Broken Hill to offer another mining option

Investors will have another mining stock to consider next week, with the dual listing of Broken Hill Prospecting Ltd on Wednesday, which raised $A4.5 million ($NZ5.9 million) during its initial public offering.

Broken Hill has cobalt and base mineral interests, including copper, lead and zinc, in tenements near Broken Hill, in New South Wales, and is looking to accelerate its exploration and development in those areas.

Dual-listed Heritage Gold, which managed Broken Hill's exploration, has retained a 21.7% interest in Broken Hill, according to Heritage chief executive Peter Atkinson, also a director of Broken Hill.

He said Broken Hill hosted the richest silver/lead/zinc ore body of its type anywhere in the world. It has produced 200 million tonnes of ore, valued at more than $A80 million, during the past 120 years.

A 12-hole follow-up drilling programme has been disrupted in recent days by heavy rain and initial results of testing for mineralisation to a depth of 100m are now expected in early March, Mr Atkinson said in a market statement.

Explorer Heritage Gold has for several years held gold tenements in New Zealand, atKarangahake and Golden Valley, near Waihi in the Coromandel. Discussions are under way for a joint venture for mine development.

• Listed southern coal-bed methane gas explorer L&M Energy has spent $1.1 million in mainly exploration costs during the quarter to December, but retains $8.75 million for its work programmes this year.

During the quarter, drilling began at its Ohai coal seam gas pilot, where its estimated resource was upgraded 60% to 274 petajoules.

Production is on track to begin by March, LME managing director Kent Anson said in a market statement recently.

"Once drilling is completed, well surface and subsurface production equipment will be installed with production scheduled to commence early March," he said.

While booking a $9.7 million loss for the six months to June, LME went on to underpin its 2011 operations by raising $10 million in new capital.

The company was investigating whether the pilot gas production could be turned to power generation and linked into a nearby electricity grid to boost cash flows, Mr Anson said.

During the quarter, LME was awarded a third permit onshore in Taranaki, where it holds a 25% interest and Australian-based Mosaic Oil NZ Limited 75%. The partners hoping to define a drilling target by the end of the year.

 

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