Debt crisis goes critical as desperate Blackham loses $50m funding package
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Blackham Resource’s crucial debt deal is off and the company is back to square one in trying to find enough cash to cover an increasingly urgent debt repayment.
All money paid into a $12.3 million entitlement issue will be returned.
A $50 million loan package from Pacific Road Capital “will no longer be proceeding as described”, the company (ASX:BLK) said.
The gold miner has to pay Orion Mine Finance $14.8 million by the end of this month. It’s just one tranche of a $36.7 million loan.
“The company and its advisors are currently in discussions over replacement financing transactions,” it said.
Blackham’s CEO Byran Dixon, through a spokesman, has repeatedly declined to speak to Stockhead.
Stockhead is seeking comment from Pacific Road Capital.
Investors fear that once it comes out of a trading suspension on December 27 Blackham will go straight into voluntary administration.
A resources advisor, who wishes to remain anonymous, is doubtful whether the company, worth $287 million in February when it was starting production, is worth $40 million today.
“It’s easier to promote a mine than it is to produce,” he said.
Before going into a trading suspension last week it was worth $49 million, with shares closing at 10.5c.
The company’s travails are a steep fall from grace.
In August 2016 it was flying high, issuing shares at prices as high as $1 and promising gold production from the Wiluna gold project of 200,000 ounces a year.
Blackham raised a whopping $80.25 million between March 2016 and February 2017, on the back of that promoted potential.
But where it forecast production of 60,000 to 70,000 ounces of gold in fiscal 2017, heavy rains and low grades meant it achieved only 39,413 ounces.
Further, the company has been selling gold at $400 to $700 lower than what it costs to produce.
The company is still advertising for mine staff on Seek, and according to LinkedIn has over 60 employees and contractors.
By the end of September it had $7 million in cash, receipts of $24 million, and planned outgoings of $44 million of which only $2 million was for staff costs.