers more than 1,100sq km of tenements, including 65km of strike. The town of Wiluna was established as a result of the 1896 gold rush  and saw its glory days of gold mining in the 1930s.

Since Blackham began operations in 2016, oxide ores have been processed but the large majority of the resource base consists of sulphide ores.

A world leader in refractory ore processing

Using pressure oxidation (POX), Polymetal has become a world leader in treating refractory sulphide gold ore, with its first plant constructed at Amursk, near the Pacific coastline of Siberia.

A second plant is under construction and will be completed in late 2023, giving Polymetal capacity to treat 500,000t per year of concentrate to produce about 1 million ounces.

Blackham said its alliance with the Russian company aims to minimise the harmful environmental impact of mining and processing refractory sulphide ore by using ecologically efficient POX.

The two companies will share technical and market information aimed at expanding Wiluna and also seeking other regional gold concentrate opportunities with refractory ores.

“Significant milestone” for Blackham

Blackham executive chairman Milan Jerkovic described the new agreement as a “significant milestone” for the Perth-based gold miner.

“Longer term, this will enable the company to expand its production from Wiluna and consider other regional opportunities,” he said.

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