Broken Hill Prospecting Ltd.: Major Strategic Partnership for the Thackaringa Cobalt Project Joint Venture

Sydney - Broken Hill Prospecting Ltd. (ASX:BPL) and Cobalt Blue Holdings Ltd. (ASX:COB) today announced a major strategic partnership with LG International (LGI) involving their Thackaringa Cobalt Project Joint Venture (TJV) near Broken Hill, NSW.

LGI STRATEGIC ALLIANCE

- LGI is the resources investment arm of LG Corporation, and is acting in cooperation with LG Chem.

- LG Chem Ltd has strong technical leadership in the development of next generation batteries in particular for fixed storage and electric vehicles (EVs). LG Chem is the fourth largest EV battery maker globally.

- Under our partnership, LGI will provide capital and technical assistance for the TJV to make a high purity battery grade cobalt sulphate.

- COB has executed a binding term sheet with LGI to raise US$6.0m (at A$1.10 per COB share) by Monday 16 April 2018.

BPL's Managing Director, Trangie Johnston commented:

"The strategic alliance with LGI is a major win for the Thackaringa Cobalt Project and our Board welcomes LGI's partnership. The LG Group brings valuable expertise in product development and other disciplines to the joint venture and is a significant milestone along the road to developing this world class cobalt resource.

BPL's commercial interest in the Thackaringa Cobalt Project is significantly advanced by the involvement of LGI and we look forward to working with both of our partners to deliver the project as expeditiously as possible."

CREATING VALUE FOR BPL'S SHAREHOLDERS

BPL completed a successful spin-off of COB in February 2017, with investors seeking shares and options exceeding the $10 million maximum being offered. The IPO was an important initiative for BPL to realise significant value from its then wholly-owned Thackaringa Cobalt Project.

BPL's shareholders received 35 million COB shares as part of the capital restructuring and distribution, which was equivalent to 37 per cent of the shares issued in COB's IPO. In addition, BPL shareholders received an entitlement to a 1:4 issue of COB bonus options totalling 8.75 million options.

Thanks to the subsequent upgrade of BPL's cobalt interests, the current value of this distribution is approximately $50M based on COB's current share price for those shareholders who retain their COB equity.

COBALT BLUE'S THACKARINGA JV EARN-IN MILESTONES

BPL holds legal title to the Thackaringa tenement leases under the TJV, and COB can earn an interest up to 100% of the Thackaringa Cobalt Project if it completes a four-stage farm-in. It must commit $10.9 million in project expenditure before 30 June 2020, and pay BPL $7.5 million in cash. BPL will be entitled to receive a 2% net smelter royalty on all cobalt produced from the Thackaringa tenements for the life of mine.

Subject to COB completing its TJV Stage 1 milestones, COB has a 51% beneficial interest in the Thackaringa Cobalt Project with BPL retaining a 49% beneficial interest. For COB to retain its 51% beneficial interest, key deliverables by 1 April 2018 are a 40Mt Indicated Resource sufficient to support a Pre-feasibility Study to JORC 2012 standard and certain expenditure obligations. A Pre-feasibility Study to JORC 2012 standard is due by 30 June 2018, which forms part of TJV Stage 2 milestones for COB to earn up to a 70% beneficial interest.

ABOUT LG INTERNATIONAL

LG International executes resources investment strategy for the LG Group. Historically, LG International has specialised in global mining investment and operations.

LG International has now extended its focus to include 'Green Minerals', the raw materials of lithium-ion battery construction such as cobalt, nickel and lithium. LG International operates in close cooperation with LG Chem to secure Green Minerals for the LG Group.

ABOUT LG CHEM (KRX:051910)

LG Chem Ltd is Korea's largest diversified chemical company. It operates three main business units: Petrochemicals, IT & Electronic Materials and Energy Solutions. The company was founded in 1947 and now employs over 29,000 staff globally. The chemical business manufactures a wide range of products, from petrochemical goods to high-value added plastics. It also extends its chemical expertise into high-tech areas such as electronic materials and lithium ion batteries. With over 20 years' experience of development and production of these batteries LG Chem is established as one of the world's leading Lithium-ion manufacturers. The company is a primary supplier of lithium batteries throughout the world, for the mobile phone and hybrid/electric vehicle industries and Energy Storage System (ESS).

About Broken Hill Prospecting Ltd:

Broken Hill Prospecting Ltd. (ASX:BPL) is an Australian exploration company focussed on the discovery and development of strategic mineral resources across two primary geographical areas; the Murray Basin Region (Heavy Mineral Sands) and the Broken Hill Region (industrial, base and precious metals, including the Thackaringa Cobalt & Base/Precious Metal Project).



Contact:

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