Blackham Resources (ASX Code: BLK) has grown the combined Resource for the Matilda Gold Project to 18.2 million tonnes at 1.8 grams per tonne (g/t) for 1.1 million ounces of gold, marking a 79% increase over the previous Resource.
The company contracted independent geological consultant Runge Limited to carry out a review and estimate of the Resource for the Matilda Mining Centre gold deposits near Wiluna.
Bryan Dixon, managing director, commented: "This resource upgrade to greater than 1 million ounces is significant as it gives Blackham a critical mass to reconsider putting a plant back at the Matilda Mine site."
The upgrade includes the M4 deposit, which contains 1.9 million tonnes at 2g/t for 119,000 ounces of gold, and revision of the M10 deposit, which contains 578,000 tonnes at 2.1g/t for 39,500 ounces of gold.
Ninety eight per cent of both the M4 and M10 resources are within 120 metres of surface, and the resource is open along strike and at depth where limited drilling exists in both directions.
Blackham has now begun mining studies for both the M4 and M10 deposits.
The open pit mining design work for the M4 pit indicates a significant portion of the M4 deposit is likely to be economic.
The initial M4 pit optimisation confirms the potential of the M3 and M4 pits too merge. The M3 and M4 deposits run parallel to each other and are about 100 metres apart.
Significant stripping ratio benefits are expected to be derived if these pit designs merge.
The Resources for the M3 and M1 pits are currently in the process of being estimated. Previous owners have mined 1.48 million tonnes at 2.54g/t for 121,067 ounces of gold at M1 and 314,000 tonnes at 2.08g/t for 20,976 ounces of gold at M3.
The M1 and M3 Resource estimates are expected in the coming weeks.
Blackham's exploration and development programs are targeting previously defined deposits which are most likely to be converted to Reserves in the near term.
Matilda Gold Project 1.1Moz breakdown
The Matilda project hosts 1.1 million ounces, which is broken down across four areas. The Matilda Mine has a combined resource of 7.4 million tonnes at 1.5g/t gold for 359,000 ounces, which has a higher confidence Indicated Resource of 1.7 million tonnes at 1.8g/t gold.
The additional resources are at Williamson Mine (364,000 ounces), Regent (270,000 ounces) and Galaxy (77,000 ounces).
Blackham has defined an exploration target of 0.5 to 2 million ounces of gold at between 2 and 6g/t for the Williamson Mine.
The three main mining centres are all located within 10 kilometres of the historic Matilda Mine plant footprint and 26 kilometres of the Wiluna Gold Plant.
Options for Blackham at Matilda
With the 79% increase in Resources at Matilda to 1.1 million ounces Blackham now has two paths to consider for the processing of ore from the project.
Having reached a critical mass, Blackham can now consider building its own processing plant on the Matilda site.
It also has the option to process the Matilda ore through the nearby Wiluna Gold Plant via an ore processing agreement.
Dixon recently told Proactive Investors Blackham has the ability to toll treat and earn some income to put back into the greater exploration upside.
"Recently we released an exploration target over Williamson of between half a million and 2 million ounces.
"It would be good to process some of the ore from the old Matilda Mining Centre to fund the exploration at Williamson."
Importantly, Blackham has 100,000 tonnes of low grade stockpiles at Williamson that can be processed quickly under an ore agreement to generate revenue to fund exploration.
Hitting the 1 million ounces of gold resource at Matilda is a milestone for Blackham. It also hoists it in even more into the undervalued category based on an EV/Ounce relative to its peers.
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