MENU

Why the Blackham Resources Ltd share price rocketed 30% higher today

One of the best performers on the market this morning has been the Blackham Resources Ltd (ASX: BLK) share price.

At the time of writing its shares are up a massive 30% to 6.9 cents.

What happened?

This morning the gold miner released an operational update on its production at its Matilda-Wiluna Gold operation during the month of February.

According to the release, Blackham achieved record monthly gold production of 6,713 ounces during February. This topped the previous record production it posted in January of 6,498 ounces.

The driver of this was access to high grade zones in its M4 and Galaxy pits which the miner achieved during the December quarter. This also allowed for lower strip ratios and ultimately a record low all-in sustaining cost (AISC) of A$912 per ounce in February.

As a comparison, during the month the average realised gold price was A$1,670 per ounce, meaning the miner is enjoying extremely high margins.

This is no doubt a big positive for shareholders. In November Blackham was operating with an AISC of A$2,247 per ounce, meaning it was effectively losing money every time it pulled gold out of the ground.

As a result of this strong start to the year, management has forecast a second-half AISC of between A$1,100 and A$1,200 per ounce.

Should you invest?

Whilst I am bearish on the gold price in the long-term due to the prospect of rising rates in the United States, if Blackham can achieve its AISC guidance then I have little doubt it will remain profitable even if the gold price weakens.

Considering its share price has been thoroughly beaten down over the last 12 months amid concerns over its rising costs, this could make it worth taking a closer look at ahead of larger rivals Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) which I think are potentially overvalued.

Alternatively, these top mid cap shares could provide even greater returns than Blackham if you ask me.

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Cochlear or REA Group.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!