Blackham slashes production guidance

Goldminer Blackham Resources has substantially downgraded its production guidance for the 2020 financial year, citing operational delays at two of its Western Australian mines.

Blackham expects to produce 61,500 ounces of gold in FY20, down from between 70,000oz and 80,000oz, at a higher all-in sustaining cost of $1,975/oz, compared with $1,550-$1,750/oz as outlined by the company in January.

West Perth-based Blackham said a foreseen delayed access to high-grade ore at the Williamson mine had pushed gold production planned for this month into July.

As a result, meant mining activities were redirected to three very small pits at Wiluna to deliver immediate higher-grade ore to the plant.

Ore from all three pits had grade reconciliation issues, resulting in lower than expected ore processed in June.

Blackham also disclosed equipment and manning issues experienced at the Golden Age underground mine, resulting in constrained production for the June quarter.

Some of the production scheduled for this month will be mined in the next quarter as a result.

The company said its transition from free milling into sulphide production, expected by September 2021, had “faced many challenges”, including the onset of COVID-19.

“However, despite these challenges, the company remains focussed on its long-term strategy to develop its large sulphide mineral resource base,” Blackham said.

“The company remains confident that the current issues associated with the transition period at Williamson and Golden Age are nearing a point where steady state-production can be maintained, enabling the company to focus on the delivery of the Stage 1 Sulphide project.”

Blackham said recent high-grade drill intercepts reported from the Golden Age drilling programs are expected to increase the mine’s production rate.

Crushing and milling circuits are consistently running at around 20 per cent above capacity, Blackham said, and open pit mining movements are meeting expectations for the quarter.

Blackham shares closed down 11 per cent to trade at $1.32.