Transcript Document 7329711

CONSOLIDATED BROKEN HILL LTD
REVITALISATION OF CENTRAL
BROKEN HILL
August 2001
The Company
• Founded in 1989 and listed on ASX in 1992 as Redfire
Resources N.L.
• Name change in 2001 to Consolidated Broken Hill Ltd
• Current shares on issue ~ 88.5 million
• Shareholders (approximately) ~ 2,400
• Recent share price range 8 - 20 cents
• Approximate cash position (June accounts 2001) $A1.1M
• Listed on the Australian Stock Exchange ASX code CBH
• Top 10 shareholders hold 30.16% of Issued Capital
CBH August 2001
Directors and Management
• Jim Wall – Executive Chairman
– Strong mining and management background
– Previously Managing Director of base metal producers
Savage Resources Ltd & Nicron Resources Ltd
• Bob Besley – Managing Director
– Extensive management and exploration experience.
– Founded the company in 1989
• Ian Plimer – Director
– Specialist on Broken Hill
– Professor of Geology, University of Melbourne
CBH August 2001
Directors and Management
• Robert Willcocks – Director
– Previously Senior Partner of Mallesons Stephen Jacques.
– Resources & commercial specialist
• Peter Jollie – Director
– Former CEO of P&O Containers and an ex President of the
Institute of Chartered Accountants in Australia
– Member of Trade Policy Advisory Committee to Minister for Trade
• Mike Fischer – Project Manager
– Managed mining operations in Africa, Australia & PNG
– Operated Woodcutters Zn-Pb Mine, Australia
CBH August 2001
Project Location
CBH August 2001
History of Broken Hill
 Giant class deposit discovered 1883
 Funded industrialisation of Australia
 Total zinc-lead-silver ore mined ~
200Mt with revenue worth $70b in
today’s terms
 CBH holds central 3.8km
CBH August 2001
Companies built from Broken Hill
CML 7
00m RL
NORTHS
North Open Cut
Browne & Marsh Shafts
Kintore Pit
PASMINCO
No 7 Shaft
CRA
BHP
Delprats Shaft
BROKEN HILL SOUTH
NE
Blackwood Pit
SW
PASMINCO
Main Lode
-1000m RL
2 Kilometres
* after Morland
& Webster 1998
CBH August 2001
Companies built from Broken Hill
CML 7
00m RL
Blackwood Pit
Delprats Shaft
Kintore Pit
No 7 Shaft
~ 54 Million tonnes
* ~34 Million tonnes
North Open Cut
* ~106 Million tonnes
NE
Browne & Marsh Shafts
SW
Main Lode
-1000m RL
2 Kilometres
* after Morland
& Webster 1998
CBH August 2001
Base Metal Provinces
Selwyn Basin
18 Mt Zn
9 Mt Pb
Irish Central Plain
14 Mt Zn
4 Mt Pb
Iberian Pyrite Belt
35 Mt Zn
13 Mt Pb
Aravalit-Delhi
Orogenic Belt
16 Mt Zn
5 Mt Pb
Broken Hill
24 Mt Zn
20 Mt Pb
Tri-State District
14 Mt Zn
4 Mt Pb
Abitibi
Subprovince
17 Mt Zn
~1 Mt Pb
NW Queensland
Mineral Province
45 Mt Zn
24 Mt Pb
CBH August 2001
Consolidated Mining Lease 7 (CML7)
Historical production:
~54Mt @ 6.5% Zn, 12.5% Pb, 280g/t Ag from Main Lode (in white)
N
Western Mineralisation:
2m-40m wide unmined western lode (in yellow) paralleling main lode
CBH August 2001
Resource Base
Current
•
2.5mt @ 10% Pb+Zn – Western Mineralisation
Target
•
>10 yr mining life @ 1mt p.a (>10% Pb+Zn)
Developed from:
Western Mineralisation
Zinc lodes
Centenary Mineralisation
Eastern lode
Remnant main lode
CBH August 2001
General Cross Section
Main
Lode
Current
Resource
Outline
10,200m RL
SEA LEVEL
WESTERN
MINERALISATION
9,800m RL
9,600m RL
9,400m RL
CENTENARY
MINERALISATION
9,200m RL
500 Metres
CBH August 2001
Resource Outline
N
Drill holes along drive
CBH August 2001
CBH Western Mineralisation
Drilling
(May 2001)
Hole
From
(m)
Interval
(m)
Zn
%
Pb
%
Ag
g/t
4001
298
4
3.1
4.4
50
4002
297.3
15.5
6.1
4.3
27
303.4
4
15.9
9.5
50
(including)
.
CBH August 2001
Zinc and Lead Lodes
SW
NE
Zinc lodes
00m RL
North Open Cut
Browne & Marsh Shafts
Blackwood Pit
Delprats Shaft
Kintore Pit
No 7 Shaft
CML 7
Western
Mineralisation
Centenary
Mineralisation
Lead lodes
-1000m RL
2 Kilometres
CBH August 2001
Zinc and Lead Lodes, CML8
No 4 LEVEL
Sea Level
RL 10,000m
No 8 LEVEL
Zinc Lodes
No 12 LEVEL
No 16 LEVEL
Lead Lodes
(Main Lode)
C
Lode
B
Lode
A Lode
Upper
1 Lens
A Lode
Lower
2 Lens
3 Lens
No 20 LEVEL
200 Metres
CBH August 2001
Zinc and Lead Lode Extensions
N
Approximately 1 km
CBH August 2001
Zinc and Lead Lodes, CML7
Diagramatic Illustration of Drilling Results
100m W
00m
100m E
C lode horizon
-300m RL
B lode
-200m RL
EOH
216.3m
Zinc Lodes
Unmined
-100m RL
(Stoped)
EOH
270m
Lead Lodes
100 Metres
CBH August 2001
CBH Zinc Lode
Programme
(April-May 2001)
Hole
From
(m)
Interval
(m)
Zn
%
Pb
%
Ag
g/t
B Lode
5001
133
4.3
23.1
9.2
107
C Lode
5002A
73.2
4.1
10.7
1.7
21
No. 2 Lens
5000
249.1
20.9
7.5
13
87
Drilling results confirm:
 Extension of B & C zinc lodes into CML7
 Presence of unmined lenses of high-grade main lode
CBH August 2001
Exploration Potential
N
 Eastern lode horizon
 Main lode at depth
 Main lode droppers
CBH August 2001
CBH August 2001
Browne
Shaft
Delprat
Shaft
Kintore Pit
BHP Pit
Block 14 Blackwood Pit
Pit
North
Open
Cut
No 7 Shaft
1 Kilometre
Reference
Amphibolite
Lode Zone
Gneiss
Shear Zone
Metasediments
CBH August 2001
Proposed Decline
N
Kintore
Pit
CBH August 2001
Decline Access
Conceptual, not to scale
CBH August 2001
Stage 1 Development
2-Dimensional Diagramatic Representation
STAGE 1
CBH August 2001
Kintore Open Pit
CBH August 2001
N
Concept for Kintore Pit
Haul Road
Portal
Crusher
Truck
Ramp
HMS Plant
CBH August 2001
Heavy Medium Separation
• Tennessee – Savage Resources
• Woodcutters – Nicron Resources
* Preliminary testwork on Western Mineralisation
Head Grade
Sink
Sink Grade
Metal
Recovery
8% Pb+Zn
57.5%
13.4% Pb+Zn
91%
* Metcom Laboratories
S.G. of heavy media: 2.96
Sample ¼ NQ core, diamond drill hole 3230
CBH August 2001
Estimated Project Costs – Stage 1
• Acquisition & Corporate
$ 4.9m
• Infrastructure
$ 5.9m
• Mine Development
$ 6.9m
• Mine Operating
$ 4.6m
• Stage 2 Feasibility
$ 2.0m
Subtotal
• Stage 1 Revenue
Total
$ 24.3m
$ 5.6m
$ 18.7m
CBH August 2001
CML7 Development Plan
Stage 1
Stage 2
Stage 3
>
Kintore decline to upper part of Western Mineralisation Initial stope trial of 120,000t
>
Infill drilling of Western Mineralisation, zinc lodes and
remnant lead lodes
>
Development for sustained 500,000 tpa production from
Western Mineralisation - metal output of 23,000t zinc,
17,000t lead and 560,000oz silver
>
Continued infill drilling of resource targets
>
Expansion into lodes in southern and northern areas of
CML7 via declines from Kintore and Blackwoods pits
respectively
>
Resource upgrade to support expansion to 1 million t.p.a.
CBH August 2001
Expected Project Schedule
• Data Analysis, Drilling
Feb 01 - June 01
• Initial Mining Approval, Equity Funding
May 01 - Sept 01
• Decline Development
Dec 01 - Jun 02
• Stage 1 Production (120,000t)
Jun 02 - Dec 02
• Project Expansion Feasibility & Funding
Jul 02 - Sept 02
• Stage 2 Expansion (500,000tpa)
Feb 03 - Oct 03
CBH August 2001
Broken Hill Tenure
City of
Broken Hill
CML7
Reference
Pospect
Broken Hill orebody
Operating mill
Pasminco tenements
5 Kilometres
CBH August 2001
Pasminco Reserves / Resources
60
50
40
Ore (mt)
30
20
10
0
Jun-99
Production
Reserves
Jun-00
Jun-01 (est)
Resources
CBH August 2001
Reserves by Metal Content
1600
1400
1200
1000
('000 t) 800
600
400
200
0
1999
2000
Zinc
2001 (est)
Lead
CBH August 2001
Zinc & Lead Prices
12 Month Trend
3000
2000
A$/t
1000
0
Oct-00
Dec-00
Feb-01
Zinc
Apr-01
Jun-01 Aug-01
Lead
CBH August 2001
Summary - CML7
• Revisiting major orebody
• Existing drilled resource
• Established infrastructure
• Continuous mining lease
• No land title issues likely
• Low capital entry to production
• Early cash flow projected
CBH August 2001
Expected Timetable
•
Marketing
June - August
•
Prospectus issued
September
•
AIM listing
October
CBH August 2001
CML7 Panorama
CBH August 2001