02/01/2018 - 13:25

Blackham secures two-week reprieve

02/01/2018 - 13:25

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Mining veteran Milan Jerkovic is taking the reins at embattled gold producer Blackham Resources, which has negotiated a standstill agreement on a $14 million debt repayment due this week and plans to ask shareholders to contribute $36 million of new capital.

Blackham secures two-week reprieve
Milan Jerkovic has taken up the reins of the company as executive chair. Photo: Attila Csaszar

Mining veteran Milan Jerkovic is taking the reins at embattled gold producer Blackham Resources, which has negotiated a standstill agreement on a $14 million debt repayment due this week and plans to ask shareholders to contribute $36 million of new capital.

Today’s update comes two weeks after Blackham said a $60 million funding package underpinned by Pacific Road Capital would not proceed.

The Pacific Road package included a $7 million private placement, sub-underwriting of a planned $12.3 million entitlement offer at 12 cents per share, and additional debt funding.

The gold producer said today the repayment date of its term loan from Orion Mine Finance had been postponed from December 31 to January 15.

Blackham said it was well advanced with negotiations to refinance the term loan.

It intends to follow the refinancing with a $36 million entitlement offer, but did not provide any details on pricing or management of the offer.

The term loan is worth $14 million and the company is carrying a further $23 million of debt, which it is also aiming to refinance.

Blackham’s mining contractor, MACA, said it has agreed in principle to support indicative terms of the proposed recapitalisation.

MACA said its involvement was subject to completion of due diligence and documentation.

Blackham said its plans also had the backing of its offtaker, Osisko Bermuda Ltd, and Pybar Mining Services.

The plans include non-executive chairman Milan Jerkovic (who has been in that role since November 2015) becoming executive chairman, taking a lead role in the operations and management of the business.

“I am looking forward to taking a more active role with Blackham as executive chairman in what I expect to be a transformational year of strong operational performance which will generate significant operational cashflow for Blackham and its shareholders,” Mr Jerkovic said in a statement.

The company did not provide any update on the role to be played by managing director Bryan Dixon.

Blackham’s funding difficulties come after a series of operational setbacks at its Matilda-Wiluna operations, which commenced production in October 2016.

The company’s share price briefly touched an all-time high of $1.17 in July 2016 and last traded at 10.5 cents.

The stock has been suspended since December 14 and will remain suspended until January 15.

Shareholder displeasure was reflected in voting at the company’s annual meeting in November.

The remuneration report attracted support from just 26 per cent of votes cast, with 56 per cent voting negative and the rest abstaining.

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