Blackham Resources continues record gold production run at Matilda-Wiluna operation

Blackham Resources ASX BLK gold production Matilda-Wiluna operation
Blackham Resources's record gold pour of 1,914oz.

Blackham Resources (ASX: BLK) has continued its positive run with news of another month of record gold production from its Matilda-Wiluna gold operation in Western Australia.

This February achievement of 6,713 gold ounces exceeds the previous month’s record of 6,498oz.

Blackham has attributed the boosted production to higher grade ore zones within the M4 and Galaxy pits which were reached late last year.

“February’s operational results demonstrate a continued improvement of the turnaround that commenced in December 2017,” Blackham executive chairman Milan Jerkovic said.

“Record production and further reduced costs from the operation underpinned another month of strong cash flow, whilst maintaining stockpiles with increased grades,” he noted.

Adding to the record production was the company’s lowest production costs with the all in in sustaining cost for gold output during February sitting at A$912 per ounce – an almost 60% fall on the A$2,247/oz operating costs posted in November last year.

The February operating costs were also more than 20% lower than the previous month’s, and under guidance, which is between A$1,100/oz to A$1,200/oz.

Gold sold during February commanded on average A$1,670/oz, topping up the company’s cash and bullion to A$31.4 million.

This sits against the company’s secured debt of A$43.8 million.

According to Blackham, despite inclement weather in the region, its expects its throughput and grades to further improve during March.

“We remain confident that 2018 will be a transformational year that will generate significant cash flows and value for Blackham and its shareholders,” Mr Jerkovic said.

Matilda-Wiluna gold operation

Blackham’s Matilda-Wiluna gold operation was initially commissioned in October 2016. Gold production between then and September 2017 was around 55,000oz.

The 1,100 square kilometre operation contains 6.5moz of gold resources, with the average grade of 3.1 grams per tonne.

In reserves, the operation comprises 1.2moz of gold.

A prefeasibility study into expanding operations was published in August last year and forecasts 1.47moz of gold production throughout the first nine years. Projected cash flow for this period is A$571 million based on a A$1,600/oz gold price.

Shares in Blackham surged almost 40% by mid-afternoon trade to sit at A$0.074.

Lorna has more than 10 years' experience as a finance journalist and editor. She has written for numerous industry publications reporting on various sectors, including: resources, energy, construction, biotech, pharma, science and technology, agriculture, and chemicals. Specialising in resources, Lorna has also covered a myriad of small and large cap ASX and dual-listed stocks.