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Blackham Resources Rated Speculative Buy By Broker

Blackham Resources (ASX: BLK) has received a speculative buy from Paradigm Securities, the following is an extract from the report.

Blackham has funding to proceed with Matilda Project

Investment Perspective:

Blackham Resources (ASX: BLK) is an emerging gold Company poised to develop its 1.5 Moz Matilda Project at Wiluna and offering further upside from continuing exploration.

The $13m funding package received from cornerstone investor, Great Central Gold Pty Ltd (19.5% of BLK) provides the security in a difficult market to continue exploration and move through to the development stage.

The Matilda Project has a low capex requirement and is in proven terrain with established infrastructure. The initial >50,000 oz/yr Matilda operation is expected to generate significant cash flows and provide a focus for near-mine regional exploration.

Strong margins are indicated even with the gold price currently below US$1400/oz and with a broad consensus that the gold price will drift higher in the medium term.

The Company tenements cover three main mining centres within 10km of the Matilda mine with an exploration footprint of 600km2 in the Wiluna greenstone belt.

There are numerous gold intersections showing high grades close to the planned initial operation, boding well for an extended mine life including underground potential.

The current drilling is producing significant intercepts from the base of the existing resource model, including 35m @ 5.05 g/t from 114m providing strong indicators for resource extensions and raising the confidence level for the resource.

An investment in Blackham provides access to a 1.5 Moz gold inventory in a developed gold region with substantial upside in a lightly explored goldfield.

We believe Blackham has been significantly undervalued by the market-the EV/resource of $8 /oz confirms its strong position relative to its peers.

BLK is a strong development opportunity offering potentially low capex access to near term gold production, access to existing infrastructure, strong exploration upside and focussed management.

We recommend the Company as a SPECULATIVE BUY.

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