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
The expanded Matilda gold project includes Joint Ore Reserves Committee-compliant measured, indicated and inferred resources of 48-million tons at 3.3 g/t for 5.1-million ounces within an 860 km² exploration tenement package. It has historically produced more than 4.3-million ounces.

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 has increased its combined Matilda/Wiluna mineral resource from 5.1-million ounces to 6-million ounces, confirming the need for an expanded Wiluna plant.

The expanded resource of 58-million tonnes, grading 3.2 g/t gold, includes an openpit resource of 33-million tonnes and an underground resource of 25-million tonnes.

The openpit resource includes a maiden East–West openpit resource of 8.6-million tonnes, grading at 2.5 g/t for 700 000 oz of gold.

The updated mineral resource estimate follows successful drilling campaigns.

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

“Very few gold operations in first-class jurisdictions have the scale to be 200 000 oz/y operations. Projects of this size generally sit in billion- or multibillion-dollar producers.”

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.