Broken Hill Mines (ASX: BHM) has entered into a mining and processing co-operation agreement with Kingfisher Mining (ASX: KFM) involving Kingfisher’s high-grade Broken Hill tenements in New South Wales
The 10-year agreement establishes the framework for ore from the 400-square-kilometre portfolio to be mined and processed exclusively at Broken Hill Mines’ wholly owned processing plant at the Rasp silver-lead-zinc mine, which has a capacity of 750,000 tonnes per annum.
The plant provides a ready-made pathway for Kingfisher’s mineralisation to reach the market, while allowing the company to bypass the significant capital expenditure and multi-year timelines required to build its own standalone infrastructure.
Kingfisher will initially focus on its advanced Allendale (silver-lead-zinc) and Copper Blow (iron-oxide-copper-gold) projects that host drill-ready targets identified and demonstrate the potential for high-grade mineralisation proximal to the Rasp plant.
Capital Structure Intact
The Broken Hill agreement preserves Kingfisher’s capital structure and ensures the company can direct maximum funding into active drilling and resource definition activities, providing a clear and low-cost framework to transition from discovery to operational cash flow.
It means that smaller, high-grade deposits which could not typically support the capital cost of a dedicated mill may become highly-attractive prospects when treated as satellite feed for the Rasp mine.
Broken Hill Mines’ regional mining and processing capacity, skilled workforce, logistics networks, and proven metallurgical and marketing expertise will provide Kingfisher with a strategic option to shorten the timeline from discovery to production and revenue.
The Copper Blow project is held under a joint venture agreement in which Kingfisher has a 75% interest and Broken Hill Mines 25%.
The two companies also hold multiple silver-lead-zinc prospects in various combinations of ownership structure at West Broken Hill.
Close Proximity to Rasp
Broken Hill Mines chair Patrick Walta said the partnership represents “an excellent opportunity for delineation of significant mineralisation located in close proximity to BHM’s Rasp mine processing plant.”
“The agreement […] underscores the strategic nature of BHM’s operating infrastructure, with consolidation of KFM’s tenure providing a simple ‘win-win’ scenario for both BHM and KFM shareholders and the City of Broken Hill more broadly.”
Kingfisher managing director Chris Bittar said co-operating with an established miner would significantly de-risk the company’s future developments.
“Partnering with Broken Hill Mines provides us with a clear and credible pathway to production—accessing the Rasp plant eliminates one of the biggest hurdles for junior explorers—infrastructure capital,” he said.
“It allows KFM to focus its funding on active drilling and resource definition, while making even our smaller targets economically viable by removing the need for a standalone plant—this provides us with the option to reach a cashflow-positive position much sooner than would otherwise be possible.”
