Next Generation Broken Hill Miner Goes Public

9 November 2010

Next Generation Broken Hill Miner Goes Public

  • Seeks to develop mine at Pyrite Hill cobalt deposit
  • Exploration underway on Broken Hill-style massive sulphides showing base metal promise
  • Agreement to secure and treat tailings dumps in nearby region

Investors are being offered entry into the next generation of mining companies emerging near the historic centre of Broken Hill, with explorer and developer Broken Hill Prospecting Ltd (ASX code BPL) today announcing a $5 million initial public offering to advance its cobalt and base metal projects.

BPL director Mr Geoff Hill said: “We are bringing new thinking, technology and capital to finding base metals in this historically rich region. Just down the road, at Broken Hill, the richest base metal ore body that the world has known was discovered 127 years ago. That is still being mined today. Now, companies are finding attractive deposits near this line of lode using fresh approaches.”

The company has an active exploration program currently underway, funded by a pre-IPO share issue earlier this year which attracted $890,000.

BPL has a cobalt deposit called Pyrite Hill on its leases at Thackaringa, 25km south-west of Broken Hill, which is potentially attractive at current prices using new treatment technologies to produce cobalt metal. At least 15 new high quality cobalt, silver, lead and zinc targets have recently been discovered, with at least three having demonstrated potential for economic grades. BPL has added to this by signing an agreement with the ASX-listed Metals Finance Ltd to secure and treat tailings dumps in surrounding areas to generate cash in the short term.

The IPO will raise funds for a two-year exploration, development and evaluation program on BPL’s Broken Hill-style massive sulphide prospects, and to embark on a regional exploration program around the western NSW town.

The IPO is offering up to 25 million 20c shares from investors in Australia and New Zealand. There will also be one free option for every two shares, exercisable at 20c on or before three years from the date of its dual listing on the Australian Securities Exchange and the New Zealand Stock Exchange.

BPL has a 20-year history in the Broken Hill region, and most recently has operated as a joint venture between So Co Ltd, part-owned by the family interests of noted corporate advisor and listed company director Mr Hill, and the listed Heritage Gold NZ Ltd. Heritage shareholders are being offered a priority entitlement in the IPO.

Heritage’s executive director Mr Peter Atkinson said: “We bought into this venture with BPL several years ago, and we are very excited about what we have found since then. Exacting field work has yielded results in an area that is largely flat and featureless.”

Consulting geologist Mr Wolfgang Leyh, who provided an opinion on BPL’s tenements, said: “This area is still well and truly under explored. Broken Hill style ores are historically known to be high grade by world standards and even the smaller showings are very worthwhile exploration targets. The Broken Hill region has lacked systematic geological exploration and is only sparsely drill tested. Moreover, past geophysical exploration had relied heavily on electrical techniques which have proved to be generally unsuitable to the Broken Hill region.”

The historic base metal mines at Broken Hill have produced more than 200 million tonnes of high-grade ore valued at more than $80 billion. Perilya Ltd continues to mine the main lode. In recent years, a silver, lead, zinc deposit of 14 million tonnes called Pinnacles was discovered to the north-east of BPL’s leases mid-way between Broken Hill and Thackaringa, away from the main lode. Perilya has also found a series of mineralised lenses to the north- east of Pinnacles that could be added to their regional resource inventory.

Also included in the recent discoveries is BPL’s Pyrite Hill and Big Hill cobalt deposits, which has a JORC inferred resource of more than 14 million tonnes at a grade nearly 2.2 lb/tonne. The find remains open along strike and at depth, and both prospects are to be a focus of the upcoming exploration and evaluation program.

Details of the Offer

  • Up to 25 million 20c shares are being offered in BPL. The minimum offer is for 15 million shares and the company is able to accept over-subscriptions of 10 million shares.
  • One free option exercisable at 20c within three years of listing will be issued for every two shares purchased.
  • The lead manager is Martin Place Securities Pty Ltd.
  • The offer opens on 15 November 2010 and closes on 6 December 2010.
  • Quotation of the shares and options are expected to commence on 17 December 2010 on both the Australian Securities Exchange and the New Zealand Stock Exchange.
  • A prospectus can be obtained by calling 1800 647 299 toll free or +612 8256 3370 international. It can also be downloaded from: http://www.bhpl.biz/inner.asp?pcat=publications&cat=prospectus

For further information call

Geoff Hill, Director, Broken Hill Prospecting Ltd: +61 411 539 000
Peter Atkinson, Executive Director, Heritage Gold NZ Ltd: +64 21 630 463
Aust media – Alan Deans, Partner, Last Word Corporate Communications: +61 427 490 992
NZ media – Jillian Talbot, Director, Reach Consulting: +64 21 493 820