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Broken Hill keeps the faith in cobalt markets

Last updated: 16:00 02 Nov 2015 AEDT, First published: 15:00 02 Nov 2015 AEDT

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Broken Hill Prospecting (ASX:BPL) has committed confidently in growing environmental, battery and superalloy markets by renewing its exploration rights at the Thackaringa cobalt-pyrite project in New South Wales.

The company confirmed today that it was extending its rights at two exploration licences at the project for another two years as deposit evaluations progress.

The move is considered a vote of confidence in Broken Hill Prospecting’s excellent position to take advantage of increasing demand for cobalt to meet growth in environmental and industrial uses including rechargeable batteries in automobiles and superalloys.

Since the company listed on the ASX in February 2011, estimates of Thackaringa’s resources have more than doubled to 35.7 million tonnes at 0.084% cobalt for 30,000 tonnes of contained cobalt.

The project is considered to have potential for an additional 37-59 million tonnes of resources at between 0.0775-0.084% cobalt.

Many mapped areas of cobalt-pyrite rock have yet to be drill tested.

Cobalt properties of temperature stability and corrosion/wear resistance make it useful in superalloy industries, while its presence in lithium-ion battery cathodes makes the element an important ingredient in battery market that are growing on the back of global trends in cleaner energy sources.


About Thackaringa

Thackaringa encompasses the two newly renewed exploration licences as well as two mining leases 25 kilometres southwest of south of Broken Hill.

Cobalt mineralised rock at Thackaringa can be concentrated and upgraded by simple gravity or flotation methods because the cobalt within all of the deposits is contained almost entirely within pyrite.

The mineralisation is made up almost completely by an assemblage of albite, quartz and pyrite and this allows conventional concentration methods to be applied during any future development of the resource.

After concentration, the cobalt-rich pyrite concentrate could be sent by train to a suitable location for further processing to separate the cobalt from the pyrite or this work could be undertaken at site.

There are several viable options for the processing and each would produce either sulphur or sulphuric acid during the separation process. Sulphuric acid is in demand by fertilizer producers and some metals leaching processes and could add considerably to the value to the project.


Mineral sands traction


Recent news from Broken Hill Prospecting has otherwise focused on development of its NSW mineral sands properties, including the Magic project which delivered a maiden resource in September of 15 million tonnes at 3.7% heavy minerals.

This followed a July announcement that the nearby Copi North deposit had defined 11.6 million tonnes at 6.9% heavy minerals.

Both projects are located in the company’s five tenements in the Murray Basin where previous exploration by Iluka Resources (ASX:ILU) has identified deposits of economic interest.

These are located close to existing infrastructure and Cristal Mining’s Ginkgo and Snapper operating mines. Cristal’s heavy mineral concentrates are trucked to the mineral separation plant near Broken Hill.

Copi and Magic are fully financed by private mining investment group Relentless Resources, which is providing $2 million of funding through a joint venture to earn a 50% interest in both projects as well as a related exploration licence application. 


Analysis

Broken Hill Prospecting’s move to maintain its exposure to the cobalt space may prove to be savvy as battery markets mature in the medium term.

The growth rate of resources at Thackaringa has been notable, with the project more than doubling in size since the company listed in 2011.

Thackaringa could benefit from sulphuric acid as a co-product, addressing Australian reliance on imported sulphur and providing opportunities for phosphate fertiliser and mineral processing industries.

The company’s progress in mineral sands development adds diversity to its jurisdictionally focused portfolio.

The recent resource estimate of at Magic provides a sequential development opportunity for a low-OPEX, low-CAPEX development after the company brings the equally low-cost, but higher-grade Copi North into production.


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