Latest Canaccord Report - $0.95 target

Resource increases to 6Moz

Canaccord Genuity (Australia) Limited has received a fee as the Lead Manager and
Sole Bookrunner to the Blackham Resources Limited Placement of ~25 million
shares at A$1.00 per share to raise ~A$25 million in August 2016.

BLK has grown the Wiluna/Matilda resource base to 6Moz (previously 5.1Moz), and
is beginning to paint a clearer picture of the production growth potential beyond the
current ~100kozpa free-milling gold operation. An Expansion Study, investigating how
to best utlise the existing BIOX circuit and considerable sulphide resource base is
underway, and we expect the latest open pit resources to form an important part the
proposed production profile. BLK has previously highlighted the potential for the Wiluna
sulphides to add an additional 75-130kozpa of production, which could see overall
production push towards ~200kozpa in the medium term.

We maintain our SPEC BUY recommendation, with nameplate production, resource/reserve updates and Expansion
Study outcomes all meaningful catalysts for the 1H 2017.

Open pit resources the bulk of the upgrade. The maiden East/West open pit resource
of 8.6Mt at 2.5g/t for 700koz accounted for most of the additional resource base.
Mineralisation has been re-modelled above a 0.3g/t lower-cut, and reported within an
A$1,800/oz optimised pit shell, with 59% reporting to the Indicated resource category.
Further potential upside to the East/West resource includes, possible linking of the East/
West pit and North pit, and mineralisation has also been identified between the East
and West lodes. Further open pit resource upgrades are likely in early 2017, which will
incorporate recently completed drilling at the Happy Jack, Bulletin, Creek Shear and
Moonlight deposits. We expect the new open pit resources to serve as base load ore feed
for the Wiluna sulphide Expansion Study.

High grade underground wins also important. The Golden Age resource (free milling
underground), which is currently being mined grew by 21% to 1.4Mt at 4.3g/t for 191koz
(previously 158koz). Golden Age provides an important grade sweetener to the current
production blend over the next 3 years, and conversion of the additional resource
to reserve will be an important catalyst. Additional underground sulphide resources
that increased as part of the overall update included Bulletin (now 2.8Mt at 4.3g/t for
392koz) and Essex (now 666kt at 4.5g/t for 97koz) and these will be worked into the
Expansion Study.

Gold production ramping up, hedging closed out. BLK provided a snapshot of gold
production from its last gold pour (done weekly), where ~2koz was recovered. FY17
production guidance of 65-75koz, points to a strong 2H, especially when considering
that we forecast DecQ'16 (1st production Q) of 9.6koz. BLK also recently closed out
41.2koz of its hedging profile at an average price of A$1762/oz, realising A$6.3m in
cash. The company now only has 12.8koz forward sold at A$1701/oz, and is largely
exposed to the prevailing spot gold price. We expect BLK to finish the DecQ'16 with ~A
$20m in cash, with debt repayments not scheduled until the end of the March 2017.

Valuation. Our A$0.95/sh price target (unchanged) is based on a NPV5% for the Matilda
gold project net of corporate and other adjustments.

http://blackhamresources.com.au/wp-content/uploads/2016/12/CANNACORD-15122016.pdf