New Funding Package
New Funding Package
Perth, Nov 24, 2017 AEST (ABN Newswire) - Blackham Resources Ltd ("Blackham" or "the Company") (ASX:BLK) (OTCMKTS:BKHRF) has taken a major step towards completing the re-financing of the Matilda-Wiluna Operation with an agreed initial $60 million Funding Package with Pacific Road Capital (Pacific Road). Blackham welcomes Pacific Road as a new cornerstone shareholder and substantial financial contributor to the 6.5Moz Matilda-Wiluna Gold Operation.

- A$60 million Pacific Road Funding Package includes:

o A$7.35 million Private Placement;

o A$2.65 million sub-underwriting of a planned A$12.3 million Entitlement Offer to existing shareholders;

o A$50 million Loan Facilities; and

o Potential for further debt funding of the Wiluna Plant Expansion to lift capacity to 3.3Mtpa (Expansion Funding).

- The funding agreement is at executed term sheet stage, with formal legal documentation well advanced and expected to execute within one week.

- This follows an extensive technical due diligence process by Pacific Road.

- Blackham will offer shareholders an opportunity to participate at the same share price as Pacific Road through a renounceable entitlement offer, of two (2) shares per seven (7) shares held, to potentially raise a further $12.3 million (Entitlement Offer).

The Pacific Road Funding Package and Entitlement Offer will be used to re-finance the current debt facility, strengthen and lengthen reserves, complete expansion studies and provide additional working capital to the Company. The new Loan Facilities have the first repayment date in June 2020 which means the Company's short term working capital position will be improved significantly.

The Company will also launch a renounceable rights issue to raise approximately $12.3 million (before costs) at an issue price of 12 cents per New Share with Eligible Shareholders having an entitlement to subscribe for two (2) New Shares for every seven (7) Shares held. Pacific Road has offered to sub-underwrite up to $2.65 million of the Entitlement Offer.

The Pacific Road Funding Package also includes a A$7.35 million equity private placement (the "Private Placement"), plus the sub-underwriting for $2.65 million, and loan facilities totalling A$50 million. The Pacific Road investment committee approved term sheet remains subject to documentation and third party consents to the grant of security. Technical due diligence has been completed and the legal documentation is currently being finalised with drawdown expected over the next two weeks.

The Wiluna-Matilda Gold Operation (Operation) is located in Australia's largest gold belt which stretches from Norseman through Kalgoorlie to Wiluna. The Operation now includes resources of 65Mt @ 3.1g/t for 6.5Moz Au all within 20kms of Blackham's 100% owned 1.8Mtpa plant, gas power station, borefields and accommodation village. Blackham has consolidated almost the entire Wiluna Goldfield within a +1,100km2 tenement package which has historically produced more than 4.3 million ounces.

The Company is focused on enhancing production and improving cash flow from current operations through accessing the higher grade ore from the open pit and underground mines. Over the last 12 months Blackham has significantly de-risked both the open pit and underground operations. The significant mine development in the Golden Age underground was completed in early July 2017 and the underground operation is now cash flow positive. Major investment has been made in mining development at both the Galaxy and M4 pit by gaining access to the best ore sources in both pits. The Galaxy mine development is at a point where high grade ore is now accessible. Mine development in the M4 pit is continuing and is expected to be largely completed in Dec' 2017. High grade ore from the main M4 lode will then be accessible over 1.5 kilometres of strike to fill the mill.

On 30 August 2017, the Company was pleased to announce the successful results of the Wiluna Expansion Preliminary Feasibility Study ('Expansion PFS'). The PFS demonstrated robust economics and improved economies of scale supporting the expansion of the Matilda-Wiluna Operation to 3.3Mtpa.

Historically, over the last 20 years, the Operation has relied predominately on an underground feed with a very short reserve life. The Expansion PFS increased reserves to 1.2Moz (15Mt @ 2.5g/t) - an increase of 116% in one year. Blackham's comparative advantage to previous operators is the 15Mt @ 2.3g/t Au (85% at Reserve classification) in open pit feed, which is included in the Expansion PFS Mine Plan. Blackham has been successful in identifying, consolidating and defining orebodies close to the Wiluna Gold Plant.

The Board-approved Expansion DFS is well advanced and is aimed at monetising a larger portion of its 6.5Moz Matilda-Wiluna Gold Resources. The management team have allowed additional time to complete the Expansion DFS due to significant drilling success growing the size of the resources and to allow further work to optimise and de-risked the Expansion opportunity. The Board is focused on achieving steady production and cash generation from existing operations prior to committing to development of the expanded Operation.

About Pacific Road Capital

Pacific Road is a dedicated mining private equity specialist, managing two funds with over US$800 million of total committed capital. Pacific Road is headquartered in Sydney, NSW.

A$10 Million Equity

Pacific Road has agreed to purchase Blackham shares ("Shares") through a private placement for gross proceeds of A$7.35 million priced at 12 cents per share. Following the completion of the Private Placement, Pacific Road, will own approximately 14.6% of the Company's Shares prior to the Entitlements Offer.

Pacific Road have offered to partially sub-underwrite the Entitlements Offer for $2.65 million. Depending on the take up of the Entitlements Offer, Pacific Road will own between 11.7% and 18.8% of the Company's Shares post the Entitlements Offer.

A$50 Million Loan Facility

The Company is in the process of finalising both the finance documentation and the third-party agreements to effect security. The Company expects to draw down on the $40 million Senior Loan over the next two weeks. A further Standby Facility of $10 million is also available to be drawn until 30 June 2018 at the Company's election. A summary of loan terms is included in Appendix A (see link below).

Expansion Funding

In addition, Pacific Road have provided the Company with an Indicative Term Sheet for an additional Expansion Loan to be used to fund the expansion of the Wiluna processing facility and infrastructure to 3.3Mtpa. The Expansion Funding remains conditional on legal documentation and Pacific Road's satisfaction with the successful completion of the Expansion DFS and agreed covenants.

2 for 7 Renounceable Entitlements Offer

In addition to the investment by Pacific Road, Blackham is pleased to announce it is offering shareholders the opportunity to invest in shares on the same financial terms as Pacific Road. The Company is announcing an Entitlement Offer of fully paid ordinary shares in the capital of the Company (New Shares) on the basis of two (2) New Shares for every seven (7) existing shares held at the record date of 1 December 2017 (Record Date).

Shares under the Entitlement Offer will be offered at 12 cents per New Share being the Private Placement price. The maximum number of New Shares which will be issued under the Entitlement Offer is 102,590,951 for gross proceeds of approximately $12,310,914 based upon the capital structure prior to the Private Placement with Pacific Road. New Shares issued under the Entitlement Offer will rank equally with existing shares on issue and the Company will apply for official quotation of the New Shares.

The Entitlement Offer will be partially sub-underwritten by Pacific Road (Sub-underwriter) for up to $2.65 million (up to 22,083,333 New Shares).

The Entitlement Offer represents a 14% discount to the last closing price and a 23% discount to the 15-day volume weight average price of your Company's shares.

The current Board and Pacific Road have committed to both strengthening composition of the Board and implementing a Technical Committee to further de-risk and optimise both the current operations and strong growth opportunity of the 6.5Moz Operation. Pacific Road will consult with Blackham over the appointing of up to two further directors to the Board.

To view tables and Appendix, please visit:

About Blackham Resources Ltd

Blackham Resources ASX:BLKBlackham Resources Limited (ASX:BLK) (OTCMKTS:BKHRF) Wiluna-Matilda Gold Operation is located in Australia's largest gold belt which stretches from Norseman through Kalgoorlie to Wiluna. The Operation now includes resources of 96Mt @ 2.2g/t for 6.7Moz Au all within 20kms of the central processing facility. Blackham has consolidated the entire Wiluna Goldfield within a +1,100km2 tenement package which has historically produced in excess of 4.4 million ounces over a 120-year mining history.



Bryan Dixon
Managing Director
Blackham Resources Limited
Office: +61-8-9322-6418

Jim Malone
Investor Relations Manager
Blackham Resources Limited
Office: +61-419-537-714

John Gardner
Media Enquiries
Citadel Magnus
Office: +61-8-6160-4901

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