Coolabah Metals Raises $15M to Acquire Broken Hill Mines and Resume ASX Trading

Strategic Acquisition and Capital Raise

Coolabah Metals Limited, soon to be renamed Broken Hill Mines Limited, has announced a comprehensive capital raising initiative aimed at securing between $15 million and $20 million through a public offer priced at $0.35 per share. This fundraising is pivotal to completing the acquisition of Broken Hill Mines Pty Ltd (BHM), which owns the operating Rasp Mine and holds a significant economic interest in the Pinnacles Mine, both located in the renowned Broken Hill mining district of New South Wales.

The company’s shares have been suspended from trading since August 2024, pending this strategic transaction and subsequent re-compliance with Chapters 1 and 2 of the ASX Listing Rules. Upon successful completion of the acquisition and capital raise, Coolabah Metals aims to have its securities reinstated to official quotation on the ASX, under the new code BHM.

Operational and Exploration Focus

Post-acquisition, the company will transition from an explorer to a producing miner, focusing on the continued operation and development of the Rasp and Pinnacles Mines. The Rasp Mine, with a JORC-compliant Mineral Resource Estimate (MRE) of over 10 million tonnes at 9.4% zinc equivalent, is currently producing zinc, lead, and silver concentrates. The company plans to expand underground development to access higher-grade ore bodies and extend the mine life through resource definition and exploration.

At the Pinnacles Mine, which holds an MRE of approximately 6 million tonnes at 10.9% zinc equivalent, the company intends to undertake infill and extension drilling to upgrade and expand the resource. A feasibility study is planned to assess the viability of transporting ore from Pinnacles to the Rasp processing plant, which currently operates at about 50% capacity, presenting an opportunity to optimize throughput and production efficiency.

In addition to these core assets, Coolabah Metals retains a portfolio of exploration projects across Queensland, New South Wales, and lithium-focused properties in Canada, including the Hampden and McCoy Lake projects. These projects remain at various stages of exploration, with the company conducting strategic reviews and targeted sampling programs.

Financial and Governance Considerations

The acquisition consideration involves issuing 125 million shares and 65 million options to BHM vendors, alongside other securities to noteholders, facilitators, and management personnel. This will result in a significant increase in the company’s issued capital, with existing shareholders facing dilution risks of over 700% on a post-consolidation basis.

Financial reports reveal that both Coolabah Metals and BHM are currently operating at a loss, with material uncertainties related to going concern status. The board expresses confidence that the capital raise will provide sufficient working capital for the next 24 months, but acknowledges the possibility of requiring additional funding in the future.

Governance changes include the appointment of Patrick Walta as Executive Chair, alongside new non-executive directors with extensive mining experience. The company has also outlined comprehensive risk factors, including regulatory, environmental, native title, and operational risks, which investors should carefully consider.

Independent Assessments and Legal Compliance

ERM Australia Consultants Pty Ltd has provided an independent technical assessment report affirming the robustness of the mineral resource estimates and the operational viability of the Rasp and Pinnacles Mines. Legal due diligence confirms the good standing of the company’s tenements across Australia and Canada, with detailed reports addressing native title and heritage considerations.

Joint lead managers CPS Capital Group and Blue Ocean Equities are overseeing the public offer, with no underwriting in place. The company has secured necessary waivers and confirmations from ASX to facilitate the capital raising and re-listing process.