Blackham returns to the ASX and gets a spanking from investors

Troubled gold miner Blackham Resources is out of a two-and-half month trading halt and investors have pummeled the stock.

The company, which is trying to make a go of the Matilda-Wiluna mine in Western Australia, was down 49 per cent to 5.4c in Tuesday morning trade.

The shares recovered to 7.4c by the end of the day — still down 30 per cent.

It’s a far cry from the heady heights of early 2017 when the shares hit a 52-week high of 83c.

Blackham (ASX:BLK) has returned to the market in order to raise $36 million from shareholders to keep the operation going, backstopped by key creditors and contractors.

A possible deal with a New York financier fell through in December.

Blackham Resources shares over the past six months.

The company began production in late 2016, and has been consistently unable to hit ambitious production targets.

In fiscal 2017 it forecast production of 60,000 to 70,000 oz of gold but heavy rains and low grades meant it achieved 39,413 oz.

In November Stockhead revealed that it was selling gold for hundreds of dollars less than it cost to produce, and the company’s budget was fraught.

In the December quarter although it built larger stockpiles of ore to work with than it had previously collected, production and grades were still lower than in the prior quarter.