Blackham flags $114m Matilda upgrade

Gold miner Blackham Resources has outlined a potential $114 million investment in its Matilda operation to boost production beyond 200,000 ounces a year, despite failing to hit its initial forecasts since production began in late 2016.

Perth-based Blackham released an expansion preliminary feasibility study on Matilda, which detailed plans to build a new crushing and grinding circuit, a new flotation circuit and a new carbon-in-leach circuit, as well as refurbishment of the existing sulphide treatment plant.

The goal is to increase the plant’s throughput rate by 1.5 million tonnes per annum to 3.3mtpa, at a cost of $113.9 million, with production to increase from 101,000 ounces a year to 207,000oz/year.

Completion of an expansion definitive feasibility study is expected by the end of the first quarter of next year, with the finalisation of works earmarked for June 2019.

The production goal appears ambitious at this stage, with Blackham having told the market last month that it would miss its production guidance for FY17 of between 42,000oz and 51,000oz, with 32,402oz produced in the year to date.

That guidance was revised in April, when the company disclosed a raft of problems at Matilda where heavy rainfall held back production, while underground mining activity found both development and stope tonnes were lower than previously forecast.

Blackham had originally hoped to produce between 64,000oz and 71,000oz in FY17.

“The expansion plan aims to achieve a step change in gold production from the 6.2Moz resource at the Matilda operation,” Blackham managing director Bryan Dixon said.

“The expansion PFS has confirmed gold production averaging 207,000ozpa is achievable on a very capital efficient basis for a likely long mine life.

“Very few Australian gold operations operate at this scale with long mine lives, which proves the significance of the Wiluna goldfield as a major gold province for the future.”

Blackham shares were 3.3 per cent lower to 29 cents each at midday.