Broken Hill Prospecting- Resources & Energy Symposium 2012
Cobalt – 2011 Supply Source Cobalt Ian Pringle Managing Director mineralisation Broken Hill Prospectingnear Broken Hill Limited (‘BPL’) (20-21 May, 2012) Sydney – Adelaide railway line
Important noticesDisclaimer This presentation contains forward-looking statements that involve subjective judgement and analysis and accordingly, are subject to significant uncertainties and risks, many of which are outside the control of, and are unknown to, Broken Hill Prospecting Pty Ltd ( “BPL”). In such circumstances, the forward-looking statements can be identified by the use of forward-looking words such as “may”, “will”, “expect”, “intend”, “seek”, “estimate”, “believe”, “continue” or other similar words. No representation, warranty or assurance is given or made in relation to any forward-looking statement by BPL or it’s representatives, In addition, no representation, warranty or assurance is given in relation to any underlying assumption or that any forward-looking statements will be achieved. Actual future events may vary materially from the forward-looking statements and the assumptions on which the forward-looking statements are based. Accordingly, presentation readers are cautioned not to place undue reliance on such forward-looking statements as a result of the uncertainties. In particular, BPL wishes to caution readers that these forward-looking statements are based on economic predictions and assumptions on reserves, mining method, production rates, metal prices and costs (both capital and operating) developed by BPL management in conjunction with consultants. This presentation and the forward-looking statements made in this presentation, speak only as of the date of the presentation. Accordingly, subject to any continuing obligations under the Corporations Act and the New Zealand and Australian Stock Exchange Listing Rules, BPL disclaims any obligation or undertaking to publicly update or revise any of the forward-looking statements in this presentation, whether as a result of new information, or any change in events, conditions or circumstances on which any such statements is based.The exploration target and potential being reported under Section 18 of the JORC Code is based on assessments of prospects within BPL’s tenure which are supported by drilling, geophysics, geological studies, imagery analysis, metallurgical test-work and preliminary modelling. However, the potential quantity and grade is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in discovery of a Mineral Resource.Competent Person Statement The review of exploration activities and results contained in this report is based on information compiled by Dr Ian Pringle, a Member of the Australasian Institute of Mining and Metallurgy. Dr Pringle is the Managing Director of Broken Hill Prospecting Pty Ltd and also a Director of Ian J Pringle & Associates Pty Ltd, a consultancy company in minerals exploration. He has sufficient experience which is relevant to the style of mineralization and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Dr Pringle has consented to the inclusion in this report of the matters based on his information in the form and context in which it appears.
What is cobalt? Cobalt is a minor metal with many special qualities....• Co is hard, heavy and has a high melting point. It used extensively in superalloys and high pressure and temperature resistant metals in energy turbines, jet motors, military hardware, aircraft, space craft etc...• Co is a major component in many new rechargeable batteries (electric cars, mobile phones, laptops....). Many lithium-ion batteries contain up to 60% Co.• Co is strongly magnetic and is used in magnets in preference to Ni and Fe• Co pigments have been used for many centuries for bright blue colouring.• Co is a principle component of vitamin B12, essential for blood and brain. Co is used in food supplements for both man and beast.• Co is used as; a catalyst, in jewellery, medical isotopes, cosmetics, ...... Cobalt is a metal of the future with growing demand in technology, health and energy industries of the modern world. Co is integral to defence, aerospace, and the energy industry. Co is threatened by supply disruptions due to limited domestic production and is a designated ‘Strategic Metal’ in the USA, China, Japan and Europe. Cobalt price range over last 5 years; $12-$50/lb or $22,000-$110,000/t Co
Why are BPL’s cobalt deposits special?Deposits of cobalt of significant size and mine-grade are few andgeographically isolated. Near Broken Hill, a distinctive type of deposit has beenrecognised by BPL and a new depositional model has assisted BPL tosuccessfully find large areas of near-surface cobalt mineralisation.• Co is mostly produced as a bi-product from some copper or nickel mines• From the estimated 98,000t (216mlb) of cobalt produced in 2011; – >60% came from the Democratic Republic of Congo (DRC) – >40% was refined in China 2011 Cobalt Mine Production – Over 80% was consumed by the USA, Japan and the EU DR Congo – No cobalt was mined in the USA, Japan, or the EU Canada – China produced a small amount of cobalt from its own mines Others China Source:• The DRC contains about half of the world’s Russia Zambia USGS Mineral Commodity known cobalt resources Australia Cuba Summary 2012Broken Hill Prospecting (BPL) has large cobalt resources which could be minedby open cut, can be readily upgraded to a Co-pyrite concentrate and mayprovide a reliable and alternative source for the world cobalt market.BPL has several future options.... BPL could mine and export a cobalt-pyriteconcentrate, process the concentrate on site or at another location and use oneof a number of processing options.
Location - important for future development• BPL’s project is located 25km SW of Broken Hill in western NSW• Main highway to Adelaide joins the northern part of the project• Main trunk railway line 500 metres from the deposits• Exploration license (EL6622) and two mining leases (ML86, ML87)• Geophysics (IP survey) and Pyrite Hill resource confirmation drilling completed in late 2011• New drilling has intersected Pinnacles mine spectacular zones of cobalt mineralization• The Railway Prospect is a new and very large deposit which will likely become a significant world cobalt producer
Project Geology – Co in surface deposits PYRITE HILL Inf Res; 16.4Mt at 1.83lb/t Co (plus 14-24Mt potential) BIG HILL Inf Res; 4.4Mt at 2.00lb/t Co (open to NE & at depth)
Albite-quartz-cobaltiferous pyrite gneiss View of Big Hill looking east from Pyrite Hill
channel fillBig Hill outcropConglomerate/breccia with rip-upclasts of f.g. ‘sediments’, monolithicChannel cuts through layered, andwell laminated beds bedding / layering
Sedimentary textures include layering of graded bedsBig Hill outcrops and slump breccia horizons. Typical of sediment deposition on a deep sea floor. quartz-albite-pyrite gneiss Geology - sediment-hosted pyrite Age - 1.7 billion years Model - Co mineralisation formed by bacteria in a saline sea
More cobalt – great potential beside the tracks! PYRITE HILL Railway Inf Res; 16.4Mt at 1.83lb/t Co Prospect (plus 14-24Mt potential) BIG HILL Inf Res; 4.4Mt IP survey at 2.00lb/t Co areas (open to NE & at depth)
IP plan with conductivity (colour)and chargeability (contours) Railway Prospect drill hole BER004 Scale; 500 metres massive cobaltiferous pyrite 40-90 metres 2cm
Railway Prospect• Continuity of outcropping pyrite-quartz-albite gneiss• Numerous gossans (after pyrite, some shown in red)• Correlation with anomalous cobalt in soil (range to 500g/t Co)• 2012 drilling at about 250m spacing• Pyrite gneiss outcrop 50- 300m wide, >2.5km long• Steep west to vertical dip• New, very large strata- bound cobalt deposit• Drill results with high grade cobalt - expected to be fully complete by early June 2012
Railway Prospect – drill section 1 Anomalous zinc (3.5%) , Co (2.41lb/t) and silver (6g/t) between 120-126m
Railway Prospect – drill section 2 BER012 27-72*m (>45m) of 3.85lb/t Co (incl 48- 57m of 4.89lb/t Co) BER009 33-47m(14m) of 2.42lb/t Co 57-92m (35m) of 2.01lb/t Co
RC drilling BER004 at the Railway Prospect Cobalt – 2011 Supply Source April, 2012• No residence within 5km• Limited land use area• Environmental impacts are manageable• Granted MLs and EL Railway Sydney - Adelaide• Great future mine site location!!
Cobalt – much more along trend? Railway Prospect PYRITE HILL Shaping up to be a Inf Res; 16.4Mt at 1.83lb/t Co (plus 14-24Mt potential) very large Co deposit Offset Prospect 1 hole , 22m of 1.8lb/t Co North Big Hill Prospect 1 hole , 17m of 2.2lb/t Co BIG HILL Inf Res; 4.4Mt IP survey at 2.00lb/t Co areas (open to NE & at depth)
Cobalt Resources• Combined Inferred Resources at Pyrite Hill and Big Hill of20.8Mt of 1.87lb/t Co (H&S, Nov 2011)• Also potential for 14 – 24Mt of cobalt mineralization of similargrade peripheral to the resource at Pyrite Hill (H&S, Nov 2011)• April-May 2012 drilling has discovered considerable amountsof new cobalt at Railway, Offset and North Big Hill Prospects• All of the Co deposits are open at depth and along trend• Co mineralization can be concentrated (gravity/flotation) intopyrite concentrate with plus 0.5% cobalt grade (with separationof feldspar/quartz)• Concentrate process options include bacterial leach, pressureleaching or oxidation of pyrite to produce cobalt, sulphuric acidand iron.• Next month BPL plans to commence a scoping study for a7.5Mta open cut mine with annual production of 7,000t of cobaltin pyrite concentrate.
Concept time-line for BPL development plans Q2 2012 Complete evaluation of current drilling at Railway, Offset and North Big Hill Prospect areas – determine conceptual target for open cut mine planning. Q3-Q4 2012 Scoping Study to determine basic parameters for a 7.5 million tpa open cut mine to produce about 7,000t cobalt in pyrite concentrate each year over a 15 year mine life. 2013 Pre-feasibility studies (resource drilling, metallurgical test work, engineering, processing and marketing studies), commence environmental, historical, cultural and land studies. 2014 Complete Feasibility studies, EIS, development funding and marketing. Commence Development Approval, community consultation. 2015 Development Approval completion – construction start-up in mid 2015. 2016 Initial production in early 2016.
Public capital raising of $A4.5m &Commenced Trading 17 Feb 2011 Corporate snapshotASX and NZSX Code: BPL and BPLOA ASX trades for BPL over 12 months, courtesy of E*TRADE AustraliaCurrent Cash: AUD2.0mShare price 16 May 2012: 9-10 centsDirectors/ManagementCreagh O’Connor (Ch) Corp Advise ConsultantDr Ian Pringle (MD) GeologistGeoff Hill (Matt Hill) FinanceRalph Stagg GeologistPeter Atkinson GeologistDonald de Boer Company secretaryFrancesco Girotto Office managerJohn Elliot Consultant GeologistWolf Leyh Consultant GeologistRob Barnes Consultant Geologist Shareholders Shares (m) %Capital So Co Limited 34.37 42%Shares total 82,581,900 Listed 29,257,511 New Talisman Gold Mines Ltd 17.93 22% Unlisted 53,324,389 (previously Heritage Gold NZ Ltd)Options total 46,340,950 Top 20 63.65 77% Listed (20c, 17/2/14) 11,190,950 Unlisted (20c, 17/2/16) 33,650,000 Unlisted (24c, 17/2/13) 1,500,000 Total shareholders: 620
Why is Broken Hill Prospecting different?• BPL is focussed on a new mineral development near Broken Hill.• BPL is finding large, near-surface cobalt resources located within sight of the main Sydney-Adelaide railway, 25km from Broken Hill.• Cobalt is a metal of the future with rapidly growing use in batteries and superalloys and many other evolving technologies.• There are worrying worldwide supply and demand issues for future cobalt production and these could result in +Co price fluctuation.• BPL will soon commence a scoping study for a 7.5Mtpa open cut mine with an annual production of pyrite concentrate containing about 7,000 tonnes of cobalt.• BPL’s goal is to become one of the world’s largest and lowest cost cobalt producers.• Co price could rise above 2007/8 levels of $50/lb, current price on LME is $31-32,000/tonne or about $15/lb.• BPL could also supply sulphuric acid processing bi-product to a growing local market demand.• BPL could also benefit from other value adding bi-products; – Feldspar for ceramics/tiles – High-grade iron ore residue
SummaryBroken Hill Prospecting Ltd is well positioned totake advantage of increasing cobalt demand andrising cobalt prices as it develops into a low cost cobalt producer. ----------------- Thank you ----------------- Dr Ian Pringle, Managing Director (email@example.com, +61 408 548767) Broken Hill Prospecting Ltd is listed on the ASX and NZX(code BPL)Please visit our booth, meet our people and find out more about BPL, our deposits and the cobalt industry