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Heritage Gold's 28%-owned Broken Hill to sell shares, go public

Thursday 11th November 2010

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Broken Hill Prospecting, which holds licences over mineral deposits in the ore bearing Broken Hill region of Australia, plans to sell up to A$9 million of shares that trade on the ASX and the NZX.

The minerals prospector is 28%-owned by dual-listed Heritage Gold, whose shareholders have been offered a priority entitlement to the new stock in the initial public offering. The offer is for up to 25 million shares of 20 Australian cents each, with facility for as much as 10 million of oversubscriptions. A free three-year option to buy shares for 20 cents comes with every two ordinary shares.

The shares come with a free option for every two ordinary shares. They would be exercisable at 20 cents in the three years from ASX listing.

Broken Hill will use the funds for “a two-year exploration, development and evaluation program on BHPL’s Broken Hill-style massive sulphide prospects and cobalt deposits,” the company statement says.

Its exploration work to date has found at least 15 cobalt, silver, lead and zinc targets, with at least three showing potential.

Heritage owns 17.9 million shares and 8.46 million 5-year options at 20 cents. Its own shares last traded on the NZX at 2.3 cents on November 5, and slumped 12% to 2.2 Australian cents on the ASX.

Broken Hill’s Pyrite Hill and Big Hill cobalt deposits are estimated to have an inferred mineral resource of about 15 million tonnes at a grade of 2.1 lb/tonne, the statement said.

The offer opens on November 15 and closes on December 6.

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