24/02/2016 - 15:11

Blackham targets gold production in Q3

24/02/2016 - 15:11

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Blackham Resources hopes to begin producing at its Matilda gold project near Wiluna within six months, after a definitive feasibility study confirmed it will cost $32 million to bring the mine into production.

Blackham expects to begin producing gold at its Matilda project near Wiluna within six months.

Blackham Resources hopes to begin producing at its Matilda gold project near Wiluna within six months, after a definitive feasibility study confirmed it will cost $32 million to bring the mine into production.

In a statement today, Blackham announced the completion of the DFS, which added an extra two years on to Matilda’s initial mine life, now at seven years.

The 4.7 million ounces gold project is expected to generate EBITDA of $58 million in the first year of production and a five-year average of $62 million per annum, with life of mine cash costs expects to be about $850/oz.

Blackham expects to produce 101,000oz of gold per annum and 668,000oz over the life of the mine.

“The Matilda gold project DFS has confirmed the robust near-term cash flows from the project enabling us to benefit from the current strong AUD gold price,” Blackham managing director Bryan Dixon said.

“Matilda is the most capital efficient, nearest term producer and has the shortest payback amongst its WA development peers.

“It is an exciting time as Blackham implements its low-risk execution plan to become WA’s next gold producer.”

The $32 million capex required to bring the project into production is due to the existing plant and infrastructure on site, with only minor plant refurbishments required to restart the project.

Following completion of the DFS, Blackham’s board has committed to the implementation plan and development timeline for Matilda, with production targeted for the third quarter of the year.

Blackham entered into a $38.5 million funding facility with Orion Mine Finance in May last year, drawing down $13 million last year and plans to draw down a further $23 million to assist with the development of Matilda.

Blackham shares closed 3.2 per cent higher to 47.5 cents each.

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