Blackham Resources (ASX:BLK) is developing the Matilda Gold Project which is located in Wiluna, Western Australia. Since consolidating the project in 2014, Blackham has significantly advanced the project's development as production (100,000oz Au pa) is due to commence by mid-2016. There is significant infrastructure at the site, including a 1.3Mtpa processing facility, a gas power station, a 350 person camp and administration offices. This has significantly reduced the initial capital costs to $25m. The project is financed to production as Blackham secured a $38.5m Funding Package. Analyst Comment: Since consolidating the Wiluna Goldfields less than 18 months ago, Blackham has quickly developed the Matilda Project to be on the verge of becoming a ~100,000oz per annum gold producer by mid-2016. This would see Blackham with few peers given the on-going consolidation of the Australian gold industry. We initiated coverage on Blackham with a valuation of $0.40 / share. We have been conservative with a number of our key assumptions (Mine Life, UG Grade and Operating Costs) which we will review post the release of the PFS (October 2015).

Patrick Poke

Looks very interesting Adam, I just had the briefest of looks at their most recent drilling results and they looks quite encouraging. It's too early in the development for me if they haven't finished their PFS yet, but their resource looks nice - 2.3MOz of gold at a reasonable grade is not something that comes along every day in WA. I couldn't immediately spot whether the resource was JORC compliant though?

Adam Kiley

Hi Patrick, The resource is JORC complainant and it is actually a bit larger at 4.7Moz (of which 1.2Moz is free milling ore). I would expect this to grow further with the recent drill results as well as an initial reserve statement in the coming month. Regarding the PFS, it is due next month and the DFS by the end of the year (first production mid next year). The time line is much shorter than usual as most of the infrastructure is already in place which has also significantly reduced the Capex ($25m). Hope this helps. The full report including a more detailed analysis (valuation, risk & upside), site trip to the operation and management interviews is below.