By:Miningweekly

Coolabah will acquire Broken Hill Mines, which holds agreements to acquire the operating Rasp mine and an option to acquire a 70% profit share joint venture at the Pinnacles mine. The company plans to change its name to Broken Hill Mines Limited.

“This innovative consolidation transaction is the result of extensive due diligence and negotiation, culminating in what is now a significant opportunity to bring Coolabah Metals into production status,” commented chairperson Stephen Woodham.

The Rasp mine has been a consistent cashflow producer for well over a decade, delivering high-quality silver/lead and zinc concentrates globally. The Pinnacles mine, which is currently on care and maintenance, is about 15 km from Broken Hill, and holds potential to be an additional source of high-grade silver, lead and zinc to feed into the currently underused Rasp infrastructure. Rasp's current throughput is about 400 000 t/y, with a plant design capacity of 750 000 t/y.

“Up until now, these Broken Hill assets have been operating as standalone projects. Merging these two assets for the first time in history will create strong synergies that will allow the material extension of mine life and production rates, creating significant operating cost advantages,” he said.

The transaction will also bolster Coolabah's team, adding significant operational and commercial experience in base metals operations. The company is proposing Patrick Walta as executive chairperson, Mark Hine and Brent Walsh as nonexecutive directors, while Woodham will also transition to a nonexecutive director role.

To acquire Broken Hill Mines, Coolabah will offer 125-million shares in the company and 65-million unquoted options. In addition to these securities, the company has agreed to issue further shares to the value of cash generated from July 1, 2024, up to the maximum value of A$5-million.

In addition, a 2% net smelter royalty will be granted to BHM RoyaltyCo.