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Copi North HMS deposit Scoping Study
The first step along a pipeline of high-grade
zircon/rutile/ilmenite deposits in western NSW
Presented to the 16th Mineral Sands Conference, 15 – 16 March 2016, Rendezvous Grand Hotel, Melbourne
Dr Ian Pringle (Broken Hill Prospecting Limited, 0408 548767, ipringle@bhpl.biz)Broken Hill Minerals Pty Ltd - Relentless Resources Limited JV
Cautionary Statement
The Scoping Study referred to in this report is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide
assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.
Competent Person Statement
Exploration activities and sampling results contained in this notice are based on information compiled by Mr Ian Spence, Managing Director of Broken Hill Minerals Pty Ltd and
reviewed by Dr Ian Pringle who is 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 2012 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.
The information in this report that relates to Mineral Resources for the Copi North HMS Deposit is based on information reviewed by Sue Border, a Competent Person who is a Member
of The Australasian Institute of Mining and Metallurgy. Sue Border has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to
the exploration activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Sue Border consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. Sue Border in not
an employee or a related party of the Company or its subsidiaries. Sue Border is a Director/Principal Geologist of Geos Mining.
The information in this report that relates to Mineral Resources for the Magic HMS Deposit is based on information compiled by Mr. Greg Jones who is a Member of The Australasian
Institute of Mining and Metallurgy. Mr. Jones is the Principal for GNJ Consulting and was retained by Broken Hill Prospecting Limited to conduct Mineral Resource estimation for the
Magic deposit. Mr. Jones has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to
qualify as Competent Person as defined in the JORC Code 2012. Mr. Jones consents to the inclusion in this ASX release of the matters based on his information in the form and
context in which it appears.
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 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 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.
Major Regional Project
Figure 1. Map of western NSW showing the location of the Copi North Heavy
Mineral Sands Deposit and other Exploration Leases and deposits held by
Broken Hill Minerals Pty Ltd.
South
Australia
Copi North HMS
Deposit
Silver City
Highway
Woolcunda EL8311
Copi EL8312
Springwood EL8309
Thackaringa cobalt-
pyrite deposit
Ginkgo and
Snapper
HMS mines
(Cristal)
Milkengay EL8310
Base map source:
Federation University
Australia
AL20
Victoria
Coombah
Roadhouse
Figure 1
Location of HMS Exploration Licences (red) 100% Broken Hill Minerals Pty Ltd. EL8311 and EL8312 are in JV with Relentless Resources Ltd. BPL’s Thackaringa Co-pyrite deposits are located 25km SW
of Broken Hill (blue cross).
New South
Wales
Atlas-
Campaspe
HMS project
(Cristal)
Magic HMS Deposit
Sunshine EL8385
Nanya EL8308
Copi North HMS deposit
Drilling and JORC resource - early 2015
Desktop Review (Robbins) - July 2015
Scoping Study (MT) - February 2016
Extension Drilling - March 2016
Magic HMS deposit
Drilling and JORC resource - mid 2015
18 other HMS deposits have been identified in BPL tenements
JV partners sought
Drilling - mid 2016?
BPL (BHM) has the largest ground holding for HMS exploration in the NSW Murray Basin
‘Pipeline’ approach for development of high-grade HMS deposits using a modular, portable plant
Two HMS deposits drill defined in 2015
Table 3: Magic Mineral Resource, August 2015 (2% cut-off grade)
Copi North
Magic
Copi North HMS Deposit Well located
Limited land use
Dry o/c mining
All weather road
70km to Wentworth
Potential for upside NW and SE
extensions
Copi South
Magic
~18 others
Highlights - Copi North HMS Deposit Scoping Study
Shallow, (6-25m cover), free-digging, unconsolidated sands/silts, low clay
Base Case: Waste:Ore ratio 3.6:1, mining an average grade of 9% HMS
1.4Mtpa throughput with an initial 5 year life
Production: ~100,000tpa HM concentrate (zircon-rutile-(leucoxene & ilmenite))
Capital Payback: 30 months
CAPEX excluding contingency: A$21.8m
Net 46 month LOM cash flow after costs: A$45.2m (A$163.6m total revenue)
Drilling to increase resources at western end of Copi North and at Copi South
Sensitivity Analyses: Each year of add-on production could give ~A$12m
to undiscounted net cash flow (EBITDA)
Revenue (A$ million using A$/US$ 0.70):
Zircon (US$1,040/t*) 58.3
Rutile (US$800/t*) 44.8
Leucoxene (US$300-530/t*) 19.9
Ilmenite (US$117/t*) 40.6
Total Revenue 163.6
Costs (A$ million):
Mining - overburden 33.7
Mining – HM 9.3
Processing MMU/WCP/CUP 23.0
Processing MSP 16.0
Site fixed costs 8.4
HMC and MSP tails trucking 6.1
Final product rail freight 10.3
Final product port charges 8.0
Royalties 3.7
Total costs 118.4
Net Operating Cash Flow 45.2
CAPEX (A$ million):
Infrastructure 4.5
Process plant 15.1
Indirect Costs 2.2
Contingency 4.4
Total 26.2 (21.8)
OPEX and CAPEX
Copi North is the first cab off the
rank for a ‘pipeline’ of high-grade
shallow HMS deposits which could
add many years of cash flow.
*2018 price estimate TZMI
Mobile Mining
Unit (MMU)
Flow sheet – Copi North Scoping Study1.4mtpa
Screened at 2mm
Surge bin for feed
to the spiral plant.
Wet Concentrator
Plant (WCP)
Concentrate Upgrade
Plant (CUP)
Mobile Mining Unit (MMU)
ROM ore fed by front-end loader
mounted on a tracksetto enable it be easily moved with the mine face
slurried ore pumped to a wet concentrator plant
Mobile mining unit model
Wet Concentrator Plant (WCP)
MTs’ MG12 spirals (1 pass recoveries)
HM recovery ~87%
Tailings pumped into tailings dam then into the mine void.
Recycled water
HMC slurried and pumped to the Concentrate Upgrade Plant (CUP)
Modular spiral plant model
Concentrate Upgrade Plant (CUP) HMC is slurried/pumped to the CUP
screened at 850 microns
undersize separated using wet magnetic separation
magnetic magnetite and ilmeniteconcentrate (60% recovery), dewatered via cyclone and stacked
non-magnetic is upgraded over a single spiral separator to remove silica and produce a zircon, rutile, and leucoxene product, dewatered via cyclone and stacked
silica and HM gangue are disposed in a small tailings dam
Modular WHIMS plant assembly
Improvements to OPEX through lower fuel prices?
Plant mobility and ‘pipeline’ mining of deposits favours off-grid power
The Scoping Study used a fuel price of A$1.15 per litre and this may
have been conservative and does not include the current Mining rebate
of 38 cents per litre.
Using a lower fuel price could trim off considerable OPEX and as a rule
of thumb … for each 15 cent of lower fuel price;
overburden removal costs will drop by about 6 cents per tonne
ore mining costs will drop about 3 cents per tonne
Copi North west extension (Sunshine), Copi South, Magic, ~18 others ……….
Pipeline of new mine developments
Adding Years of Additional Production (EBITDA)
Source: Mineral Technologies, Copi North Scoping Study
Exchange Rate Sensitivity (EBITDA)
Source: Mineral Technologies, Copi North Scoping Study
Product Price Sensitivity (EBITDA)
Source: Mineral Technologies, Copi North Scoping Study
Drilling to extend resource recently completed
Drilling has extended the
Copi North strand ~3km
further west where
mineralisation becomes
shallow (4-5m of cover) but
grade is slightly lower (visibly
2-5% HM) with similar width
of strand (200-220m).
Geologist John Elliot with drilling crew and sampling team, March 2016
Copi South HMS
deposit (Iluka drill
intersection 8m of
7.5% HM)
Copi North Western Extension showing
completed drill traversesmineralised
low grade/barren
not drilled
Summary of February-March 2016 drilling
Completed assay results expected in mid AprilCopi North HMS deposit
surface footprint
(11.6Mt of 6.9% HM)
A joint venture between Broken Hill Minerals Pty
Ltd (BPL subsidiary) and Relentless Resources NL
4 kilometres
Copi North additional fill-in drilling
( ) to increase resource confidence
Abundant groundwater for processing
Government water bores, located
about 2.5km south of Copi North
could supply process water.
Three bores have strong and
sustained water flows on separate
saline aquifers (16-32m, 226-231m
and 411-423m).
Baseline environmental data collection commenced
The Copi North environmental
recording station is fully operational
and providing important baseline
data.
Flora/fauna/archeology surveys have commenced
“No Aboriginal cultural heritage places were previously
known from the study area and none have been
encountered during our field inspections to date”
Dr Matt Cupper (Landskape)
7 biometric vegetation types
1 threatened ecological community was found in
restricted areas marginal to HMS resource
1 threatened flora species was recorded outside
the study area
Three general fauna habitats recognised
Field surveys identified 47 fauna species
Steve Sass (Environkey)
Steve Sass (Environkey)…. conversing with a local
“Overall – no ‘showstoppers’ for future development”
Rob Corkery (RW Corkery & Co Limited)
Mined head grade assumed 5.5% HM (from Inf Res 15Mt @ 3.7% HM)
Assumed Waste:Ore ratio of 3.0 : 1.0
Pit optimisation has not been run
Assumed same process recoveries for Magic as Copi North
Transport costs to Broken Hill and return (lower) but assumed same
Include A$5 million relocation costs
Adding 2 years of Magic onto the Base Case of Copi North will …..
…. increase undiscounted cash flow by A$11.2m and the DCF by A$6.2m
“Cash flow is very impressive if several years of production are added
from Copi North (west extension) to extend mine life to 7-8 years….
…and then if the plant is relocated to Magic for another 2+ years the
project fundamentals seem outstanding” (John Wyche, AMDAD)
Magic HMS Deposit may give additional value
22
Conceptual timeline
23
Corporate Overview - BHM is a 100% subsidiary of BPL
ShareholdersShares
(m)%
Hill Family Group Pty Ltd 34.3 27.7%
New Talisman Gold Mines Ltd 11.7 9.5%
Top 20 83.6 67.3%
Total shareholders: 551
Directors/Management
Creagh O’Connor AMDr Ian PringleMatt HillDenis GeldardGeoff Hill
Franco GirottoIan SpenceJohn Elliot, Charlie Foster,Wolf Leyh, Rob Barnes
Non-Exec ChairmanManaging DirectorNon-Exec DirectorNon-Exec DirectorNon-Exec Director
Company SecretaryMD - Broken Hill MineralsConsultant/contractorConsultant/contractor
Broken Hill Prospecting LimitedASX Code: BPL
Ordinary Shares on Issue (16/2/16)
124m
Options: Listed 47m
Market Cap (undiluted at 3cps)
$3.7m