Broken Hill Prospecting (ASX:BPL) managing director Trangie Johnston updates Proactive Investors on the company's acquisition of the advanced La Paz Rare Earth project in Arizona, USA. The managing director said the company had made a strategic move to keep up with market demand as US-China trade talks continued to heat up and impact the rare earth space.

Highlights

  • BPL to acquire the advanced La Paz Rare Earth project in Arizona, US

  • An independent NI 43-101 Report and Resource estimate was completed in 2011

  • La Paz is a large tonnage, bulk deposit comprising high value, light rare earth (LREE) assemblage

  • Potential to be the largest rare earth project in North America

  • Initial metallurgical test work demonstrates favourable separation of high value, LRRE-rich allanite

  • Laz Paz contains very low penalty elements such as radioactive thorium and uranium

  • Excellent local infrastructure - electricity, water, gas - in a mining friendly jurisdiction

La Paz Rare Earth Project Acquisition

BPL is pleased to announce that it has formed a 100%-owned US-based subsidiary called La Paz Rare Earth LLC to acquire and develop the La Paz Rare Earth Project. The La Paz Rare Earth project is located in La Paz County, Arizona, US. The project lies approximately 170 km north- west of Phoenix (Figure 1).

La Paz Rare Earth LLC has staked more than 890 hectares comprising 107 unpatented lode mining claims on federally controlled land and a prospecting permit over one section of Arizona State Trust land (259 hectares). The tenements are unencumbered and will be 100% controlled by La Paz Rare Earth LLC.

Location notices for the lode mining claims have beenfiled with the Bureau of Land Management (BLM) and theprospecting permit application is in progress at the State of Arizona Land Department, with approval expected in coming weeks.

“This expansion of our strategic metals portfolio into rare earths comes soon after announcing the rare earths potential in our extensive Murray Basin mineral sands tenements in Australia.

La Paz offers a unique opportunity for shareholders for exposure to the US rare earths market, where security of supply is critical because of rising global trade tensions.

After its discovery in 2010, a significant amount of technical workwas completed at La Paz. A NI 43-101 Report was produced in 2011, supported by a substantial maintain resource estimate and preliminary metallurgical test work.

The potential scale of this project, in a mining friendly environmental jurisdiction close to world class infrastructure, means that the Board is focussed on quickly advancing work at La Paz. On-ground work is expected to commence within months”

TRANGIE JOHNSTON - CEO

View looking west across the La Paz rare earth project area

View looking west across the La Paz rare earth project area

About the La Paz Project

The La Paz area was first shown to contain rare earthelements during exploration sampling programs in mid-2010. The area is located in western-central Arizona within the structural Detachment Fault Domain of the large Basin-RangeProvince. Mineralisation is defined by structurally controlledzones containing both pervasive epidote and epidote veinlets in micro-fractures, dominantly hosted within a foliated to brecciated quartz-feldspar granitic gneiss. Allanite, a variety of epidote, is the principal rare earth-hosting mineral.

During 2011, Australian American Mining Corporation Ltd drilled 195 percussion holes for 5,120 metres, which supported a maiden resource estimate under independent NI 43-101 guidelines. The resource displays relatively uniform distribution of total rare earth elements (TRRE) across and along strike covering a resource area 2.5 km by 1.5km. The entire deposit is exposed at surface, or lightly concealed by alluvial cover. It is open at depth and is currently defined to 30m below surface (Figure 2).

Composite and selected interval samples were submitted to leading independent groups at SGS Canada Inc (Vancouver) for mineralogical investigations (QEMSCAN, XRD and Electron Microprobe analysis) and the Saskatchewan Research Council (SRC, Saskatoon) for preliminary metallurgical test work (pre-concentration and leaching).

The maiden resource estimate and preliminary metallurgical test work formed the basis of an independent NI 43-101 report completed late 2011. Additional metallurgical test work was completed in early 2012.

BPL is investigating the conversion of the NI 43-101 Report and supporting data to JORC 2012 standards, and will announce further technical and project details once completed.

A copy of the NI 43-101 Report can be found at this link:

La Paz NI 43-101 Report

Figure 1.  La Paz Project - Arizona - USA

Figure 1. La Paz Project - Arizona - USA

Figure 2.  Outline of the area containing the maiden resource estimate reported in 2011 under NI 43-101 guidelines. BPL plans to obtain bulk samples to progress advanced metallurgical studies in coming months and upgrade the resource the JORC 2012 standards.

Figure 2. Outline of the area containing the maiden resource estimate reported in 2011 under NI 43-101 guidelines. BPL plans to obtain bulk samples to progress advanced metallurgical studies in coming months and upgrade the resource the JORC 2012 standards.

Project Highlights Reported under NI 43-101

  • Large tonnage deposit with relatively homogeneous TREO (Total Rare Earth Oxide) distribution amenable to open pit extraction.

  • Excellent infrastructure and skilled work force in a mining friendly jurisdiction. A high voltage power line runs 11km west of the project, and a high pressure natural gas pipe line 8km to the east. Major rivers and aqueducts are within 8km, though local ground water supplies are likely to meet any future production needs.

  • Majority of TREO report to the epidote-group mineral allanite (La-Allanite).

  • High reporting of valuable Light LREO (83%) to Heavy TREO (17%) with extremely low thorium/uranium content with clear environmental advantages.

  • Metallurgical test work successfully concentrated allanite samples via a combined process of gravity, magnetic andflotation separation.

  • Rare earth concentrate was amenable to commercially available leaching technologies, particularly H2SO4 acid roasting - dilute H2SO4 solution leaching.

Location of all title applications lodged over the La Paz rare earth deposit.

Location of all title applications lodged over the La Paz rare earth deposit.

Hand specimen of pervasive epidote (rare earth-rich allanite) mineralisation

Hand specimen of pervasive epidote (rare earth-rich allanite) mineralisation

Trangie Johnston (CEO) and John Petersen (consultant) inspecting outcropping mineralisation at the La Paz project

Trangie Johnston (CEO) and John Petersen (consultant) inspecting outcropping mineralisation at the La Paz project

Future Plans

BPL has a track record of implementing development projects in strategic metals, and the opportunity at La Paz
is another case in point. BPL’s management have been looking to expand the company’s exploration horizons
from principally the Murray Basin/Broken Hill regions but also, to use the expertise and knowledge gained from the successful development of the Thackaringa cobalt project at Broken Hill. Thackaringa is a large low-grade strategic metal deposit with good infrastructure and the La Paz rare earths deposit offers similar opportunities, though with a number of unique strategic properties.

From a US perspective, the search for and development of rare-earth deposits, particularly in the US, has been identified as being strategically essential and thus has strong government support. The US Federal government and Pentagon have published recent articles highlighting the need for domestic supplies of strategic metals including rare earth elements and titanium/zirconium. The current trade and political landscape offers shareholders exposure to growth markets that are seeking to diversify supplies globally.

BPL have been fortunate in that one of its directors has had long exposure and experience with the La Paz project and thus has provided a detailed information base which has allowed us to make a quick decision on the significant potential we can now see which this deposit holds. We are also fortunate in obtaining the services of the key local technical management previously involved in the project allowing BPL to hit the ground running.

Applying the successful techniques that BPL utilised to advance the Thackaringa cobalt project and taking advantage of the expertise and low cost structure utilising North American resources, the Board of BPL believe that this acquisition and development of a resource base in Arizona will transform the company.

Once title applications are completed, our plans will include extensive mapping and re-sampling of bulk samples to progress metallurgical test work in support of technical and commercial project analysis. Additional drilling programs may be required for JORC 2012 conversion to underpin a Scoping Study to Pre-feasibility Study level analysis.