Blackham in $23m deal

Gold producer Blackham Resources has announced a $23 million funding deal with New York-based fund manager The Lind Partners to repay lender Orion and finalise an expansion study for the Wiluna project.

Under the arrangement, Blackham will be able to draw a maximum of $23 million in a number of tranches.

Lind’s initial $7.5 million investment will be provided as a secured convertible note over a two-year term, with a $9 million face value.

The proceeds, along with Blackham’s current cash reserves, will be used to repay $13 million of short-term debt owed to Orion.

The gold miner then plans to redirect operational cash flows to expand its reserves and finalise the Wiluna expansion definitive feasibility study.  

Blackham managing director Bryan Dixon said the company had boosted gold output since January.

“The current financing from Lind will remove short term debt service payments, improve our balance sheet and allow us to reallocate operating cash flows to expand production levels,” he said.

“The Lind Partners has been a long‐time supporter of and investor in Blackham, and we are pleased to continue our relationship with Jeff Easton and The Lind Partners.”

After February 14 next year, the company will repay the amounts owed to Lind via monthly instalments of 1/12th of the face value, which can be paid in cash or shares.

If in shares, the price will be the minimum of 8 cents per share or 90 per cent of five daily volume-weighted average prices during a specified period of time.

Additionally, the company can use cash to redeem the entire outstanding amount at any time for no penalty, subject to Lind having the right to elect to convert 30 per cent of the face value at the conversion price.  

Blackham will issue 72 million options to the fund manager with an exercise price of 8 cents and an expiry of 5 years from issue.  

Shares in Blackham fell 2.13 per cent to 4.6 cents each today.