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Corporate Spotlight

Australian exploration company focussed on the discovery and development of strategic mineral resources across two primary geographical areas; the Murray Basin Region & the Broken Hill Region (industrial, base and precious metals, including the Thackaringa Cobalt & Base/Precious Metal Project).
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2018 is going to be a big year

THACKARINGA UPDATE

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Thackaringa Joint Venture Update

ASX Announcement 26 February 2019


  • BPL retains a 30% beneficial interest in the Thackaringa Cobalt Project (Project) 
  • BPL has 100% legal ownership of the tenements where the Project is based 
  • BPL also retains all base and precious metals rights 
  • BPL has a 2% Net Smelter Royalty on all future production 
  • BPL rejects all of Cobalt Blue’s current claims


BPL’s Position is Consistent and Responsible 

BPL directs its shareholders to the clear and consistent announcements it has made in recent months. 

1. We announced on 30 October 2018 that, as a result of COB’s notice of withdrawal from the TJV Earning Period: 

• COB was no longer entitled to earn any additional ownership interests in the Project via the earning process. This means the equitable ownership interest remains with BPL holding 30% and COB holding 70%. This is a considerable positive shift in value to BPL’s shareholders. 

• COB’s appointment then ceased as Manager of the Thackaringa Cobalt Project under the TJV. 

• COB was solely responsible for the risk and cost of work being undertaken at Thackaringa that was approved by the TJV Management Committee (TJVMC) during the Earning Period 

2. BPL announced on 20 November 2018 that resolutions purported by COB to have been passed at the TJVMC meeting on 16 November 2018 were considered by BPL to be invalid. Under the TJV, certain critical decisions require a unanimous vote. They include the ‘scope and standard’ of a Bankable Feasibility Study.


New Dispute Issued 

BPL rejects all of COB’s recent claims announced on 18 February and has issued a new Dispute Notice regarding the dilution claims.


4-Step Action Plan

BPL proposed a vision on 21 November 2018 to restore value to the Project for both companies and their respective shareholders. Our vision involves a 4-Step Action Plan to ensure the professional delivery of the Project: 

1. Appointing a respected, professional and independent manager. 

2. Correct fundamental technical and commercial deficiencies in the Pre-Feasibility Study (PFS) released in July 2018 while taking into account current market conditions and the major correction in commodity prices in the battery space. 

3. Jointly determining an appropriate scope and standard for the next stage of the project. 

4. Both companies utilising available cash resources effectively and living within our means to achieve these goals.


BPL Prefers to Negotiate an Amicable Resolution 

BPL prefers to negotiate an agreed path with COB so the Project can be advanced. Regrettably, we have had no success to date. The large common shareholder base between BPL and COB makes it important for us to continue in our endeavours. COB’s 18 February announcement seeks to remove 4 of the 7 current disputes between the two parties from mediation and put them to an expert determination. Thisis inappropriate given the nature of the disputes and BPL has formally given notice to COB to move to mediation.


Click here to view the full announcement

CEO’S LETTER

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CEO’S LETTER TO SHAREHOLDERS 

ASX Announcement 21 November 2018


LET’S GET THACKARINGA BACK ON TRACK 

The Board of Directors at Broken Hill Prospecting Ltd (ASX: BPL) has a very clear and realistic view about the significant value that the world class Thackaringa Cobalt Project can deliver for our shareholders and those of our joint venture partner, Cobalt Blue Holdings Ltd (ASX: COB).


BPL has a strong vision for the Project that we wish to share with our shareholders.


We welcome all the support you can give us in pursuit of our goal to get Thackaringa back on track.


By adopting our plan, we can overcome recent disagreements and place the Project firmly back on the path to development.


BPL’s Vision 

To restore faith in Thackaringa and deliver a major increase in value to shareholders, the two partners need to adopt a 4‐Step Action Plan to ensure the Project’s delivery. They are:

  • Appoint a respected, professional and independent manager. 
  • Correct the deficiencies in the Pre‐Feasibility Study (PFS) that was released last July. 
  • Jointly determine the appropriate scope and standard for the next stage of the Project. 
  • Use our available cash resources effectively and live within our means to achieve these goals.


This Action Plan will be of immediate benefit to BPL and COB shareholders, because it will restore unified direction, purpose and confidence for delivery of the Project. 


We seek to convince COB of the significant benefits at hand


Thackaringa’s Value 

COB’s PFS, despite its apparent deficiencies, confirmed our belief that the Thackaringa Cobalt Project has the potential to become a world class cobalt producer.


BPL regrets COB’s decision to withdraw from Stage 3 of the Thackaringa Joint Venture. However, this action has crystallised a 30% interest in the Project for BPL and our shareholders, which we believe has significant value. We also have our ongoing royalty interest.


COB’s action represents a major value shift, at the Project equity level, that your Board will seek to maximise. 


Thackaringa Pre‐Feasibility Study 

While COB’s PFS was positive, a review by BPL’s independent adviser and by Wood PLC, which was acting on behalf of the Thackaringa Joint Venture, identified many areas that were deficient.


These deficiencies can be corrected. It is clear, however, that experienced management is required to run the Project now and in the future. This is something BPL has recommended to COB for many months. 


The deficiencies have been hasty, ill‐considered and do not follow requisite procedures stipulated by our joint venture processes. Of real concern is the actual commercial viability of the untried process technology developed by COB on which the PFS is based.  


BPL’s Recent Actions 

Since the PFS was released, BPL has sought to negotiate with COB a sensible and agreed path so that the Project can be advanced. We have had no success to date, however given the large common shareholder base between BPL and COB, we will continue in our endeavours.  


BPL has also acted via the dispute resolution mechanisms of the Thackaringa Joint Venture to preserve the value of the Project. We are seeking to impose reasonable and normal checks and balances on management and to ensure prudent financial management and reporting of the joint venture’s funding, given current difficult market conditions.


BPL’s Board appreciates the support it is receiving from our shareholders. The Board will endeavour to resolve these matters as expeditiously as possible by working co‐operatively with COB. That is the best way to unlock the extensive value that lies in the ground at Thackaringa.


Click here to view the full announcement

UPDATE

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Broken Hill Exploration Expansion & Cobalt Update

ASX Announcement 20 August 2018

Exploration Expansion 

Strategy 

  • Three new exploration licences covering a total of 209 km2 have been granted in the Broken Hill district increasing the Company’s exposure to this world-class mineral province. 
  • The tenements cover under-explored ground with numerous base, precious and industrial mineral prospects. 
  • Archived drill core from the historical Burtt & Catterson’s Cu–Co prospect has been sampled and is being re-assayed.

Targets  

  • A diversified exploration approach will be adopted for: 

– Base Metals (Cu–Pb–Zn–Ni–Co) 

– Precious Metals (Au & Ag) 

– Industrial Minerals and Non-metallics

  • A new era of on-ground exploration will commence at Thackaringa for base and precious metals and to extend known cobalt deposits.  
  • Numerous polymetallic prospects have been identified ranging from emerging through to advanced.

BPL Managing Director and CEO, Trangie Johnston, said: 

“Commencement of a multi-faceted exploration program at Broken Hill highlights the unique character of this great mining region and the high quality targets within our portfolio. 

The application of modern exploration technologies gives us fresh eyes with which to thoroughly assess our ground at Thackaringa and also the three new licences granted to us closer to the Broken Hill line of lode. 

The fact that this is a multi-play for base and precious metals, including cobalt makes the work even more important for our shareholders.”

Activity - Base & Precious Metals & Cobalt  
  • Broken Hill Group Targets: 
– Induced polarisation (IP) surveys to test the Himalaya North and Pyramid Hill prospects
– Aim is to identify strike and dip extensions to nearsurface mineralisation for drill testing  
  • Thackaringa Group Targets:
– Diverse prospects with interesting metal associations identified in reconnaissance sampling (including Cu–Co, Cu–Zn)
– Prospect-scale geological mapping
– Grid based sampling and rock chip geochemistry
– Anomalous Cobalt

Cobalt Update
  • Considerable potential exists to expand the Cobalt resource base at the Thackaringa Cobalt Project. 
  • Only 5.5km of a potential 40km strike length of the cobalt pyritic host unit of the Himalaya Formation has so far been drill tested.  
  • Targets prioritised for drilling using results of major 2017 airborne electromagnetic survey.  
  • Current Mineral Resource of 72Mt at 852ppm cobalt (Co), 9.3% sulphur (S) & 10% iron (Fe).
  • Anomalous cobalt found in rock chips from several additional polymetallic Thackaringa Group prospects.

Broken Hill Project – Portfolio Expansion 
Broken Hill Prospecting Limited (ASX: BPL) has been granted three exploration licences in the Broken Hill district, which significantly increases the Company’s exposure to this world class mineral province.

The tenements cover 209 km2 of under-explored ground with numerous base, precious and industrial mineral prospects.

The three new areas augment the Company’s existing rights to base and precious metals at the Thackaringa Cobalt Project (joint venture with Cobalt Blue Holdings Ltd; ASX:COB) and represent a strategic broadening of BPL’s exploration focus in the Broken Hill Region.

Rocks of the Broken Hill Group, which hosts the giant Broken Hill Pb-Zn-Ag orebody comprising 300Mt of ore containing 30Mt Pb, 24Mt Zn, 1B oz Ag and 1M oz Au, are widely distributed across the tenement portfolio with multiple prospects prioritised for further exploration.

Burtt & Catterson’s Cu-Co Prospect (EL 8773 Main Line) 
This tenement covers an area of approximately 20 square km and allows exploration for base, precious and industrial minerals (Groups 1, 2 & 5). The southern part is along strike from the world class Broken Hill Line of Lode and covers the historical Burtt & Catterson’s Copper Prospect which was tested by three drill holes in the 1950s, but which has since seen only cursory surface exploration. Numerous other copper occurrences have been identified and local gold anomalies occur in historical surface geochemical sampling.

The historical diamond core from Burtt & Catterson’s is preserved at the Geological Survey of NSW’s E. C. Andrews core facility in Broken Hill. The historically sampled Cu–Co mineralised intervals have been resampled by BPL and submitted to ALS Orange laboratory for assay of a full economic suite of metals including gold. Results are expected within the next month.

Click here to view the full announcement

PROJECTS

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Thackaringa Cobalt Shaping up as a world class deposit 

The BPL tenements at Thackaringa, held in joint venture with ASX Listed Cobalt Blue Holdings Ltd (ASX:COB) cover near surface, very large cobalt deposits. The project is advancing towards the delivery of a PFS by June 2018, after which time it is expected that the project will move into a full, bankable feasibility study. 

Quarterly Report for the quarter ended 30 June 2017

http://www.bhpl.biz/wp-content/uploads/2017/08/1696681.pdf

Exceptional Infrastructure supports the Thackaringa Project – the deposits are located beside the main trans-Australian railway, have excellent road access and are only 30 minutes drive from the mining City of Broken Hill (first class mining service industries, technical workforce, housing and community facilities. Excellent power and water supply options will support project development and proximity to Broken Hill will obviate the need for an accommodation camp or FIFO facilities. 

Ownership Rights - BPL currently owns 100% of the legal interest in Thackaringa; COB holds 51% beneficial interest and can, on meeting certain milestones, retain that interest and ultimately move to 100% legal and beneficial interest.

To do so, apart from meeting project milestones, COB must also pay $7.5 million to BPL and pay a 2% net smelter return royalty on all cobalt production to BPL. BPL’s announcements provide more details on the ownership structure and joint venture terms.

http://www.bhpl.biz/2012/06/cobalt-deposits-continue-to-grow/

http://www.bhpl.biz/projects/base-metal-deposits/

http://www.bhpl.biz/projects/exploration-plans/murray-basin-minerals-current-exploration-licence-applications/

http://www.bhpl.biz/projects/exploration-plans/


MANAGEMENT

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BPL has an experienced team Board of Directors and Executives who have an impressive track record of mineral discovery and development.

CREAGH O’CONNOR: CHAIRMAN
AM, FAIM, FAICD

Creagh has approximately 40 years experience as a chief executive and board member for a number of public and private companies. During this time he has been involved in managing a number of Australian and international oil, gas and mineral projects.

Creagh is an experienced board member and his most public role was with Cricket Australia as Director for 11 years and Chairman from 2005 to 2008. In addition he was Director of South Australian Cricket Association (SACA), Director of the International Cricket Council, Director of the Kerry Packer Cricket Foundation, Director of Rundle Capital Ltd, Governor of the Bradman memorial fund, Chairman of the Lords Taveners, Trustee of the Les Favell Foundation and Chairman of ACHA Health Ltd.

He is currently a director of A G O’Connor Pty Ltd and chairman of the Maurice de Rohan International Scholarship Fund.

TRANGIE JOHNSTON: MANAGING DIRECTOR
BSC (HONS), MSC, AUSIMM

Trangie Johnston is a geologist with 21 years’ experience in exploration, project development and mining activities. His diversified career spans the private, public, consulting and government sectors, with experience extensively throughout Australia and internationally.

He is currently a director of Cobalt Blue Holdings and has previously held corporate and senior management positions at KBL Mining Limited, MM Mining Limited, Compass Resources Limited and SRK Consulting Pty Ltd.

Trangie is experienced in a diverse range of ore deposit types, commodities and operations and has a sound understanding of geo-scientific, metallurgical and engineering principles. He has previously implemented programs for resource and reserve expansion through maiden discoveries and deposit extensions across the base and precious metals, bulks, energy and rare earth markets.

GEOFFREY HILL: NON-EXECUTIVE DIRECTOR
BEC, MBA, FCPA, ASIA, FAICD

Geoff was a director of BPL from 1989 to June 2014, and re-joined the board on 27 August 2015.  He has extensive experience in the identification and implementation of mergers and takeovers and has acted for a wide range of corporate clients in Australia and overseas. Mr Hill also has extensive experience in providing corporate advice to mining companies.

He is Chairman of the International Pacific Securities Group. He is Chairman of the ASX Limited, Pacific American Coal Ltd and Asian Property Investments Ltd. He is a previous Chairman of Mount Gibson Iron Ore Limited and a Director of Talisman Gold Mines Limited.

MATTHEW HILL: NON-EXECUTIVE DIRECTOR
MBA, AFSL, FFIN, APDT

Matthew has over 20 years experience in financial services and investment banking. He is currently the Chief Executive Officer of New Talisman Gold Mines Limited (formerly Heritage Gold NZ Limited). Matthew is an experienced merchant banker having worked previously at Potter Warburg,  Eventures (a joint venture between Newscorp and Softbank), Pitt Capital and Souls Private Equity Limited. Matthew specialises in resource and company listings on the ASX and NZX and acts for a number of multinational clients.  Matthew holds a Graduate Diploma in Applied Finance and Master of Business Administration. He is a fellow of the FINSIA and a member of the Australian Institute of Company Directors.

DENIS GELDARD: NON-EXECUTIVE DIRECTOR
AWASM, MAIMM

Denis has over 40 years technical and operational experience in mineral exploration and project development in Australia and internationally. He has over 20 years experience in the Heavy Mineral Sands Industry with  companies such as Western Titanium Ltd, Associated Minerals Consolidated and Iluka Resources.

Denis is a Mining Engineering graduate from the Kalgoorlie School of Mines in Western Australia. He has managed and run a number of junior and mid-tier mining and exploration companies and mining  operations over the past 40 years including directorships of a number of Australian listed mining and exploration companies.


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