Name of the Project
Matilda gold project.

Location
The project is located in Australia’s largest gold belt, which stretches from Norseman through Kalgoorlie to Wiluna.

Client
Blackham Resources.

Project Description
A definitive feasibility study (DFS) has confirmed the project’s robust economics, including a low capital requirement, short timeframe to production, fast payback, and operating costs that are in line with its Western Australian peers.

The DFS process has added two-and-half years to the mine life from the prefeasibility study (PFS), resulting in a significant improvement in project economics.

The DFS envisages mining at Matilda being undertaken by mining contractors, with management and technical services undertaken by Blackham personnel.

DFS mine designs have been completed on the main mining centres at Matilda, Galaxy, Williamson and Wiluna.

Openpit mining is planned for Matilda, Williamson and Galaxy, and they will all use a standard truck-and-excavator mining technique involving conventional drill, blast, load and haul. Ore will be hauled by road train to Blackham’s Wiluna gold plant on existing haul roads. In addition to the mining fleet, an ancillary plant comprising tracked bulldozers, wheel loaders, graders and water carts will be required. The ancillary fleet will prepare drill-and-blast areas, maintain active digging areas, mine roads and waste dumps. Ore will be delivered to the run-of-mine (RoM) pad at the plant site by trucks and then fed to the treatment plant using an RoM loader.

The underground operations at Wiluna have been divided into three distinct areas. The Golden Age and Bulletin undergrounds will be accessed from the existing Bulletin portal and current Golden Age decline. The East West underground will also be accessed from existing underground infrastructure and there is portal access from East pit. Ore from the underground mines will be predominately extracted using top-down mechanised longhole open stoping and a bottom-up modified Avoca method using unconsolidated backfill. Suitable pillars will remain to ensure ground stability during mining. Ore is trucked to the surface and then hauled to the treatment plant. The majority of the underground ore is in the top 600 m and has a relatively short haul to surface.

The Wiluna gold plant has operated under several incarnations in the past three decades, including as a carbon-in-pulp (CIP), carbon-in-leach (CIL) and, more recently, a BIOX CIL, enabling it to process refractory, sulphide ore using a smaller oxide (free milling) circuit. Blackham plans to optimise existing plant components and upgrade the free milling oxide CIP plant to process current resources.

The testwork and optimisation results showed the overall metallurgical performance achievable from Matilda will be 93% gold recovery, 95% from Williamson, 90% from Golden Age and 94% from Galaxy, for a weighted average of 93%.

The testwork indicated that overall recovery would be improved in most ores by adding a gravity circuit. It also showed that leach times might be reduced through intensive oxygenation, which will result in reduced reagent and stripping costs through higher carbon loadings.

Jobs to be Created
About 120 staff are currently employed by mining contractor MACA, with Blackham also providing employment opportunities at the Wiluna mine for underground mining, refurbishment and eventual operation of the processing plant, and for construction and management of the 350-bed accommodation village.

Net Present Value/Internal Rate of Return
The project has a pretax net present value (NPV), at a 7% discount rate, of A$121-million and an internal rate of return (IRR) of 102%, at a gold price of A$1 500, with a payback of 14 months.

At a gold price of A$1 600, the project has a pretax NPV, at a 7% discount rate, of $170 and an IRR of 150%, with a payback of 12 months.

At a gold price of A$1 700, the project has a pretax NPV, at a 7% discount rate, of $219 and an internal rate of return of 211%, with a payback of nine months.

Value
The October 2015 PFS estimated that the project would require a capital investment of $28-million to deliver an average of 98 000 oz/y over a mine life of nearly five years. However, the DFS estimates that the project will require about $32-million to develop and could deliver yearly production of 101 000 oz/y over the first five years of a seven-year mine life, with the life-of-mine production estimated at 668 000 oz.

Duration
Blackham is targeting production by the third quarter of 2016.

Latest Developments
Blackham Resources is considering doubling the processing capacity at its Matilda/Wiluna gold project on the back of an increase in the operation's mineral resource.

The resource at Matilda/Wiluna has increased to 6.4-million ounces, with about 3.1-million ounces classified as measured and indicated, the company has reported.

As a result of the 25% increase in resources since the last quarter, Blackham is advancing its mining and processing studies to increase the processing capacity at the mine to more efficiently develop the large resource base.

In addition to the recently refurbished 1.7-million-tonne-a-year oxide circuit, Blackham is weighing the addition of a 1.5-million crushing, grinding and flotation circuit to feed the existing bacterial oxidation plant.

This will result in total capacity reaching about 3.2-million tonnes a year across the oxide and sulphide circuits, which will all be located at the Wiluna processing hub.

Blackham has told shareholders that the expanded Wiluna plant will bring significant economies of scale to the combined project, with all the resources being within a 20 km radius of the processing plant.

“The latest Wiluna resource upgrade is likely to add significant baseload openpit and high-grade underground feed for the Wiluna expansion study,” Blackham MD Bryan Dixon has said.

“Mining studies are aimed at feeding half of the planned 1.5-million tonnes a year of additional throughput from openpits and half from the underground. These resource upgrades over the last five weeks give us confidence that we can expand the combined operation of three-million tonnes a year, at 3 g/t gold with a long mine life.”

The Wiluna operation produced 9 240 oz of gold during its first quarter of production, after achieving its first gold pour in October last year.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Blackham Resources, tel +61 8 9322 6418, fax +61 8 9322 6398 or email info@blackhamresources.com.au.