Early drill results include wide and high-grade intersections of cobalt mineralisation at Offset and Railway Prospects.

Transcription

1 27 April 2012 Australian Stock Exchange Limited Exchange Centre, Level 6, 20 Bridge Street, SYDNEY, NSW 2000 BROKEN HILL PROSPECTING LTD QUARTERLY REPORT FOR THE PERIOD TO 31 March 2012 ( BPL ) is pleased to provide the following report on corporate news and exploration activities undertaken at the Company s projects (Figure 1) during the three month period ending 31 March Additional information about the Company is available on BPL s website at Highlights and Summary Early drill results include wide and highgrade intersections of cobalt mineralisation at Offset and Railway Prospects. 13 RC drill holes of a 21hole program have been completed. Cobaltiferous pyrite mineralisation has been intersected in 11 of the new holes. The extensive conductivity anomaly at the Railway Prospect, located 3.5 kilometres from Big Hill Deposit, clearly reflects underlying cobalt mineralisation and nine drill holes in this area have intersected zones of cobaltiferous pyrite. Samples from the Railway Prospect drill include; 50 metres of 2.63 pounds per tonne cobalt in the top part of BER004 (4090m) including high grade zones of over 4lb/t Co; High cobalt grades with elevated zinc in the lower part of BER004 (e.g. 6 metres of 2.41lb/t Co, 3.51% Zn and 6g/t Ag from 120m). Extensive zones of cobalt mineralisation were intersected 200 metres north of the Big Hill Deposit; 111 metres of 0.98 pounds per tonne cobalt in BER002. A chargeability anomaly at the Offset Prospect is underlain by cobaltiferous pyrite mineralisation; 22 metres of 1.77 pounds per tonne cobalt in BER001. ARBN: Level 14, 52 Phillip Street, Sydney NSW 2000 Box 3486 GPO, Sydney NSW 2001 P: F: E: info@bhpl.biz W: 1

2 Summary BPL s planned 21 hole reverse circulation ( RC ) drill program was commenced during the period and it is now well advanced (Figure 1). The program was designed to test large geophysical anomalies (zones of strongly conductive and chargeable rocks) which extend for more than four kilometres northeast from the Big Hill Cobalt deposit (refer BPL s ASX announcement of 6 December 2011). Geology mapping and sampling has shown that the mineralised zone extends along this NE trend. The current drill work is testing for new deposits of economic, nearsurface cobalt mineralisation which could add to the existing resources at the nearby Pyrite Hill and Big Hill Cobalt deposits which have combined Inferred Resources of 20.8 million tonnes of 1.87 pounds per tonne cobalt ( lb/t Co ) and potential for 1424 million tonnes of similar grade* 1. This mineralisation is close to surface and could be mined by open cut. Thirteen drill holes have been completed (Table 1) and assay results have been received for the first five (BER0015) and the top portion of BER006 (0157m). A summary of these results is listed in Table 2. Comments on Drillholes BER001 was drilled in the central part of the Offset Prospect where high chargeability results correspond with a prominent low ridge of albitequartz gneiss. The angled hole intersected strong pyritic mineralisation between metres, and this averaged 1.77lb/t Co. Highgrade intersections included 5 metres from 119m of 2.47lb/t Co and 5 metres from 128 metres of 2.24lb/t Co. Drilled intersections are close to true thickness. BER002 was located 200 metres north of the Big Hill Cobalt deposit (Figure 1) and intersected mineralisation over most of the hole (111 metres of 0.98lb/t cobalt from 18 metres downhole). Several higher grade intersections occur within this zone (Table 2) and the results clearly show that the cobalt mineralisation at Big Hill is much more extensive than shown by previous work. Geology mapping and surface sampling shows that this mineralisation extends from BER002 to hole BER001, 500 metres along trend to the NE. BER003 was located to test a small gossanous zone midway between the Offset and Railway Prospects, 600 metres to the north of BER001. No significant zones of mineralisation were intersected in BER003. Wide intervals of abundant biotite indicate that the hole may have been drilled close to a fault structure. BER004 was drilled close to the western margin of a mapped zone of albite quartzpyrite gneiss which corresponds to a large cobaltinsoil anomaly (Figure 2) as well as rocks with high chargeability and conductivity (6 December ASX announcement of results of IP geophysics survey). High cobalt values occur in semimassive pyrite (2535% pyrite) and the interval between 4090 metres averaged 2.63lb/t cobalt. Higher grade zones of over six metres occur within this interval (Table 2). Several pyritic intervals with high cobalt contents were intersected deeper in BER004 and these also have high zinc and silver contents (e.g m averages 2.41lb/t Co, 3.51% Zn and 6g/t Ag). The intersections are considered to be close to true thickness as surface outcrops indicate a steep NW dip for the mineralized zones. * 1 This potential lies outside of the Inferred Resource because of the absence of nearby drilling. This target is conceptual in nature and more drilling is required to further define it. There is no certainty that this will result in a Mineral Resource. ARBN: Level 14, 52 Phillip Street, Sydney NSW 2000 Box 3486 GPO, Sydney NSW 2001 P: F: E: info@bhpl.biz W: 2

3 BER005 was located close to the top of a prominent flat ridge about 140m grid east of BER004 and within the central part of the same wide zone of high chargeability and conductivity. BER005 intersected a sequence of quartzalbitepyrite gneiss which contains numerous zones cobaltiferous pyrite (Table 2). Highest cobalt contents occur near the top of BER005 (3339m averaged 2.41lb/t Co). About 100 metres grid east of BER005, BER006 intersected a similar mineralized sequence of pyritic gneiss and included high grade cobalt intervals (Table 2). At the time of this report assays for the bottom part of BER006 had not been completed (157169m), however, the deepest reported assays (148157m) averaged 2.57lb/t Co and this mineralisation is expected to continue for several more metres. BER00710 are located in the southern part of the Railway Prospect (Figure 2). BER007 and BER009 both intersected wide zones of massive and disseminated pyrite. BER011 was drilled from a collar located about 30 metres to the west of the old Hunter Resources drillhole (T98C01) in the central part of the Railway Prospect and about 250 metres north of BER005. BER011 intersected massive and disseminated pyrite in gneissic rocks and is expected to return wide zones of cobalt mineralisation. BER012 and BER013 are located about 220 metres north of BER011. Both drill holes intersected wide zones of massive pyrite (>50m). Planned Work Completed assays of samples from drill holes BER00613 are expected during the next several weeks. The remaining eight planned drill holes of the current programme are expected to be completed in mid May. At least two more holes are planned in the northern part of the Railway Prospect and several more will test the strike continuity and down dip extent of massive cobaltiferous pyrite intersected along the western side of the Railway Prospect (BER009, 4, 11, 12 and 13). During the next quarterly period results of drilling will be assessed and scoping studies including engineering, metallurgical and commercial work will be commenced. Between 2023 May Broken Hill Prospecting will be in attendance at the Resources and Energy Symposium 2012 at Broken Hill ( BPL will have an information booth and present an update on our recent drill work and results. Yours faithfully, Ian J Pringle (Managing Director) ARBN: Level 14, 52 Phillip Street, Sydney NSW 2000 Box 3486 GPO, Sydney NSW 2001 P: F: E: info@bhpl.biz W: 3

4 Competent Person Statement The 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 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 mineralisation 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. About ( BPL ) BPL is seeking to explore, evaluate and develop cobalt deposits in the Broken Hill area. Within two mining leases (ML86 and ML87) BPL has cobalt mineral resources (Inferred Resources) which total 20.8 million tonnes at a combined average grade of 1.87lb/tonne cobalt (Pyrite Hill and Big Hill deposits) as well as potential mineralisation between 1424Mt of similar grade at the Pyrite Hill Deposit (Hellman & Schofield resources study, November 2011). Exploration for additional cobalt mineralisation alongtrend and at depth beneath these deposits is in progress. These are a unique type of cobalt deposit and BPL is in an excellent position to take advantage of an increasing demand for cobalt to meet growth in environmental and industrial uses such as rechargeable batteries in automobiles. BPL is among the next generation of companies that is exploring for major new mineral deposits near the historic NSW mining centre of Broken Hill, where more than 200 million tonnes of highgrade base metal ore worth an estimated $80 billion has been produced during the past 127 years. BPL has identified 13 Broken Hilltype base metal prospects in its exploration tenements. BPL raised $4.47 million in an initial public offering in February 2011and BPL securities are quoted on both the Australian and New Zealand stock exchanges. Cobalt Statistics Cobalt price (LME): US$31,000 per tonne ($1415 per pound). 1 pound = kilograms Mines in Central Africa accounted for over 65% of cobalt production in 2011 and most came from the Democratic Republic of Congo. The USA accounted for 58% of cobalt consumption in The USA, Japan, European Union and China have no producing cobalt mines. China imported ore from Africa and produced 43% of refined cobalt production in More than 95% of cobalt production is a byproduct of copper or nickel mining. World production of refined cobalt during the first six months of 2011 was 40,749 tonnes (The Cobalt Institute, October 2011 Newsletter) Lithiumion batteries contain 60% cobalt and will be widely used in the new generation of electric vehicles. Cobalt is used in a wide range of industries including production of; super alloys and hardened metals where high heat and wear tolerance is required (aircraft, turbines, windmills, military hardware), highstrength magnets, carbides and diamond tools, catalysts (petroleum production), colouring (cobalt blue), adhesive, soaps, driers and food supplements (vitamin B12). For further information contact; Dr Ian Pringle, Managing Director, Broken Hill Prospecting Ltd Australian media Alan Deans, Partner, Last Word Corporate Communications The Company has recently reformatted and updated its website which covers or links to recent news, metal prices, share price as well as project and Company information. Please visit our site at ARBN: Level 14, 52 Phillip Street, Sydney NSW 2000 Box 3486 GPO, Sydney NSW 2001 P: F: E: info@bhpl.biz W: 4

5 Hole* Table 1. Drill hole collar information. Hole depth Easting EMGA94 Northing NMGA94 Drill hole direction AzMag Drill hole dip BER BER BER BER BER BER BER BER BER BER BER BER BER013 In progress * All holes were completed by Macquarie Drilling using a 450 Schramm drill rig with a 900x350 air compressor and 1800cfm booster Table 2. Summary assay data for drill holes BER0016 hole number from to interval * cobalt (average grade**) cobalt (average grade) Ni S Fe pyrite (calc 4 *) Co in pyrite (calc 5 *) metres metres metres g/t lb/t *** g/t % % % % BER including BER including ARBN: Level 14, 52 Phillip Street, Sydney NSW 2000 Box 3486 GPO, Sydney NSW 2001 P: F: E: info@bhpl.biz W: 5

6 (Table2 continued) BER003 no significant assays BER including % Zn, 15g/t Ag % Zn, 6g/t Ag BER BER * Notes: Samples were collected for each metre using a cyclone splitter, control samples including blanks, duplicates and international standards were inserted for quality control. * drilled interval, only approximate thickness ** average of assays (>500g/t Co) of one metre sample intervals by ALS Chemex (method ME ICP61) *** 1 kilogram is equivalent to pounds 4 * Calculated pyrite content of the sample assumes that all sulphur is contained in pyrite. 5 * Calculated cobalt content of the pyrite assumes that all cobalt is contained in pyrite. 6* Assay data for samples below 157 metres in BER006 have not been completed. ARBN: Level 14, 52 Phillip Street, Sydney NSW 2000 Box 3486 GPO, Sydney NSW 2001 P: F: E: info@bhpl.biz W: 6

7 NORTH EAST EXTENSION TC98CO1 (Hunter Resources); 19m of 1.5lb/t Co 35m of 2.1lb/t Co RAILWAY PROSPECT PYRITE HILL Inferred Resource of 16.4Mt at 1.83lb/t Co (plus 14 24Mt potential) (refer Figure 2) OFFSET & BIG HILL NORTH PROSPECTS BER001 BER002 April 2012 drilling RC hole BER001; 22m of 1.77lb/t Co BER002; 111m of 1.0lb/t Co (incl 7m of 2.34lb/t Co & 10m of 2.0lb/t Co) BIG HILL Inferred Resource of 4.4Mt at 2.00lb/t Co (open to NE & depth) Figure 1. Geology map with cobalt resource locations and drill areas

8 LEGEND cover gossan (quartz albite pyrite gneiss) Gneiss, schist, amphibolite Cobalt in soil, 50ppm contour Hunter RC drill hole, 1998 Completed drill hole Planned drill hole BER013 BER012 not mapped BER004 BER011 BER005 BER006 Hunter Resources hole T98CO1 intersected 19m of 1.5lb/t Co and 35m of 2.1lb/t Co not mapped BER010 BER009 BER003 BER008 BER007 Mineralised intervals assays not yet received BER006; m BER007; 29 39m, 41 80m, BER008; 40 42m BER009; 32 47m, 57 68m, 74 81m, m BER011; 31 36m, 39 52m, 55 61m, m, m BER012; 28 81m BER013; 23 30m, 34 42m After Hunter Resources, 1998 Figure 13A 2. Geological map of the Railway Prospect showing locations of April 2012 RC drill holes (all drilled at about 60 degree dip towards grid SE, see Table 1)

9 Appendix 5B Mining exploration entity quarterly report Appendix 5B Rule 5.3 Mining exploration entity quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10 Name of entity ABN Quarter ended ( current quarter ) st March 2012 Consolidated statement of cash flows Cash flows related to operating activities Current quarter Year to date ( 9 months) 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration (37) (111) (525) (651) 1.3 Dividends received 1.4 Interest and other items of a similar nature received Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows (147) (1,152) Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets (2) (24) 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows (2) (24) 1.13 Total operating and investing cash flows (carried forward) (149) (1,176) + See chapter 19 for defined terms. Appendix 5B Page 1

10 Appendix 5B Mining exploration entity quarterly report 1.13 Total operating and investing cash flows (brought forward) (149) (1,176) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows Net increase (decrease) in cash held (149) (1,176) 1.20 Cash at beginning of quarter/year to date 2,214 3, Exchange rate adjustments to item Cash at end of quarter 2,065 2,065 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current quarter 1.23 Aggregate amount of payments to the parties included in item Aggregate amount of loans to the parties included in item Explanation necessary for an understanding of the transactions Directors fees $40 Management fees to related entities $45 Marketing, promotion, website maintenance $ 1 Noncash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows n/a 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest n/a + See chapter 19 for defined terms. Appendix 5B Page 2

11 Appendix 5B Mining exploration entity quarterly report Financing facilities available Add notes as necessary for an understanding of the position. Amount available Amount used 3.1 Loan facilities 3.2 Credit standby arrangements Estimated cash outflows for next quarter 4.1 Exploration and evaluation Development 4.3 Production 4.4 Administration 240 Total 640 Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current quarter Previous quarter 5.1 Cash on hand and at bank Deposits at call Bank overdraft Other (provide details) 5.4 Term Deposits 2,000 2,000 Total: cash at end of quarter (item 1.22) 2,065 2,214 Changes in interests in mining tenements 6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased Tenement reference Nature of interest (note (2)) Interest at beginning of quarter Interest at end of quarter + See chapter 19 for defined terms. Appendix 5B Page 3

12 Appendix 5B Mining exploration entity quarterly report Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates. Total number Number quoted Issue price per security (see note 3) (cents) Amount paid up per security (see note 3) (cents) 7.1 Preference + securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemptions Ordinary securities 82,581,900 29,257,011 n/a n/a 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options (description and conversion factor) 1,500,000 11,190,950 29,650,000 Nil 11,190,950 Nil Exercise price 24c 20c 20c Expiry date 17/2/ /2/ /2/ Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter 7.11 Debentures (totals only) + See chapter 19 for defined terms. Appendix 5B Page 4

13 Appendix 5B Mining exploration entity quarterly report 7.12 Unsecured notes (totals only) Compliance statement 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5). 2 This statement does give a true and fair view of the matters disclosed. 27/04/2012 Sign here:... Date:... (Company secretary) Print name:.donald de Boer... Notes 1 The quarterly report provides a basis for informing the market how the entity s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report. 2 The Nature of interest (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. == == == == == + See chapter 19 for defined terms. Appendix 5B Page 5