Significant Upgrade for Thackaringa Cobalt Mineral Resource
Thackaringa Cobalt Project
- The global Mineral Resource estimate now comprises:
72Mt at 852ppm Cobalt (Co), 9.3% Sulphur (S) & 10% Iron (Fe) for 61.5Kt contained cobalt (at a 500ppm cobalt cut-off)
- The upgrade comprises a 31% increase in total tonnes and a 23% increase in contained cobalt (now 61,500 tonnes) compared with the June 2017 Mineral Resource estimate. This represents a major step forward in the Project's viability.
- 72% of the updated Mineral Resource is classified as Indicated, which reflects improved geological confidence after a major drilling program comprising 74 holes for approximately 12,500m.
- The Thackaringa Cobalt Project remains on target to become a world-class cobalt producer, with recent metallurgical testwork highlighting 88% cobalt recoveries from ore to high value cobalt sulphate product.
- The TJV remains focussed on completing a maiden Ore Reserve estimate as part of the Preliminary Feasibility Study.
- COB has delivered a notice claiming satisfaction of the TJV Stage 1 Milestones. BPL is carrying out an independent assessment, with particular focus on the new Mineral Resource and claimed expenditures, in order to take a view on compliance with Stage 1. Results of that independent assessment will be advised in due course.
Thackaringa Base & Precious Metals
BPL retains the base and precious metal rights at Thackaringa where recent geological mapping and sampling combined with newly acquired high resolution geophysics has greatly enhanced exploration targeting.
Newly discovered prospects characterised by outcropping quartz gahnite - a key vector for Broken Hill Pb-Zn-Ag style deposits, and rock chip sampling has defined extensive Cu-Pb- Zn-Au-Ag mineralisation.
BPL's Managing Director, Trangie Johnston commented:
"This resource upgrade comes at a time when cobalt prices have been experiencing large gains on world markets, hitting $US88,000 per tonne last week. Both the increase in the cobalt resource size at Thackaringa and the cobalt price combine to make this a valuable and strategic development of global magnitude. It adds significantly to BPL's assets both in terms of our ongoing participation in the JV and the increased potential for future royalty steams. The prospectivity of our Broken Hill leases has been also enhanced by the recent exploration success in identifying further occurrences of Broken Hill style mineralisation."
The updated Mineral Resource estimate at Thackaringa is divided into the three main deposits as detailed in Table 1 (see link below).
Cobalt Blue earn in Milestones
Under the TJV, BPL is the title holder of the tenement leases and COB can earn up to 100% of the Project if it completes a four-stage farm-in by committing $10.9 million project expenditure before 30 June 2020 and paying BPL $7.5 million in cash. BPL will be entitled to receive a 2% net smelter royalty on all cobalt produced from the Thackaringa tenements for the life of mine.
Subject to COB completing Stage 1 milestones, COB has a 51% beneficial interest in the Thackaringa Cobalt Project with BPL retaining a 49% beneficial interest. In order for COB to retain its 51% beneficial interest, key deliverables by 1 April 2018 are a 40Mt Indicated Resource sufficient to support a Pre-feasibility Study to JORC 2012 standard and certain expenditure obligations. A Pre-feasibility Study is due by 30 June 2018 and itself forms part of Stage 2 milestones whereby COB can earn up to 70% beneficial interest.
BPL will conduct an independent review of the Mineral Resource upgrade report from SRK when completed and expenditure obligations to determin COB meeting its obligations under Stage 1 of the TJV. The results of BPL's deliberations will be advised in due course.
Return of value to BPL shareholders
The successful spin-off of COB was completed in February 2017, with investors seeking shares and options exceeding the $10 million maximum being offered. The deal was an important initiative for BPL to realise significant value from its Thackaringa Cobalt Project.
BPL's shareholders received a total of 35 million COB shares as part of the capital restructuring and distribution, which was equivalent to 37 per cent of the IPO issued shares in COB. In addition, those BPL shareholders received an entitlement to a 1:4 issue of COB bonus options (total: 8,750,000 options).
The current value of this distribution is approximately $42M based on COB's current share price for those shareholders that retained COB equity. BPL shareholders that retained COB equities have benefited greatly in this way by the upgrade of the groups cobalt interests.
Thackaringa Base & Precious Metals
Under the terms of the TJV, BPL retains the rights to base and precious metals on the TJV tenements, where it is actively exploring for Broken Hill (Pb-Zn-Ag) style mineralisation.
Recent geological mapping combined with newly acquired high resolution geophysics has greatly enhanced base and precious metal exploration at the Thackaringa Project.
The Broken Hill Group, which hosts the world class Broken Hill Pb-Zn-Ag orebody comprising 300Mt of ore containing 30Mt Pb, 24Mt Zn, 1B oz Ag and 1M oz Au, is widely distributed across the Thackaringa Project with multiple prospects prioritised for further exploration.
Newly discovered prospects characterised by outcropping quartz gahnite - a key vector for Broken Hill Pb-Zn-Ag style deposits has greatly expanded our search for these world class deposits.
Broken Hill Region Expansion
BPL recently lodged three exploration licence applications in the Broken Hill Region, significantly increasing its overall exposure to this world class mineral province and securing a number of underexplored base, precious and industrial mineral prospects. The applications are expected to be granted during the first calendar quarter of 2018.
Apart from the clear potential for base and precious metals in this expanded tenement package, the Board believes that the industrial mineral potential of the Broken Hill Region has been systematically ignored over recent years. A number of large, advanced projects in the area will potentially bring additional and improved infrastructure services and/or generate their own industrial mineral demands, delivering a change to their economic case.
To view tables and figures, please visit:
About Broken Hill Prospecting Ltd
Broken Hill Prospecting Ltd (ASX:BPL) is an Australian exploration company focussed on the discovery and development of strategic mineral resources across two primary geographical areas; the Murray Basin Region (Heavy Mineral Sands) and the Broken Hill Region (industrial, base and precious metals, including the Thackaringa Cobalt & Base/Precious Metal Project).
Cobalt Blue Holdings Limited
Broken Hill Prospecting Ltd