Gold miner Blackham Resources has completed a $36 million entitlement issue with help from underwriters, as the company seeks to cut debt.
Gold miner Blackham Resources has completed a $36 million entitlement issue with help from underwriters, as the company seeks to cut debt.
Almost 900 million shares were available for subscription in the entitlement offer, and the company will issue five shares for every two Blackham shares held by subscribers.
About 73 per cent of the offer was taken up, with 655 million shares worth $26.2 million subscribed, while a further $5 million of additional applications were received.
Underwriters, lead by Hartleys, will make up the shortfall.
Sub-underwrites have included contractors Maca and Pybar, and finance player Orion Mine Finance.
It comes after a troubled period for Blackham, with the business struggling to refinance debts.
At the start of January, Business News reported Blackham had a debt of $37 million, $23 million of which was owed to Orion.
An earlier funding package fell over in December, with the company then forced to renegotiate with Orion to delay loan repayment.
Blackham had inked a $60 million agreement with private equity business Pacific Road Capital in November, which included elements of both debt and equity.
Maca agreed to lend the business $14 million in January and take equity.
Blackham executive chairman Milan Jerkovic took the helm at the company in January, after previously being non-executive chairman, as part of the strategy to secure a recapitalisation plan.
“It was very pleasing to see such a high level of participation in the entitlement offer and I would like to thank all shareholders for their continued and valued support,” Mr Jerkovic said today.
“We would also like to take the opportunity to welcome our new shareholders who will be taking up shortfall securities pursuant to the issue of shortfall securities to sub-underwriter clients of Hartleys Limited.
“The funds raised from the entitlement offer put Blackham in a strong position to execute on its free milling mine plan, as well as to advance exploration focussed on growing our free milling mine life.
“As demonstrated by the strength of our operations in December 2017 and January 2018, the company is at an exciting stage, with 2018 likely to be a transformational year of strong operational and financial performance.”
One positive for the business came in January when it produced nearly 6,500 ounces of gold, up 19 per cent from the prior period.
That was a record level of production for Blackham’s Matilda-Wiluna mine, the company said.
Shares in Blackham were 3.4 per cent higher at 6.1 cents each at the time of writing.
