Blackham Resources Ltd.: Fully Underwritten $36 Million Entitlements Issue to Underpin a Transformational 2018

Perth - Blackham Resources Ltd. (ASX:BLK) (OTCMKTS:BKHRF) ("Blackham" or "the Company") is pleased to announce that it has today launched a fully underwritten 5 for 2 renounceable entitlements issue to raise approximately $36 million (before costs) ("Entitlements Issue"), which represents the final step in its previously announced recapitalisation strategy.

Highlights

- Fully underwritten 5 for 2 renounceable Entitlements Issue to raise approximately $36 million (before costs)

- Sub-underwriter bookbuild completed by Lead Manager, Hartleys Limited, was heavily oversubscribed, with strong demand from high quality domestic and international institutional and professional investors

- The significant level of demand for sub-underwriting resulted in an agreed reduction in the quantum of sub-underwriting by MACA, Orion and PYBAR from $13 million to $4 million (in aggregate)

- New shares to be issued at $0.04 per share, together with one free attaching listed $0.08 option (expiring 31 January 2019) for every two new shares issued

- Upon completion of the Entitlements Issue Blackham will have a strengthened balance sheet that will underpin a transformational 2018, during which it intends to:

o achieve strong cashflow generation from operations;

o repay the $23 million project financing facility with Orion ($20.5 million after the Entitlements Issue, to be fully repaid by the end of 2018);

o continue exploration drilling targeting an ongoing five-plus year free-milling mine life; and

o end the calendar year in a net cash position

- Fully underwritten entitlements Issue allows Blackham shares to recommence trading on the ASX

Following the Entitlements Issue, Blackham will have a strengthened balance sheet to underpin a transformational 2018, during which it intends to:

o achieve strong cashflow generation from operations;

o repay its $23 million project financing facility with Orion ($20.5 million after Entitlements Issue, to be fully repaid by the end of 2018);

o continue exploration drilling targeting an ongoing five-plus year free-milling mine life; and

o end the calendar year in a net cash position.

Significantly, the Company will maintain a sound cash position once the Entitlements Issue is complete and all relevant payments have been made, with cash expected to remain above $15 million during 2018.

Hartleys Limited ("Hartleys") is Lead Manager and arranger of the underwriting and received strong demand from its domestic and international institutional and professional investor network to participate in subunderwriting the Entitlements Issue.

Blackham's Executive Chairman, Milan Jerkovic, said:

"It is very pleasing to see the level of interest in the Entitlements Issue that was received during the subunderwriting process as well as the high quality of investors that have entered into sub-underwriting agreements. With the Entitlements Issue fully underwritten, we can now move forward with the final stage of our recapitalisation strategy.

Blackham will be well funded with a strong balance sheet to enable us to focus initially on a simple free milling mine plan at the Matilda-Wiluna Gold Operation and enjoy a period of stable gold production having recently accessed high grade ore zones. The Company is at an exciting stage, with 2018 expected to be a transformational year of strong operational performance that is likely to generate significant cash flow and value for Blackham and its shareholders."

Details of the Entitlements Issue

The fully underwritten renounceable pro-rata Entitlements Issue is for up to 897,670,820 new shares on the basis of five new shares for every two existing shares held by eligible shareholders at the record date (5:00pm (WST) on Monday, 29 January 2018), at an issue price of $0.04 per new share, together with one free attaching listed $0.08 option (expiring 31 January 2019) for every two new shares issued, to raise approximately $36 million (before costs). Eligible shareholders are also invited to apply for new shares and new options in excess of their entitlement.

Eligible shareholders are those with a registered address in Australia and New Zealand on the record date.

Entitlements Issue is Fully Underwritten

The Entitlements Issue is fully underwritten. As previously announced on 15 January 2018, each of MACA Limited ("MACA"), Orion Fund JV Limited ("Orion") and PYBAR Mining Services Pty Limited ("PYBAR") provided sub-underwriting pre-commitments of up to $8 million, $2.5 million and $2.5 million respectively. Due to the significant level of sub-underwriting interest from a number of high quality domestic and international institutional and professional investors, there has been an agreed reduction in the amount of sub-underwriting undertaken by MACA, Orion and PYBAR, with their sub-underwriting commitments now being for up to $2 million, $1 million and $1 million respectively, for a total of $4 million.

Each of MACA, Orion and PYBAR had the opportunity to further reduce their sub-underwriting commitments, but each elected to maintain their participation in the entitlements issue at these levels, further demonstrating their ongoing support for Blackham and its Matilda-Wiluna Gold Operation.

To the extent that the number of shortfall shares ultimately allocated to each of MACA, Orion and PYBAR is less than each of their original sub-underwriting pre-commitments, the reduction will be paid out of Entitlements Issue proceeds, such that the amount owed by Blackham to each of MACA, Orion and Pybar will still reduce by $8.0 million, $2.5 million and $2.5 million respectively upon completion of the Entitlements Issue.

As previously announced, Blackham Executive Chairman, Mr Milan Jerkovic has committed to personally subunderwrite up to $500,000 of the Entitlements Issue.

Further details in relation to the Entitlements Issue can be found in the prospectus released by the Company today.

Timetable

The proposed indicative timetable for the Entitlements Issue is shown below:

Event: Prospectus lodged with ASIC and ASX
Entitlements Issue announcement lodged with ASX
Lodgement of Appendix 3B

Date: Post market close on Monday, 22 January 2018

Event: "Ex" date (being the date that shares start trading without the entitlements to participate in the Entitlements Issue)

Date: Thursday, 25 January 2018

Event: Rights trading starts on a deferred settlement basis

Date: Thursday, 25 January 2018

Event: Record Date to determine Entitlements

Date: 5:00pm (WST) on Monday, 29 January 2018

Event: Opening date of Entitlements Issue

Despatch of the prospectus and entitlement and acceptance Form to eligible shareholders

Date: Tuesday, 30 January 2018

Event: Rights trading ends

Date: Monday, 5 February 2018

Event: Shares quoted on a deferred settlement basis

Date: Tuesday, 6 February 2018

Event: Closing date for acceptances under the Entitlements Issue

Date: 5:00pm (WST) on Monday, 12 February 2018

Event: ASX Announcement update on applications received

Date: Tuesday, 13 February 2018

Event: ASX notified of under subscriptions under the Entitlements Issue

Date: Thursday, 15 February 2018

Event: Settlement Date for sub-underwriting

Issue Date of New Shares and deferred settlement trading of New Shares ends

Date: Monday, 19 February 2018

Event: Trading of New Shares expected to commence

Date: Tuesday, 20 February 2018

Event: Holding statements despatched

Date: Tuesday, 20 February 2018

Event: Last day by which the Securities (if any) under the Shortfall Offer may be issued

Date: Friday, 11 May 2018 (being 3 months after the Closing Date)

The above dates are indicative only and subject to change. The Company reserves the right, subject to the Corporations Act and the Listing Rules, to extend these dates without prior notice including extending the last date for receipt of the Entitlement and Acceptance Form, or to delay or withdraw the Entitlement Offer at any time without prior notice.

Corporate Matters

In connection with a Share Purchase Agreement announced on 31 August 2017 between the Company and The Australian Special Opportunity Fund, LP ("Agreement"), the Company has terminated the Agreement in full and final settlement for the 3,250,000 Collateral Shares that were previously issued under the Agreement.

Forward Plan Summary

Following the completion of the Entitlements Issue, Blackham will be well funded as it enters a significantly lower risk period of production, which will initially focus on free milling gold production with an expected stripping ratio of less than half of recent levels (7:1 vs 16.5:1) for the current free milling mine plan, providing a significant step change in project economics. This, in conjunction with continued access to high grade ore zones that are supported by extensive grade control drilling, will provide ongoing mill supply and continued growth in high grade stockpiles and is expected to deliver a period of strong operational cash flows.

Due to available carried forward tax losses, Blackham does not expect to pay income tax during the current free milling mine plan. This cash flow will ensure there is a significant level of exploration drilling going forward, focussed on identifying additional free milling mineralisation as well as increasing the 1.2Moz of gold reserves (currently 15Mt @ 2.5g/t) by converting more of the Company's very large resource base (65Mt @ 3.1g/t for 6.5Moz) to reserves.

Enquiries

The prospectus and associated ASX releases will be made available shortly on the Company's website at http://www.blackhamresources.com.au

Copies of the prospectus and entitlement forms will be mailed to all eligible shareholders in accordance with the timetable set out above. For enquiries in regard to individual shareholdings please contact Link Market Services on 1300 730 659.

This announcement, together with the release of the Entitlements Issue prospectus will lift the suspension in trading of Blackham shares.

To view the release, please visit:
http://abnnewswire.net/lnk/67HL5D4P

To view the Prospectus, please visit:
http://abnnewswire.net/lnk/82A2134E

To view the letter to Shareholders, please visit:
http://abnnewswire.net/lnk/DS63EO20

To view the letter to Option holders, please visit:
http://abnnewswire.net/lnk/SJ1M0FSL

About Blackham Resources Ltd:

Blackham Resources Ltd. (ASX:BLK) (OTCMKTS:BKHRF), is an emerging gold producer focused on its Matilda Gold Project in Western Australia where mining and production is imminent. The Matilda/Wiluna Gold Operation incorporates over 1,000 square kilometres of tenements containing total JORC 2012 resources of 63Mt @ 3.2 g/t for 6.4Moz of gold. These tenements cover around 55 kilometres of strike along the Wiluna Mine Sequence and 10 kilometres of strike along the Coles Find Sequence. The Wiluna Mine and Coles Find Sequence has historically produced 4 million ounces of gold.

All the deposits are within 26 kilometres by existing haul roads of Blackhams recently acquired Gold Plant. With exploration prospects at Mt Poole, Monarch, Carroll Prior, Red Lady, Zenith, Island and Albion in the Lakeway area provides the company with excellent exploration areas for potential future projects.



Contact:

Milan Jerkovic Chairman
Blackham Resources Ltd.
Office: +61-8-9322-6418

Jim Malone Investor Relations Manager
Blackham Resources Ltd.
Office: +61-419-537-714

John Gardner
Media Relations Citadel-MAGNUS
Office: +61-413-355-997