Blackham Resources Ltd. intends to raise A$25.8 million to increase annual production at its Matilda-Wiluna gold operation in Western Australia to between 100,000 ounces and 120,000 ounces as part of its strategy to achieve annual production of 250,000 ounces.
The company is also in initial discussions with strategic investors for additional financing and business combinations, it said March 20.
To raise the A$25.8 million, the company will conduct a fully underwritten pro rata renounceable rights issue of 5 new shares for every 4 shares held at 1.5 Australian cents apiece.
It will use the funds for production expansion and cost-reduction initiatives for the current free milling operations, completing the expansion definitive feasibility study for the Matilda-Wiluna operation during the September quarter, and for material drilling targeting high-grade underground reserve expansion.
Earlier in March, Blackham hedged an additional 20,000 ounces of gold at a forward price of A$1,836/oz to take advantage of the strong Australian dollar gold price and expand its gold price protection at near record prices.