Blackham Resources has received a $14.3 million loan from its key mining contractor MACA, successfully refinancing its loan with Orion Fund JV in the process.
The ASX-listed gold play had until today to refinance its non-amortising term loan with Orion. With a secured loan facility in place with MACA, which will initially have a 10% per annum interest rate, the Orion term loan is now fully repaid.
The company is also undertaking an entitlements issue to raise around $35.9 million with Hartleys Limited appointed as Lead Manager and to act as Underwriter. Underwriting is set to be finalised this week.
Orion, MACA and PYBAR have provided sub-underwriting commitments totalling up to $13 million while Blackham’s Chairman Milan Jerkovic is planning to sub-underwrite up to $500,000.
It also has a $23 million Project Financing Facility that remains in place with Orion, which will reduce to $20.5 million following completion of entitlements issue and which Blackham intends to fully repay in 2018.
“The refinancing of the Orion Term Loan, together with the alignment of key stakeholders, marks a significant milestone which now allows the Company to move forward with the final stage of our recapitalisation strategy,” Blackham’s Chairman Milan Jerkovic said.
This will ensure that Blackham is well funded with a strong balance sheet to enable it to focus initially on a simple free milling mine plan at its Matilda-Wiluna Gold Operation as it transitions to a period of stable gold production, having recently accessed high grade ore zones, delivered record gold production and achieved a step-change in project economics.
“The Company plans to repay the remainder of its Orion facilities and normalise working capital using internally generated cash flows by the end of 2018, targeting a net-cash position by the end of the calendar year, whilst continuing exploration aimed at lengthening and improving the free-milling mine plan.
In addition, Greg Fitzgerald has agreed to join the Board following the successful completion of the Entitlements Issue while Linton Kirk and Jonathan Lea will join a newly formed Technical Advisory Committee.
The committee will work with the board to further de-risk and optimise both the current operations and strong growth opportunities of the 6.5Moz Matilda-Wiluna Gold Operation.
Shares in Blackham are currently suspended from trading.