Investment highlights

Shaping up as a world class cobalt deposit: The BPL tenements at Thackaringa cover near-surface, very large cobalt deposits which contain over 57,800 tonnes of contained cobalt metal. This equates to a large in-ground value of over A$1.8 billion (July 2014 cobalt price $31,500/t).

Importantly, the deposits are located beside the main trans-Australia railway, have excellent road access and are only thirty minutes drive from the mining centre city of Broken Hill (mining service industries, technical workforce, housing and community facilities).

The growing demand for cobalt and dependence on the Democratic Republic of Congo (DRC) for current world supply: BPL’s growing cobalt resource base is an important factor in future world cobalt markets.

Over 65% of world cobalt production was bi-product from copper and nickel mining and most of this comes from the DR Congo with 43% was refined in China. More than 80% of 2011 cobalt consumption occurred in the USA, Japan and the European Union and these countries have no cobalt producing mines of their own.

Clearly, future supplies of cobalt to meet rapidly growing demand for use in rechargeable batteries (automobiles, telephones, computers), super-alloys and hardened metals (motors, turbines, space travel, military hardware, aircraft) require certainty. BPL is well placed to become a significant producer of a large portion of world cobalt production in coming years.

Sulphuric Acid and other co-products will add considerable value: BPL’s cobalt mineralisation can be readily processed to a pyrite concentrate (0.4-0.5% cobalt) and this could either be rail freighted or processed on site. Recovery of cobalt from the concentrate, using a sulphide roast process will also produce large amounts of sulphuric acid, an industrial chemical with widespread use in the fertiliser and mining industries as well as in other industrial applications.

In volume terms, sulphuric acid (H2SO4) has the largest world-wide use of any chemical. The production of phosphate fertiliser materials is the major end use for sulphuric acid, accounting for nearly half of total world consumption. Australia imports about 400,000tpa of sulphur or sulphuric acid and most of this is used in eastern Australia to produce fertilisers and for processing of mineral deposits. Clearly, new production could readily contribute to this growing domestic market.

Sulphuric acid, together with high-iron residue may add considerable project value. Sodium feldspar and quartz produced as by product from concentrate processing may also have value considerable value in the ceramics, paving and tile industries.

Mineral Sand Project adds another dimension. In mid 2014 Broken Hill Prospecting applied for a large portfolio of heavy mineral sands (HMS) prospects south of Broken Hill. This new project includes 20 known heavy mineral sand deposits (titanium and zirconium) within five new exploration licence applications in the northern Murray Basin. All of the HMS prospects have been investigated by other mineral explorers and several have been shown to be of considerable size.

Recent advances in technology have resulted in lower cost and competitive processing options for fine-grained heavy mineral sands, unlocking an opportunity to take a fresh look these prospects. BPL will seek to define a deposit of about 50 million tonnes of around 5% HM (with ~2-4Mt contained HM). This could support mining 3-6 Mtpa, to produce ~200,000t HM/year.