Coolabah Metals (ASX:BHM) has exercised the option under its heads of agreement with Pinnacles Mines and Broken Hill Pinnacles to formally enter into the binding joint venture deal for mining operations at the Pinnacles Mine in New South Wales.
Soon-to-be-renamed Broken Hill Mines, Coolabah Metals exercised the option via payment of the second option fee of $600,000.
Under the terms of the head of agreement, Broken Hill Mines will become the exclusive operator of the Pinnacles Mine, with mined ore to be transported and processed at the Rasp Mine processing plant, located 15km away.
Profits from operations at the Pinnacles Mine are shared about 70% BHM) and 30% Pinnacles via an agreed net smelter return calculation with applicable deductions.
Both Broken Hill Mines and Pinnacles are now actively progressing a standard operating agreement to fully document the future mining operations at the Pinnacles Mine.
Write to Adam Orlando at Mining.com.au
Images: Coolabah
