Blackham Resources (ASX: BLK) has successfully secured a $13.32 million funding package, which includes a placement at a 37% premium, with a private company controlled by leading mining industry entrepreneur Joseph Gutnick.
The funding package is with Great Central Gold and covers Blackham's wholly owned Matilda Project, which hosts 1.5 million gold ounces in a major Western Australian goldfield.
Gutnick has been a director of numerous mining companies, including Great Central Mines which he built into one of Australia's most successful gold mining companies.
Under his stewardship, Great Central Mines discovered the Plutonic Gold Mine and explored, developed and operated the Bronzewing and Jundee Gold Mines - three world-class gold mines that continue to operate today.
Great Central Mines produced over 780,000 ounces of gold per annum at its peak, and also previously owned the Rosemont, Wiluna, and Matilda Gold Projects
As part of the funding deal with Blackham, Gutnick will be appointed chairman.
Blackham has agreed to a private placement to Great Central of 15.79 million shares at $0.21 per share to raise $3.32 million, which will give Great Central a 19.8% interest in Blackham.
The placement price represents a 37% premium to the five day volume weighted average price of Blackham shares based on the closing price on Friday 1 February 2013.
Additionally, Great Central has agreed to subscribe for $10 million in convertible notes in Blackham.
Bryan Dixon, managing director of Blackham Resources, commented: "Mr Gutnick's agreement to be chairman of the company and to personally provide a large funding package at a significant premium is an important validation of the quality of the Matilda Gold Project and recognition of the success we have had in advancing the project over the past year.
"In addition, Mr Gutnick's extensive knowledge and experience will be a valuable addition to the Board.
"Securing this funding, in a difficult market for emerging gold companies will enable management to continue adding value at Matilda for the benefit of shareholders.
"The company plans to immediately commence a 30,000 metre drilling program targeting the Williamson and Matilda Mine areas."
Gutnick said: "I am delighted to be able to make this strategic investment in a high quality project backed by a strong management team.
"I have waited many years for the right opportunity re-enter the East Murchison and Yandal Belts. I look forward to exploring and developing world-class gold mines in a province where I have enjoyed much success."
The placement will be completed in two tranches, with the first tranche of 12.2 million shares issued under Blackham's existing 25% capacity.
The second tranche, of 3.575 million shares, will be completed following the receipt of necessary regulatory and shareholder approvals.
The convertible note conversion price is at 63% premium to the five day volume weighted average price.
The notes have a maturity date five years from the date of issue and have an interest rate of 8%, paid half yearly.
Casimir Capital LP acted as lead manager and placement agent for both the placement and convertible note.
Matilda's key successes
The Matilda Gold Project has progressed rapidly over the 14 months since acquisition, with key developments including:
- An increased gold resource from 310,000 ounces to 1.5 million gold ounces;
- Identifying a very large exploration target at Williamson;
- Confirming the Matilda and Williamson metallurgy as free milling; and
- Completing an initial Scoping Study at the Matilda Mine confirming robust economics.
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