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Broken Hill Prospecting shares run higher on Thackaringa cobalt resource upgrade, up 39%

Published: 00:15 19 Mar 2018 GMT

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61,500 tonnes of cobalt at the spot price of US$88,000 equates to over US$5.4 billion

Broken Hill Prospecting Ltd (ASX:BPL) shares have jumped today after a resource upgrade at the Thackaringa Cobalt Project near Broken Hill in New South Wales.

The upgrade comprises a 31% increase in total tonnes and a 23% increase in contained cobalt to 61,500 tonnes.

Significantly, using current cobalt prices of US$88,000 per tonne, this cobalt deposit has a gross sale value of over US$5.4 billion.

Improved confidence with 72% of the resource in the Indicated category

The global JORC resource estimate is now 72 million tonnes at 852 ppm cobalt, 9.3% sulphur and 10% iron for 61.500 tonnes of contained cobalt at a 500 ppm cobalt cut-off.

The upgrade comprises a 31% increase in total tonnes and a 23% increase in contained cobalt compared with the June 2017 JORC estimate.

This represents a major step forward in the project’s viability with 72% of the updated resource classified as Indicated, which reflects improved geological confidence.

READ: Broken Hill Prospecting readies aggressive growth and value-adding strategy in 2018

Trangie Johnston, managing director, said: “This resource upgrade comes at a time when cobalt prices have been experiencing large gains on world markets, hitting $US88,000 per tonne last week.

“Both the increase in the cobalt resource size at Thackaringa and the cobalt price combine to make this a valuable and strategic development of global magnitude.

“It adds significantly to BPL’s assets both in terms of our ongoing participation in the JV and the increased potential for future royalty steams.

“The prospectivity of our Broken Hill leases has been also enhanced by the recent exploration success in identifying further occurrences of Broken Hill style mineralisation.”

Cobalt Blue joint venture continues to prove a major success

Thackaringa is held in joint venture between BPL and Cobalt Blue Holdings Ltd (ASX:COB).

The joint venture has been a major success for BPL, whose goal it has been to unlock the value of the project over the last few years.

BPL was able to identify the market opportunity and elected to spin-out and IPO Cobalt Blue.

As a result, BPL shareholders have and continue to see the benefits of the corporate restructure and how Cobalt Blue advanced the asset.

More value-add milestones upcoming for Thackaringa

BPL expects to see more major upgrades in terms of visibility of this project in the near-term.

Over the next few months, the pre-feasibility study (PFS) is expected to be complete.

Significantly, this will provide the first look at forecast economics for the project.

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