Perpetual battler Blackham Resources (ASX:BLK) has been trying to right the ship for years.

In 2016, Blackham celebrated first gold pour at the 6.7moz Matilda-Wiluna Gold operation in the Northern Goldfields of WA.

The aim was to ramp up to its Stage 1 production target of 100,000 ounces a year.

But since then, the oxide/free milling operations have been plagued by low gold grades, low throughput, high all in sustaining costs (AISC) and a pesky debt pile that just wouldn’t go away.

Blackham has worked exceptionally hard just to stay afloat.

In FY19, Blackham produced 65,406oz at an AISC of $1760/oz, which gives it some wriggle room at current +$2000/oz gold prices.

But the June quarter was a shocker – 12,045oz at an AISC of $2376/oz.

The market responded badly in morning trade, with the stock falling 16.7 per cent to 1c per share; a far cry from the late 2016 peak of 75c per share.


The company says it is also fielding a variety of funding and corporate transactions from unnamed parties, including a potential takeover.

While production guidance for FY20 isn’t available yet, fortunes are primed for a reversal during the September quarter, Blackham says.

And that debt pile is slowly evaporating.

The “face value” of debt decreased from $21.2m in the March quarter to $13.4m currently.

Blackham is keen to repay remaining debt facilities and transition to a low capex, low risk 100,000oz-120,000oz a year sulphide mining and tailings retreatment operation at Wiluna.

These underground sulphide resources are extensive, but more difficult to treat. Blackham wants to push the button on Stage 1 development in the December quarter.

To further de-risk this transition Blackham has sold its adjacent, non-core Lake Way tenements to Salt Lake Potash (ASX:SO4) for a handy $10m.

Salt Lake will also contribute up to $10 million to the pre-strip of the 321,000oz Williamson open pit mine.

Why? Because the waste material can be used to construct its on-lake evaporation ponds.

That’s symbiosis right there.