Broken Hill Mines (ASX: BHM) reported a strong March quarter with a 29% ore grade increase and a 52% jump in silver output, driven by ramp-up at Rasp Mine and advancing Pinnacles development. Operational cashflow rose 45% to A$2.4m amid cost reductions and a strategic partnership with Kingfisher Mining.
- Ore grade at Rasp Mine up 29% with new Main Lode feed
- Silver production surged 52%, lead up 49%, zinc up 8%
- Pinnacles Mine drilling confirms high-grade zones, mining to start June
- Operational cashflow increased 45% to A$2.4m; production costs down 6%
- Strong liquidity of A$75m and strategic agreement with Kingfisher Mining
Rasp Mine Drives Production and Grade Gains
Broken Hill Mines (ASX:BHM) delivered a robust operational performance in the March 2026 quarter, advancing its Rasp Mine ramp-up to a targeted 750,000 tonnes per annum capacity. The key catalyst was the integration of the high-grade Main Lode ore body as a second feed source, complementing the existing Western Min ore. This shift lifted the average ore milled grade by 29% to 6.5% zinc equivalent, underpinning a 52% surge in silver production to 78,649 ounces and a 49% rise in lead output to 2,473 tonnes. Zinc production also climbed 8% to 3,113 tonnes.
Ore processed edged up 3.6% to 115,653 tonnes, reflecting steady operational throughput. The company’s transition from contractor to owner-operator underground development in February contributed to a reduction in growth capital expenditure by 28% to A$10.1 million, while production costs fell 6% to A$19 million despite higher metal output. These efficiencies supported a 45% increase in operational cashflow to A$2.4 million.
Safety improvements continued, with the Total Recordable Injury Frequency Rate decreasing to 18.9. Development efforts focused on expanding access to Blackwoods North and Thompsons areas within the Main Lode, with five levels of Blackwoods South now established.
Pinnacles Mine Progresses with High-Grade Drilling
The Pinnacles Mine is on track for mining commencement in the June quarter following completion of early works and operational readiness. The March quarter saw approximately 8,000 metres of Phase 2 drilling targeting open pit expansions and underground potential, including the high-priority Perseverance zone.
Drill results have revealed exceptional silver-lead-zinc grades, with intercepts such as 2.2 metres at 1,556g/t silver equivalent, confirming a very high-grade underground zone extending 350 metres down dip and up to 100 metres wide. Notably, near-surface mineralisation proximal to historic open pits suggests scope for expanding planned open pit operations.
These findings support an updated Mineral Resource Estimate scheduled for late 2026, which will inform mine planning and potential underground development via an exploration decline. The company is also advancing Front End Engineering Design for a Tailings Dewatering Plant to replace solar drying, enabling the Rasp Mine to reach its nameplate capacity by January 2027.
Financial Strength and Strategic Partnerships
Despite a decline in metal prices late in the quarter, BHM’s sales revenue (excluding Quotational Period adjustments) rose 34% to A$27.2 million, supported by strong volumes and favourable pricing earlier in the period. Actual cash receipts of A$30 million were bolstered by inventory movements and prior period sales settlements.
The company maintains a solid balance sheet with total liquidity of A$75 million, including A$44 million cash, undrawn debt facilities, and unsold concentrate inventory. In January, BHM drew US$7.5 million from its Hartree Partners facility while repaying A$9.1 million on its revolving credit facility during the quarter.
Notably, BHM signed a Strategic Mining and Processing Agreement with Kingfisher Mining (ASX:KFM) to exclusively process ore from Kingfisher’s high-grade Broken Hill tenements at Rasp. This deal accelerates production potential from targets such as Copper Blow and Allendale, held jointly by the partners, and aligns with BHM’s broader growth strategy. This partnership builds on the company’s recent Rasp mining lease renewal securing long-term operational rights through 2047.
Exploration Drilling Advances Resource Upside
BHM completed over 16,500 metres of drilling across Rasp and Pinnacles during the quarter, with assays pending from 9,500 metres of core. The drilling program, part of a 42,000-metre 2026 plan, aims to underpin targeted resource upgrades later this year. Early results confirm both extensions of known mineralisation and new high-grade zones, including gold and copper credits that could enhance polymetallic value.
Exploration expenditure remained steady at A$3.4 million but is expected to moderate for the remainder of 2026 as drilling programs progress ahead of schedule. The company’s strategic focus on resource growth and mine optimisation is evident in ongoing infill and extension drilling at Blackwoods, Western Mineralisation, Main Lode, and Centenary orebodies.
Bottom Line?
BHM’s operational momentum and strategic partnerships position it well for sustained production growth and cashflow generation, but the market will watch closely how metal price volatility and Pinnacles’ ramp-up unfold.
Questions in the middle?
- Will Pinnacles Mine meet its June quarter production start as planned?
- How will metal price fluctuations impact BHM’s revenue and cashflow in coming quarters?
- What resource upgrades from ongoing drilling could materially alter BHM’s mine plans?