Positive Pre-Feasibility Study Results and Maiden Ore Reserve Estimate for the Thackaringa Cobalt Project
Thackaringa Cobalt Project Pre-Feasibility Study
- The PFS delivers strong results for the world class Thackaringa Cobalt Project, located on BPL's tenements near Broken Hill, NSW.
- COB submitted to BPL that it had met its TJV Stage 2 Hurdles. The TJV Management Committee has appointed an independent expert to review the PFS, confirming COB's submission that Stage 2 Hurdles have been satisfied. BPL will advise in due course the outcomes of this review.
- The PFS places a significant value on BPL's royalty on cobalt production at Thackaringa. BPL is reviewing the underlying royalty calculations and will advise the outcomes of that review in due course.
- The PFS confirms the Thackaringa Cobalt Project is of global significance as a sustainable, low-cost source of high purity cobalt sulphate for the battery revolution and recommends advancement to bankable feasibility studies.
BPL Managing Director and CEO, Trangie Johnston said
"Cobalt Blue's PFS demonstrates a robust project with excellent commercial metrics and potential for improvements as the project moves through bankable feasibility studies.
The projected commercial return to BPL from its royalty under the Thackaringa Joint Venture can now be assessed with some accuracy. This is an excellent outcome for BPL shareholders.
"BPL is conducting its technical review of the PFS and assessing COB's claims to have met its A$2.5 million expenditure obligations under the TJV Stage 2 Hurdles.
Thackaringa Joint Venture Terms
COB can earn an interest up to 100% of the Thackaringa Cobalt Project if it completes a four-stage farm-in. To do so, COB must commit $10.9 million in project expenditure before 30 June 2020 and pay BPL $7.5 million in cash. BPL is further entitled to receive a 2% net smelter royalty on all cobalt produced from the Thackaringa tenements for the life of mine and retains rights to certain intellectual property (patent processing technology) developed by the TJV. Further details of are included on page 3(see link below).
BPL's 2% Royalty
Based on COB's PFS, BPL's 2% royalty is anticipated to deliver approximately A$43 million to A$48 million revenue over the anticipated life of mine.
BPL is currently reviewing the basis of the PFS royalty calculation to ensure that the methodology is correct.
BPL's rights to Thackaringa Intellectual Property
BPL's rights to intellectual property developed by the TJV flow from its ownership of the TJV. Under the terms of the TJV each party holds a right to utilise such intellectual property on a non-exclusive, world-wide, royalty free basis.
BPL is looking forward to advancing the commercialisation of the new technology. The patent application made describes a process for recovery of metal from pyrite-bearing material. This process potentially has broad application throughout the world. It comprises thermally decomposing pyrite to produce pyrrhotite and elemental sulphur, and then leaching the pyrrhotite to extract the target metal.
BPL's Base and Precious Metals Rights at Thackaringa
Under the terms of the TJV, BPL retains the rights to base and precious metals on the TJV tenements, where it's actively exploring for Broken Hill (Pb-Zn-Ag) style mineralisation. BPL's recent market announcements detail geological mapping combined with newly acquired high resolution geophysics, which greatly enhance the understanding of the district's geological framework and will support future base and precious metal exploration at Thackaringa.
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 Thackaringa with multiple prospects prioritised for further exploration. Newly discovered prospects characterised by outcropping quartz gahnite rock, a key vector for Broken Hill Pb-Zn-Ag style deposits, has greatly expanded BPL's search for these world class deposits.
Continued Success in Return of value to BPL shareholders
BPL's successful spin-off of COB was completed in February 2017, with investors seeking shares and options exceeding the $10 million maximum being offered.
This important initiative has realised significant value from the Thackaringa Cobalt Project for BPL's shareholders. BPL's shareholders received 35 million COB shares, equivalent to 37% of the COB's issued shares under the IPO.
In addition, 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 A$42 million based on COB's current share price for those shareholders that retained their COB equity.
BPL shareholders who retained COB equities have benefited greatly through this transaction. BPL continues to benefit from its exposure to the Thackaringa Cobalt Project as a joint venture participant and royalty holder, through entitlements to utilise intellectual property and the $7.5million payment due with a decision to mine.
Along with BPL's strategic divestment of non-core mineral sands assets in mid-2017, the Company continues to demonstrate a keen eye for value adding and monetisation to the benefit of all BPL's shareholders.
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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