Blackham Resources (ASX: BLK) achieved record gold production in January at its 100%-owned Matilda-Wiluna gold operation – up almost 20% on the previous month, while reducing operating costs to historic lows.
During January 6,500 ounces of gold was produced at an average all in sustaining cost of A$1,158 per ounce.
Gold was sold for around A$1,663/oz, affording the company a much-needed boost to its cash reserves.
This is compared to 5,500oz gold produced in December at an average operating cost of A$1,359.
Cash costs were also slashed almost 50% on November levels which averaged A$2,247/oz of gold produced.
According to Blackham, the reason for the higher production and lower costs was accessing the higher-grade pits late last year.
“With the operation’s production at record levels and a significant reduction in all in sustaining costs having already been achieved, the company is clearly demonstrating that its operational turnaround is well underway,” Blackham executive chairman Milan Jerkovic said.
“This operational performance, in conjunction with the strong Australian dollar gold price, is expected to make 2018 a transformational year … to generate significant cash flows and value for Blackham and its shareholders,” Mr Jerkovic added.
Mining of higher grade ore is expected to continue during February, favourably positioning the operations for the coming months.
The Matilda-Wiluna gold operation encompasses 1,100 sq km of tenements and was commissioned in October 2016, with gold production between then and September 2017 tipping 55,000oz.
The operation contains 6.5 million ounces in resources with the average gold grade of 3.1 grams per tonne and 1.2moz of gold in reserve estimates.
A prefeasibility study into expanding the operation was published in August last year. The study estimates initial gold production of 1.47moz over nine years for a projected cash flow of A$571 million based on a A$1,600/oz gold price.
This compares to the initial study which projected production of 1.31moz gold over the same time frame.
Shares in Blackham had rocketed 32% to rest at A$0.066 in mid-afternoon trade.