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The Wiluna gold plant.
The Wiluna gold plant.

UPDATE 1.15pm: Joe Gutnick's Blackham Resources has confirmed it will pick up the former Apex Minerals' strife-prone Wiluna gold project for just $2 million upfront and $2.6 million in deferred payments subject to production milestones.

Blackham said the acquisition would complement its nearby Matilda gold project.

News of the deal sent Blackham shares up more than 40 per cent as investors weighed the relatively low cost price versus the value of plant and infrastructure close to the company's existing flagship project.

Mr Gutnick, Blackham's chairman, said the acquisition of the Wiluna plant and infrastructure was a major step towards bringing the Matilda gold project into production.

"The acquisition of the plant saves Blackham millions of dollars in development costs for the Matilda gold project and will slash years off our development timetable, both of which should be a significant win to Blackham's shareholder returns going forward," he said.

The combined resource of the two projects is 40 million tonnes at 3.3 grams per tonne gold for 4.3 million ounces.

Blackham said drilling would continue across both projects ahead of a feasibility study.

Blackham managing director Bryan Dixon said it was not often that a company got the opportunity to buy a plant and related infrastructure in the middle of its existing gold project.

"This significantly reduces the risk of re-commissioning the Matilda gold project," he said.

Blackham will pay Apex's receivers a deposit of $200,000, $1.8 million on completion of the deal, $1.3 million in cash or scrip once production from the Wiluna tenements reaches 50,000 ounces and a further $1.3 million when production reaches 100,000 ounces.

Apex called in administrators in June last year after a tumbling gold price, high cash costs and low grades at Wiluna forced its operations to the wall.

Blackham shares closed up 7.5 cents, or 44.12 per cent, at 24.5 cents.