Broken Hill Prospecting Ltd.: Dispute Settled and Heavy Mineral Sands Expansion Plans Accelerate

Sydney - Broken Hill Prospecting Ltd. (ASX:BPL) announced the legal dispute with Relentless Resources (RRL) is resolved and Heavy Mineral Sands (HMS) expansion plans accelerate with funding sufficient for new project review and acquisition.

Highlights:

- Legal dispute with Relentless Resources (RRL) is resolved

- RRL agrees to pay BPL $3.1M within 90 days, significantly boosting BPL's cash

- BPL agrees to transfer 100% of ELs 8308, 8309, 8310, 8311, 8312, 8385, 8560 and ELA 5513 to RRL

- BPL retains ELs 8558 and 8559 covering prospective strandlines in the Central Para and Tararra leases

- Maiden Resource estimates for the Gilligans and Jaws strandlines (EL 8559) are expected in July

- HMS expansion plans accelerate with two new tenement applications submitted

- BPL aims to establish a chain of high grade, low tonnage deposits across the world class Murray Basin, ideal for processing with mobile plant technology

- Market confidence improving after Zircon and Titanium pigment price increases in past 12 months

- Settlement of the dispute provides a platform for expansion of current mineral sands initiatives and also a review and new acquisition programme

Trangie Johnston commented:

"The expansion of BPL's tenement portfolio is based on an extensive, proprietary data compilation and prospectivity analysis within the Murray Basin's world-class Heavy Mineral Sands province.

Recently granted tenements contain high value mineralised strandlines that will support resource estimates, without the need to conduct field activities. Our immediate aim remains, as before, to define combined Mineral Resources of 100Mt in shallow, high-grade deposits."

Settlement of the dispute enables BPL to achieve two critical outcomes:

It lets us get on with the job of developing our Murray Basin HMS strategy and provides significant funds to advance our field program in coming months, in new prospective areas.

We retain title to some of the most prospective ground available within the Murray Basin while we continue to assess additional areas for expansion. BPL is strategically placed to take advantage of improving HMS market conditions.

BPL is continuing to reshape its HMS portfolio with the goal of becoming a significant HMS producer. In addition however, settlement of the dispute provides a capital bank that will, in part, be directed towards assessment of new mineral exploration and development opportunities."

LEGAL DISPUTE WITH RELENTLESS RESOURCES RESOLVED

Following is a summary of the agreed terms and conditions by BPL and RRL:

1. Subject to approval under the Mining Act 1992 (NSW) (Act) to the relevant transfer of tenements, RRL will acquire:

1.1. Broken Hill Minerals (BHM)(see Note 1) entire interest in tenements EL 8308, EL 8309 and EL 8310 for $500,000 payable by 10 July 2017

1.2. Murray Basin Minerals (MBM)(see Note 2) entire interest in tenements EL 8560 and ELA 5513 for $250,000 payable by 10 July 2017

1.3. BHM's 50% Participating Interest in the Farm-in and Joint Venture Agreement between BHM and RRL, covering EL 8311, 8312 and EL 8385 for $3,150,000 (of which RRL will retain the sum of $800,000 in respect of the fees required to complete the Feasibility Study referred to in the Joint Venture Agreement) payable within 90 days of 26 June 2017

2. BHM indemnifies RRL for any third party claims arising from the Joint Venture Agreement which are known to BHM and RRL as at 26 June 2017

3. The BPL Group will not apply for any tenements under the Act within a 100km radius of EL 8309 (excluding South Australia)

4. BHM and RRL will discontinue, with no orders as to costs, their proceedings in the Supreme Court of New South Wales

5. RRL will withdraw caveats placed over EL 8558 and EL 8559 issued under the Act

HMS EXPANSION PLANS ACCELERATED

The expansion of BPL's interests in the Murray Basin is the result of extensive data compilation and prospectivity analysis undertaken in recent months by BPL's expanded exploration and management team. This analysis of publicly available data has equipped BPL with a unique proprietary database comprising approximately 15,000 drill holes and 665,000 metres of drilling. The database reflects a total exploration replacement value of approximately $20 million (drilling and assay only) in today's terms.

Two new tenement applications were recently submitted located approximately 20km to the south east of EL 8559 (see Figure 1 in the link below). Highly prospective targets will form part of accelerated drilling programs in H2 2017.

Ongoing data analysis is currently being directed at the western and southern sectors of the Murray Basin. In addition, BPL is conducting due diligence on a number of advanced projects with the aim to expand our HMS portfolio.

PENDING RESOURCE ESTIMATES

Detailed assessment of the new tenement areas has indicated existing drilling will support Mineral Resource estimation with modelling currently focussed on two priority targets:

- Jaws (EL8559): The Jaws strand is characterised by a shallow, well-developed foreshore horizon comprising medium - coarse mineral sands persistent over some 17km strike. The strand is approximately 200m wide and 6m thick with cover between 9 - 39m.

- Gilligans (EL8559): The Gilligans strand contains extensive mineralisation occurring up to 350m wide and over 15km of strike. Overburden is variable though averages 22m shallowing at the peripheries.

The above strandline targets all occur within a radius of 20km (see Figure 1 in the link below), supporting the Company's exploration and project development strategy; targeting the establishment of a sustainable pipeline of high grade, low tonnage deposits amendable to processing through mobile plant equipment.

NEW ACQUISITIONS PROGRAMME

Settlement of the dispute has provided BPL with a significant capital bank. The Board will now initiate a project review process, seeking to identify value adding acquisitions in the precious and base metal sector, focussing on (but not limited) to Australia in the first instance. This initiative will run parallel to and not hinder the Company's mineral sands activities. A diversification of commodity exposure is considered prudent; developments will be reported in due course.

SUMMARY

BPL is well funded to accelerate expansion plans within the Murray Basin, with planning for extensive drilling campaigns in H2 2017 on mineral sands prospects within the new tenements. The immediate aim is to define combined Mineral Resources of 100Mt in shallow, high grade deposits.

BPL's strategy is to investigate the feasibility of mining these resources using dry mining techniques and mobile treatment plants. Multiple operations could be feasible if sufficient resources are identified in different locations. The Company's ability to undertake this work is enhanced by the knowledge gained in recent years on BPL's other projects in the Murray Basin.

The market outlook for HMS, including zircon and titanium dioxide, shows signs of improving. While some prices remain low, producers have been matching production to demand, reducing stockpiles and shutting operations to better match supply and demand. Titanium dioxide prices have increased since 2015, and that trend is expected to continue. The zircon market has remained steady with recent price increases announcement by Iluka.

The Company's mineral sands projects, combined with it's base metal rights at the Thackaringa Project (Joint Venture with Cobalt Blue Ltd (ASX:COB)) and it's new precious and base metal review and acquisition programme provide an exceptional base for future success.

Note 1: Broken Hill Minerals Pty Ltd, BPL's wholly owned subsidiary.
Note 2: Murray Basin Minerals Pty Ltd, BPL's wholly owned subsidiary.

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About Broken Hill Prospecting Ltd:

Broken Hill Prospecting Ltd. (ASX:BPL) is focused on the development of strategic technology mineral resources: Cobalt and Heavy Mineral Sands (HMS). The Thackaringa Cobalt Project is potentially a world class deposit, well positioned to met the growing demand for Lithium-ion batteries. The Murray Basin HMS Project is targeting the establishment of a sustainable pipeline of high grade, low tonnage deposits (titanium and zirconium) amenable to processing through mobile mining unit technology.



Contact:

Broken Hill Prospecting Ltd.
T: +61-2-9238-1170
E: info@bhpl.biz
www.bhpl.biz