We develop means of computing exact degerenacies of BPS black holes on toric Calabi-Yau manifolds. We show that the gauge theory on the D4 branes wrapping ample divisors reduces to 2D q-deformed Yang-Mills theory on necklaces of P^1s. As explicit examples we consider local P^2, P^1 x P^1 and A_k type ALE space times C. At large N the D-brane partition function factorizes as a sum over squares of chiral blocks, the leading one of which is the topological closed string amplitude on the Calabi-Yau. This is in complete agreement with the recent conjecture of Ooguri, Strominger and Vafa.
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