As Bob Besley, managing director of ASX listed CBH Resources puts it very modestly "We are now on the way to becoming a reasonably sized mining company." He certainly put his foot on the accelerator today with simultaneous announcements that the company has raised A$30 million by rejigging its sales of zinc concentrate from the Endeavor mine at Cobar in New South Wales, and is making a recommended all paper offer for Triako Resources.

The current arrangement with the concentrate is that until the end of December 2008 50,000 tonnes of zinc concentrate goes to Zinifex and the balance to Toho Zinc. Now Toho is going to buy all the concentrate from 2009 onwards at the same price which applies now, namely the annual prevailing Asian benchmark price. As a result Toho Zinc is going to pay CBH A$15 million in a 'soft' unsecured five year loan at 2% interests. The balance will be a 5 year unsecured convertible note at the same rate of interest. Toho already owns more than 20 per cent of CBH equity so is limited under the Australian Takeover Code to increasing its holding by 3 per cent /year. This presents no problem and the deal itself is a strong sign of Toho's commitment to the future of the company

The A$30 million will be added to the cash flow which should be spinning off the Endeavour mine in the current quarter and will enable CBH to accelerate development of the Sulphur Springs zinc-copper deposit in Western Australia and the Broken Hill zinc-lead-silver project in New South Wales. At the end of March CBH reported that mine production was at approximately 30 per cent of normal production capacity at Endeavour which is 300,000 tonnes per quarter. This resulted from the problems accumulating at the end of 2005 from a rock fall and a switch from using contractors to having its own crew at the mine. As a result there is an additional 23,664 tonnes of stockpiled ore which will be treated this quarter and full and profitable production should be restored by the third quarter though backfilling is proving slightly slower than expected.

The acquisition of Triako means that its principal asset, the Hera project, can be integrated with the Endeavour mine which is 150 kms to the north west. Hera's latest resource estimate shows 1.94 million tonnes grading 6.7 g/t gold, 2.8% zinc, 2.5% lead, 0.2% copper and 14 g/t silver and Bob Besley reckons it can be mined economically and trucked to Endeavor. This would save Triako having to build a plant of its own and will only require a small upgrade at Endeavor to recover free gold. Meanwhile successful drilling has been taking place in the upper 100 metres of the Sulphur Springs zinc-copper deposit which is only 160 kms by road from Port Hedland in Western Australia to which the concentrate will be trucked for shipping. A new resource calculation based on open pit cut-off grades has substantially increased the total resource estimate for the deposit to 13.8 million tonnes grading 3.7% zinc, 1.4% copper and 21 g/t silver and it contains a large high-grade component of 8.5 million tonnes 5.2% zinc, 1.9% copper and 25 g/t silver

The final feasibility study for Sulphur Springs should be completed next month and it is based on an open pit, the design for which will be included. Bob Besley is confident that the economics will prove very robust so the decion to go ahead with development is a foregone conclusion. Site preparation should start in the second half of this year and production should be underway by the end of 2007 or early in 2008. The project design is for a 1.25 million tonne per year ore throughput to generate 65,000 tonnes per year of copper concentrates (25% copper) and 75,000 tonnes per year zinc concentrate (53% zinc). The capital cost is expected to come in at just below A$100 million and payback should take place in less than a year at current metal prices.

And then there is the Rasp mine project where CBH is at an advanced stage of planning an underground operation and processing facility on the Western Mineralisation zone of the Broken Hill line of lode where the company holds title to the central 3.8 kilometres. A resource has now been modelled in the upper part of this mineralised zone totalling 9.2 million tonnes assaying 4.1% zinc and 2.8% lead. The overall Western Mineralisation zone as drilled to date extends from 100 metres to 800 metres depth and has a strike length of 1.7 kilometres. The initial development of the Rasp Mine is focussed on the section between 200 metres and 420 metres depth which will be accessed by a decline from the base of the Kintore pit. A faulted extension of the Western Mineralisation, the Centenary Mineralisation, lies between 800 metres and 1300 metre depth. Both the Western Mineralisation and Centenary Mineralisation are open-ended and provide significant upside potential for the Rasp Mine project which is within the central mining leases at Broken Hill so all infrastructure is available.

Small wonder Bob Besley is optimistic about the future growth of his company which is reflected in a number of experts he has recently recruited. By 2008 there should be three mines in operation and there is plenty of exploration potential to boost resources at all of them. In addition the concentrate shiploading facility at Newcastle should be benefiting from increased activity in the Broken Hill region of New South Wales.