Expansion study to unlock Blackham’s untapped potential
THE INSIDE STORY: Blackham Resources (ASX: BLK) recently claimed the handle of Australia’s newest gold miner, however it is on track to very soon become the country’s newest gold producer.
Blackham Resources has commenced mining operations at the company’s 100 per cent-owned Matilda gold project, located near Wiluna in Western Australia.
The Matilda gold project consists of four very large gold systems, the current largest and best known of which is the historic Wiluna gold mine, to the south is the Matilda and Lake Way systems.
In addition to these is the Quartz reefs that start at the Wiluna mine and extend for 15km to the North West.
Wiluna currently holds a Resource of 3.5 million ounces of gold and has historically produced over four million ounces over the past 100 years.
The total open pit mine plan, incorporating the Matilda, Williamson and Galaxy mines, consists of 5.8 million tonnes at 1.7g/t gold for 324,000 ounces (including stockpiles) of shallow free milling ore to be mined over the first four years.
To supplement the open pit ore, Blackham has commenced underground mining to access the high-grade Golden Age orebody.
The Golden Age initial mine plan consists of 226,000 tonnes at 5.8g/t gold for 38,000 ounces of free milling ore, which Blackham will mine over the first two years.
Golden Age remains open both to the east and up dip and hosts underground Reserves comprising 112,000 tonnes at 6g/t gold for 21,000 ounces.
The Golden Age reef has existing access via the Bulletin decline and has mining infrastructure in place thanks to the project’s previous owners, and good geotechnical conditions, which has allowed easy re-entry to the mine.
The least explored system of the four is Lake Way where Blackham has identified a number of targets and has the potential to hold as much, if not more, than those it has already established within the Wiluna field.
“In July we started mining at our Matilda gold mine and we have also started mining at the Golden Age underground mine,” Blackham Resources managing director Bryan Dixon told The Resources Roadhouse.
“We are currently in the final stages of the refurbishment of the Wiluna gold plant with our initial focus being to produce gold at a rate of 100,000 ounces per annum.”
Blackham’s initial objectives are well grounded, given the company has an eight year mine life across four very large gold systems and a Resource comfortably sitting at over five million ounces of gold at a grade of over three grams per tonne.
All this is complemented by a market cap of around $230 million (approx. $25 per resource ounce), which has been bolstered by a strong share performance over the past 12 months, increasing by over 500 per cent comparing more than favourably against the gold index, which has increased by 140 per cent.
“Once we have completed the refurbishment and recommissioning of the Wiluna plant, we aim to roll straight into expansion work to better utilise the five million ounces we currently have,” Dixon said.
Blackham’s strategy is to eventually ramp up production from the Matilda project to beyond 200,000 ounces per annum.
Having commenced mining at the Matilda mine, the company’s objective for Stage Two of the project will be bringing additional resources into the mine plan.
The 3.5 million ounces at 5.8 grams per tonne gold of Wiluna sulphides will be the focus of an expansion study which Blackham currently has underway.
The current eight year life of mine is rapidly growing with the inclusion of additional sulphides from Wiluna, Blackham is looking to increase capacity to allow a growth in production to around 175,000 to 230,000 ounces.
This appears to be more likely than not to occur as Blackham continues to optimise the operations and the mine plan with further Reserve upgrades to come from four million ounces it currently has sitting outside the mine plan.
Open pit mining at Wiluna ceased in the early 1990s when the focus of the previous owners shifted to mining high-grade underground deposits.
Historical drilling carried out at Wiluna mainly focused on underground mining targets, following mineralisation down plunge with only limited drilling along strike of the known deposits.
Blackham’s plans for expansion at Wiluna received a great deal of encouragement from the completion of extensional drilling programs carried out earlier this year on the Wiluna Shear System targeting extensions at a number of open pits and undergrounds.
The program consisted some 17 RC holes for 4,067m, targeting an expansion of the mineralisation at the Wiluna mine.
The drilling program was designed specifically to test areas within 150m of existing open pits and underground development to clarify the presence of any extensions to mineralisation that could be rapidly converted to resources.
The first round of results came from drilling at of the Essex deposit, returning results including:
WURC0008
5m at 10.8 grams per tonne gold from 134m, including 3m at 16.4g/t gold;
WURC0009
6m at 3.47g/t gold from 104m, including 3m at 16.4g/t gold, 6m at 8.99g/t gold from 119m, including 3m at 16.4g/t gold, 19m at 6.71g/t gold from 128m, including 5m at 19.7g/t gold and 18m at 4.88g/t gold from, 181m including 7m at 8.81g/t gold.
“The positive results from the drilling at Essex provided the boost we required to immediately plan a program of follow up drilling,” Dixon said.
“We are also now looking at a revision of the Resource estimate at Essex.
“The Essex drilling confirmed further high-grade shallow mineralisation along the Wiluna East Lode Fault.”
On the back of the Essex drilling, Blackham completed further drilling at the West Lode, Squib and Happy Jack deposits, which provided further justification for its decision to focus on the Wiluna mine.
Drilling on these deposits returned results of:
WURC0004
5m at 13.7g/t gold from 191m, including 3m at 20.9g/t gold;
WURC0006
8m at 3.44g/t gold from 48m, including 4m at 5.42g/t gold; and
WURC0011
12m at 7.52g/t gold from 147m, including 2m at 38.1g/t gold.
“Our strategy across the entire project remains fairly simple,” Dixon explained.
“That is to chase open pit and shallow underground mineralisation close to existing infrastructure.
“By leveraging off the existing data, we have been able to add significant ounces to the Matilda gold mine plan very cheaply.
“We are already planning up a round of follow up drilling on this latest drilling.
“All results will be incorporated into the ongoing open pit and underground mining studies.
“We are confident we have identified a significant amount of mineralisation that the company considers can be profitably mined in today’s higher gold price environment.”
Blackham also recently announced a maiden Indicated and Inferred Resource estimate for the Moonlight Shear Zone, located less than two kilometres from the Wiluna gold plant
The estimate of 2.6 million tonnes at 4.6g/t gold for 381,000 ounces of gold galvanized the company to commence open pit and underground mining studies on the deposit, which will focus on identifying shallow oxide and transitional resources along strike of the existing open pits where the mineralisation continues along the shear zones.
Blackham are very close to pouring gold and have an aggressive internal growth goal to achieve 200,000 ounces per annum, which if successful would make Blackham transitional Blackham to a mid-tier gold producer.
Blackham Resources Limited (ASX: BLK)
… The Short Story
HEAD OFFICE
Level 2, 38 Richardson St
West Perth WA 6005
Ph: +61 8 9322 6418
Email: info@blackhamresources.com.au
Web: www.blackhamresources.com.au
DIRECTORS
Milan Jerkovic, Bryan Dixon, Alan Thom, Greg Miles, Peter Rozenauers,
MAJOR SHAREHOLDERS
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HSBC Nominees 10.5%
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