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Kingfisher Mining (ASX:KFM) has moved to take advantage of existing, nearby processing capacity by signing an agreement with Broken Hill Mines.
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The two have entered into a mining and processing co-operation agreement, which outlines the framework for ore from Kingfisher’s high-grade Broken Hill portfolio to be mined and processed exclusively by Broken Hill Mines at its 100% owned 750,000 tonnes per annum capacity Rasp mine plant.
Kingfisher managing director, Chris Bittar, said the ability to access the existing Rasp processing facilities bypasses the significant capital expenditure and multi-year timelines required to build standalone infrastructure.
“This agreement with Broken Hill Mines is a major milestone for Kingfisher. Partnering with BHM provides KFM with a clear and credible pathway to production. Accessing the Rasp processing 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.”
A significant portion of KFM’s prospective tenure is held in a joint venture with BHM. Broken Hill Mines executive chairman, Patrick Walta, said the collaboration furthers his company’s partnership with Kingfisher in the Broken Hill region.
“It represents an excellent opportunity for delineation of significant mineralisation located in close proximity to BHM’s Rasp mine processing plant,” Mr Walta said.
“The agreement provides a clear and logical commercial arrangement to progress development of this mineralisation via a low capital pathway. It also 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.”
Mr Bittar added that through the use of the Rasp plant, smaller or satellite deposits of Kingfisher that were previously considered uneconomic can now be prioritised as potential production opportunities.
KFM’s priority targets include the high-grade Copper Blow IOCG prospect (75% KFM: 25% BHM) and the Allendale lead, zinc and silver projects, within 40km of BHM’s established infrastructure in Broken Hill.
KFM is down -1.27% to 7.8¢. Mkt cap $8.221M.
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