ASX Announcement
19 December 2014
BOARD OF DIRECTORS
Paul Murphy
(Non-Executive Chairman)
Bryan Dixon
(Managing Director)
Alan Thom
(Executive Director)
Greg Miles
(Non-Executive Director)
Matilda Development Update
Blackham Resources Ltd ("Blackham” or “the Company") (ASX: BLK)
is pleased to provide a project status update for the Matilda Gold
Project. Blackham has been focused on increasing shareholder value
through targeted exploration and whole of project studies to maximise
potential return by being margin focused through strategic capital
expenditure and operating cost minimisation.
ASX CODE
BLK
Geology
CORPORATE
INFORMATION
143.6M Ordinary Shares
18.3M Unlisted Options
In conjunction with exploration and extension drilling of known
resources, confidence of current resources for conversion to reserves
has improved. Currently 72% of the resources contained in open pit
designs and optimisations are in the Measured and Indicated
category of resource confidence. This level of resource definition will
allow for quick conversion of resources once the engineering
parameters are finalised for the prefeasibility study (PFS).
ABN: 18 119 887 606
PRINCIPAL AND
REGISTERED OFFICE
Blackham Resources Ltd
L2, 38 Richardson Street
West Perth WA 6005
POSTAL ADDRESS
PO Box 1412
West Perth WA 6872
www.blackhamresources.com.au
E: [email protected]
P: +61 8 9322 6418
F: +61 8 9322 6398
The Matilda Gold Project’s 42Mt @ 3.3g/t for 4.4Moz gold resources
are now to JORC 2012 standard (see Table 2) which are all within a
20km radius of the Wiluna Gold Plant (WGP Plant).. At least 17Mt @
3.8g/t for 2.0Moz are in the Indicated Resource category. The
upgrading to JORC 2012 was a necessary pre-requisite for
completion of the Pre-Feasibility Study.
Metallurgy
After securing the WGP Plant in March, the Matilda Mine prefeasibility
metallurgical test work has been applied to optimising the milling
capability of the WGP plant. The planned processing route will be
crush, grind, gravity then CIL. The free milling ore is to be initially
processed through both Mill 1 and Mill 2 for an average throughput of
1.3Mtpa. Studies indicate that metallurgical recoveries from the
Matilda Mine will be in the order of 92%.
Galaxy metallurgical test work indicates very good average gravity
and leach recoveries of 98%.
Limited further test work will be required for Williamson due to over
660,000 tonnes of ore having historically been processed through the
Mill 1 circuit. This will assist in narrowing down and minimising the
final PFS test work.
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Mining Engineering and Associated Studies
Considerable work has been undertaken on mining parameters for optimisations and designs for
the key resource areas of the Matilda Gold Project. The initial Matilda Mine Scoping Study formed
the framework to approach contractors and other service providers to develop a new cost structure
for inclusion in the current work programme. Mining engineering work is moving into prefeasibility
with initial designs completed on the main open pit mining centre at Matilda. Since acquiring the
WGP Plant and infrastructure there has been significant interest in the project from contractors,
fleet hire companies, equipment suppliers and service providers which allows the company to
asses all possible options for operating the site to achieve the lowest possible capital and operating
cost structure.
Geotechnical reviews have been ongoing as the team has been obtaining input from past studies
and assessments from consultants that were involved with the initial mining at Matilda and
Williamson. Hydrological work will also leverage off past work with extensive studies completed at
Williamson plus Matilda being previously assessed as part of an application for a ground water
licence. Mining and processing reconciliations for both Matilda and Williamson are being analysed
to ensure all available performance data is taken into account during the prefeasibility study. With
initial designs completed, geotechnical and hydrological assessments can now be undertaken to
ensure engineering confidence is at a prefeasibility level.
Mining Inventory
Of the open pit and underground mining studies completed to date the current Mining Inventory
contains 4.9Mt and 454,000oz Au contained ounces to be processed over 3 years 10 months, or an
average annual production of 1.3Mt and 119,000oz Contained Gold.
Table 1: Matilda Mining Inventory
Production
Average
Annual
Tonnes Milled
t
Yrs 1 to 4
1,300,000
4,987,000
Processed Grade
g/t
2.8
2.8
Processed Ounces
oz
119,000
454,000
Recovery
%
90%
90%
Recovered Ounces
oz
106,000
407,000
The Mining studies to date have focused on Galaxy, Golden Age, Matilda, Williamson and Calvert
deposits. The last 4 of these deposits have been mined previously and processed through the
WGP plant. 49% of the Mining Inventory is at an Inferred Resource level. 72% of the open pit
Mining Inventory is to an Indicated Resource confidence. Blackham notes that over 97% of the
Inferred Resources in the Mineral Inventory are coming from deposits that have previous mining
that gives further confidence as to the grade of these Inferred Resources. Generally there is a low
level of geological confidence associated with Inferred mineral resources and there is no certainty
that further exploration work will result in the determination of Indicated mineral resources or that
the production target itself will be realized.
Resources of a further 37Mt @ 3.3g/t for 3.9Moz (46% of which is Indicated Resource) are sitting
outside the above Mineral Inventory. Blackham is continuing to review its mining and processing
studies with a view to bring further resources into the mine life prior to completion of the Feasibility.
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Cash operating costs (AISC – all in sustaining) are expected to be in the order of A$1,000 to
A$1,100/oz. The mining contractor rates were last confirmed 18 months ago and these rates are
expected to have come off significantly in that period due to cheaper equipment, salary and diesel
costs. Blackham will obtain revised mining contractor quotes prior to completion of the PreFeasibility Study over the project.
Care and Maintenance
The care and maintenance team on site has been implementing a number of improvement programs
and will be instrumental in investigating and facilitating assessments to ensure accuracy of costings
and timelines for refurbishment. The team has significant past experience at operating and
optimising the processing facilities at site and will be integral in ensuring studies can target areas
from experience to improve the operating performance of the plant.
Plant and Infrastructure Refurbishment
Running in parallel to the metallurgy studies is the preparation work for the refurbishment of the free
milling circuit. The initial mothballing of the refractory circuit means there is a significant reduction in
plant to refurbish and maintain which has a material effect in reducing the initial cost structure of the
processing facility. In addition to refurbishment it is currently envisaged a gravity circuit will also be
included in the process to assist in increasing recoveries and further reduce operating costs. There
has been considerable interest from engineering companies and associated entities able to assist
with refurbishment reflecting the excess capacity in the market.
The initial start-up capital to re-commission the Matilda Gold Project is estimated at $24.6 million.
These funds are planned to be spent in the four months following development decision. The
project is cash flow positive within 5 months of development decision. The initial capital of $24.6M
represents the maximum cash deficiency prior to the project being cash flow positive.
The initial capital includes $15.7M for refurbishment of the plant, tailings dam extensions and power
station refurbishment which has been estimated by independent consultants and contractors. The
refurbishment of the plant assumes an EPCM contractor is appointed to manage this process. The
Company has also had initial discussions with power contractors interested in owning the power
station and selling the project power over the fence. Mining and working capital of $8.9 million is
also needed to commission the project.
With the robust economics and quick payback period at current gold prices Blackham is confident
the bulk of the plant and infrastructure refurbishment costs can be financed out of debt.
Approvals
The Department of Environment and Regulation (DER) has transferred the Environmental
Protection Act 1986 licence to Matilda Operations Pty Ltd, a 100% owned subsidiary of Blackham
Resources Limited. The licence primarily allows for the processing of ore, mine dewatering
extraction and discharge plus other activities required for the operation of the site.
The Department of Water (DoW) has transferred all the licences required for extraction of water for
use in processing of ore and dewatering for mining purposes to Matilda Operations Pty Ltd.
With most the approvals for the operation of the Wiluna plant now in place and current notices of
intent to mine over Matilda and Williamson, there are only limited approvals required to commence
operations.
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Financing
Blackham continues to progress its 4.4Moz Matilda Gold Project towards production. Management
are confident the operations can be restarted in late 2015 subject to financing. Blackham continues
to focus on the development of the Matilda Gold Project. Discussions are ongoing with a number of
potential funders that have expressed an interest in financing Matilda Gold Project through
feasibility and into production. Blackham is considering all options with a view to maximising
shareholder value.
For further information on Blackham please contact:
Bryan Dixon
Managing Director
Blackham Resources Ltd
Office: +618 9322 6418
David Tasker/Tony Dawe
Professional Public Relations
Office: +618 9388 0944
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Matilda Gold Project Resource Plan
Table 2. Matilda Gold Project Resource Summary
Measured
Mining Centre
Koz Au
Mt
9
4.7
2.7
0.7
0.2
g/t
Au
2.0
1.7
2.7
3.3
Golden Age
0.2
East Lode
West Lode Calvert
Henry 5 - Woodley Bulletin
Burgundy - Calais
Happy Jack - Creek
Shear
Other Wiluna Deposits
Matilda Mine
Williamson Mine
Regent
Galaxy
Total
Mt
0.1
0.1
g/t
Au
2.4
Indicated
2.4
9
Inferred
Koz Au
Mt
300
150
61
25
8.2
3.6
3.1
0.3
g/t
Au
1.7
1.7
2.1
2.6
8.6
40
0.3
1.0
1.4
5.2
5.5
170
240
2.1
5.9
1.292
Total 100%
Koz Au
Mt
450
200
210
26
13
6.3
3.9
0.6
g/t
Au
1.8
1.7
2.2
2.9
6.8
80
0.5
2.3
2.8
4.7
5.2
340
460
400
0.8
4.6
6.0
250
0.3
1.5
5.9
290
0.99
3.5
17
3.8
Koz Au
M
760
350
270
51
1
6
1
0
7.4
120
0
3.3
4.2
4.8
5.3
510
700
120
2.9
5.6
520
5.7
60
1.61
6.0
310
1.3
4.8
200
2.9
5.4
490
110
1.8
4.0
230
2.8
4.1
340
0
2,036
25
3.0
2,376
42
3.3
4,421
2
Competent Persons Statement
The information contained in the report that relates to Exploration Targets and Exploration Results at the Matilda Gold
Project is based on information compiled or reviewed by Mr Cain Fogarty, who is a full-time employee of the Company. Mr
Fogarty is a Member of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the style
of mineralisation and type of deposit under consideration and to the activity which is being undertaken to qualify as a
Competent Persons as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Mr Fogarty has given consent to the inclusion in the report of the matters based on this
information in the form and context in which it appears.
The information contained in the report that relates to Mineral Resources for the Galaxy, Golden Age and Wiluna deposits
is based on information compiled or reviewed by Mr Marcus Osiejak, who is a full-time employee of the Company. Mr
Osiejak, is a Member of the Australian Institute of Mining and Metallurgy and has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken to qualify
as a Competent Persons as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. Mr Osiejak has given consent to the inclusion in the report of the matters based on
this information in the form and context in which it appears.
With regard to the Matilda Mine, Williamson and Regent Resources, the Company is not aware of any new information
or data, other than that disclosed in this report, that materially affects the information included in this report and that all
material assumptions and parameters underpinning Mineral Resource Estimates as reported in the market
th
announcements dated 20 November 2014 and 23rd of January 2014 continue to apply and have not materially
changed.
Forward Looking Statements
This announcement includes certain statements that may be deemed ‘forward-looking statements’. All statements that
refer to any future production, resources or reserves, exploration results and events or production that Blackham
Resources Ltd (‘Blackham’ or ‘the Company’) expects to occur are forward-looking statements. Although the Company
believes that the expectations in those forward-looking statements are based upon reasonable assumptions, such
statements are not a guarantee of future performance and actual results or developments may differ materially from the
outcomes. This may be due to several factors, including market prices, exploration and exploitation success, and the
continued availability of capital and financing, plus general economic, market or business conditions. Investors are
cautioned that any such statements are not guarantees of future performance, and actual results or performance may
differ materially from those projected in the forward-looking statements. The Company does not assume any obligation to
update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
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