Ian Pringle - Broken Hill Prospecting


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The 3rd annual Resources & Energy Investment Symposium (REIS) is on 19-22 May, once again held in the unique city of Broken Hill; Last year’s event exceeded the expectations of all that attended - including over 350 delegates, 12 keynote speakers and more than 30 resource companies presenting their investment opportunities.

A focus for this year’s symposium will be on the current economic climate including its challenges and opportunities, not only in the Australian resources industry, but Australia’s position in the international market.

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Ian Pringle - Broken Hill Prospecting

  1. 1. Cobalt – 2011 Supply Source‘World class’cobalt/pyrite depositsnear Broken HillPyrite could fuel the future Broken HillSulphuric acidCobaltEnergyHematite CinderCeramicsDr Ian PringleManaging Director20 May, 2013Broken Hill Prospecting Limited(ASX:BPL)
  2. 2. Disclaimer 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 HillProspecting Pty Ltd ( “BPL”). In such circumstances, the forward-looking statements can be identified by the use of forward-lookingwords 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-lookingstatements will be achieved. Actual future events may vary materially from the forward-looking statements and the assumptions onwhich the forward-looking statements are based. Accordingly, presentation readers are cautioned not to place undue reliance onsuch 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 andassumptions on reserves, mining method, production rates, metal prices and costs (both capital and operating) developed by BPLmanagement 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 ExchangeListing Rules, BPL disclaims any obligation or undertaking to publicly update or revise any of the forward-looking statements in thispresentation, whether as a result of new information, or any change in events, conditions or circumstances on which any suchstatements is based.The exploration target and potential being reported under Section 18 of the JORC Code is based on assessments of prospects withinBPL’s tenure which are supported by drilling, geophysics, geological studies, imagery analysis, metallurgical test-work andpreliminary modelling. However, the potential quantity and grade is conceptual in nature, there has been insufficient exploration todefine 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 informationcompiled by Dr Ian Pringle, a Member of the Australasian Institute of Mining and Metallurgy. Dr Pringle is the Managing Director ofBroken Hill Prospecting Pty Ltd and also a Director of Ian J Pringle & Associates Pty Ltd, a consultancy company in mineralsexploration. He has sufficient experience which is relevant to the style of mineralization and types of deposits under consideration andto the activity which he is undertaking to qualify as a Competent Person as defined in the December 2004 edition of the AustralasianCode for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Dr Pringle has consented to theinclusion in this report of the matters based on his information in the form and context in which it appears.。IMPORTANT NOTICES
  3. 3. Location - important for future development Located 25km SW of Broken Hill inwestern NSW Main highway to Adelaide cuts thenorthern part of the project Main railway beside the deposits Exploration license (EL6622) andtwo mining leases (ML86, ML87) Geophysics (IP survey) and PyriteHill resource confirmation drillingcompleted in late 2011 Drilling in 2012 & 2013 intersectedspectacular zones of cobaltmineralisation NE of Big Hill The Railway Prospect is a new andvery large deposit which will likelybecome a significant world cobaltand sulphuric acid producerPinnacles mine
  4. 4. Project Geology – Co in surface depositsPYRITE HILLInf Res; 16.4Mt at 1.83lb/t Co(plus 14-24Mt potential)BIG HILLInf Res; 4.4Mtat 2.00lb/t Co(open to NE &at depth)RAILWAYInf Res; 14.9Mt at 1.83lb/t Co(plus 23-35Mt potential)View on next slide
  5. 5. No residence within >10km, limited land use Environmental impacts are manageableAlready has MLs (and EL) Excellent future mine site locationVery well located to rail and road …………. View towards EASTRailwayCobaltDepositOffsetCobaltDepositBig HillCobaltDepositBrokenHillPyrite Hill Cobalt DepositView towards EASTView towards WESTPt Pirie
  6. 6. Project Geology – Co in surface depositsPYRITE HILLInf Res; 16.4Mt at 1.83lb/t Co(plus 14-24Mt potential)BIG HILLInf Res; 4.4Mtat 2.00lb/t Co(open to NE &at depth)RAILWAYInf Res; 14.9Mt at 1.83lb/t Co(plus 23-35Mt potential)
  7. 7. Railway ProspectBED001IP plan with conductivity (colour)and chargeability (contours)
  8. 8. Cobalt –pyrite continues at depthHigh-grade cobalt-pyrite extends atdepth along thewestern margin ofthe Railway CobaltDeposit2013 drillingat BED001
  9. 9. Comparable size to the Broken Hill Ore body?PYRITE HILLInf Res; 16.4Mt at 1.83lb/t Co(plus 14-24Mt potential)BIG HILLInf Res; 4.4Mtat 2.00lb/t Co(open to NE &at depth)RAILWAYInf Res; 14.9Mt at 1.83lb/t Co(plus 23-35Mt potential)The Railway CobaltDeposit ‘footprint’ ....shaping up to be ofsimilar size to theBroken Hill ore bodyLong section through the BH orebody?
  10. 10. What is cobalt? ...... A metal of the future Cobalt (Co) has special qualities... hard, heavy, high melting temperature Co is a ‘Strategic Metal’ in the USA, China, Japan and European Union Co’s price range over last 5 years: $12-$50/lb ($22,000-$110,000/t) Co is widely used in the following applications: superalloys & metals for turbines, jets, military, aircraft, space. rechargeable batteries (electric cars, mobilephones, laptops....). Many lithium-ionbatteries contain up to 60% Co a strong magnetic(better than Ni and Fe) pigments used for bright bluecolouring in vitamin B12 (blood and brain) a catalyst, in jewellery,medical isotopes,cosmetics, etc.
  11. 11. Why are BPL’s cobalt deposits special? Cobalt is mostly produced as a bi-product from some copper or nickel mines From the estimated 98,000t (216mlb) Co produced in 2011;o >60% came from the Democratic Republic of Congo (DRC), >40% was refined in Chinao Over 80% consumed by the USA, Japan, China and the EU. None mined in the USA, Japan, EU The DR Congo: 50% of the world’s known total cobalt resources, 60% Productiono In early April 2013 DRC announced a ban on exporting cobalt concentrateo Current uncertainty of future Co supply for growing world demand. Co prices risen to US$27,500/tDR Congo CanadaOthers ChinaRussia ZambiaAustralia CubaMorocco New CaledoniaBrazil2011 Cobalt Mine ProductionSource: USGS Mineral Commodity Summary 2012
  12. 12. Cobalt price trend on LMESource; London Metals ExchangeDRC announced ban oncobalt exports
  13. 13. Concentrate Scoping Studies have boosted development options Completed by GHD in Nov 2012 Scoping studies have identifiedrobust economics for productionof pyrite concentrate for pyriteroasting to produce sulphuricacid, cobalt & hematite cinderfor steel/cement Five fast-track, low costdevelopment options identifiedat nominal processing rates of1.5 – 7.5 million tonnes perannum First step in ongoing cobaltdevelopment, infrastructure andmarketing evaluation
  14. 14. A staged development? with combination of the following ore processing options: Start-up production of 1.5Mtpa of 35% pyrite product from mining, crushing andtransportation of high-grade cobalt-pyrite ore. Estimated capital cost of A$6.5 million Estimated operating cost of A$14.3 million per year Benefits include; low capital investment, negligible water use, low powerrequirement, early cash flow Flotation processing of 1.5Mtpa of cobalt-pyrite ore feed for production of 300,000tpa of85-90% pyrite concentrate. Estimated capital cost of A$74 million Estimated operating cost of A$17.8 million per year Flotation processing of 7.5Mtpa of cobalt-pyrite ore feed to produce 1.5mtpa of 85-90%pyrite concentrate. Estimated capital cost of A$190 million Estimated operating cost of A$50.9 million per year Potential estimated revenue return for concentrate processing using anestablished sulphide roast facility is $44 per tonne of ore feed and a 1.6 year pay-back periodPyrite to produce sulphuric acid – Key Points
  15. 15.  The dynamics of the sulphuric acid market is complex, involving the interplay ofby-product supply and variable demand. There are major variations in pricingbetween regions because of transport and raw material availability. The production of phosphate fertiliser materials is the major end use forsulphuric acid, accounting for nearly 52% of total world consumption in 2011.The remainder is consumed by a wide range of industries including; plastics,fibres, oil refining, metals and mineral processing. Future growth in sulphuric acid use is anticipated with an increasingpopulation as developing countries switch to higher nutrition food crops thatrequire soil improvement. Overall, there has been a general increase in demand for sulphuric acid andworld consumption increased by about 58% between 1990 and 2011. Decliningacid consumption has occurred in Russia and Europe since the late 1980s butthere has been a considerable increase in demand by socialist Asia(China, Cambodia, N Korea, Laos, Mongolia and Vietnam) since 1990. China dominates sulphuric acid production to feed domestic demand Australia is a net importer (>400,000t imported in 2012) and has a growinglocal marketSulphuric acid is industry’s most used chemical
  16. 16.  Future processing by ‘roasting’ of BPL’s cobalt-pyrite couldproduce electric power with a carbon-neutral footprint. A ‘clean’ energy bonus is possible for future cobalt and H2SO4processing. Steam from exothermic heat generated by pyrite concentrate‘roasting’ and sulphuric acid production could be used for electricpower generation for future on-site processing and infrastructure. Sale of surplus, sustainable, zero-carbon energy generated bythis process could also add considerable revenue. For a typical 2,000 MTPD sulphuric acid plant it is possible 18-24MW of surplus electricity could be produced.Future processing could also generate electric power
  17. 17. Corporate snapshotMain office: Sydney, L14, 52 Phillip StreetPublic capital raising of $A4.5mCommenced Trading 17 Feb 2011ASX Code: BPL and BPLOACurrent cash: AUD0.6mShare price, 16 May 2013: 6.1-7.0 centsShareholders Shares (m) %So Co Limited 34.37 42%New Talisman Gold Mines Ltd(previously Heritage Gold NZ Ltd)17.93 22%Top 20 63.65 77%Total shareholders: 620Directors/ManagementCreagh O’Connor (Chairman)Dr Ian Pringle (MD)Geoff Hill (Alternate: Matt Hill)Peter AtkinsonRob BarnesCorp Advise ConsultantGeologistFinanceGeologistGeologistFrancesco GirottoJohn ElliotWolf LeyhRalph StaggCompany secretaryConsultant GeologistConsultant GeologistResources ConsultantCapitalShares totalListedUnlisted82,581,90029,257,51153,324,389Options totalListed (20c, 17/2/14)Unlisted (20c, 17/2/16)Unlisted (24c, 17/2/13)46,340,95011,190,95033,650,0001,500,000Co
  18. 18. Why is Broken Hill Prospecting an excellent investment? BPL’s pyrite could provide an industry ‘backbone’ for the future Broken Hill BPL has 100% of world-class cobalt-pyrite resources Location – BPL’s deposits are within sight (500m) of the Sydney-Adelaide rail andclose to mining city and infrastructure Cobalt - increasing use in batteries, superalloys and many other evolvingtechnologies but...security of Co supply as DRC restrictions start to bite. Sulphuric acid – strong market demand for fertiliser and mineral processing Electric power – potential to produce all process energy requirements as well assupply electric power to the national grid. Other potential value adding bi-products;– Feldspar for ceramics/tiles– High-grade iron ore (hematite) residuefor use in steel or cement industries
  19. 19. Deposits are unique and of world class size ……….Dr Ian PringleManaging Director0408 548767Broken Hill Prospecting Ltdis listed on the ASX and NZX(ASX: BPL)Please visit our website www.bhpl.bizto find out more about BPL, ourdeposits, our plans and thecobalt industry.“Broken Hill Prospecting Ltd is well positioned totake advantage of increasing world cobalt demand,uncertainty of cobalt and acid supplies and risingcobalt price as it develops into a low cost cobalt andsulphuric acid producer.”Big Hill 3kmRailway (central)Pyrite Hill 5km