The company agreed in principal to acquire the silver-lead-zinc CML7 title, which covers the central 3.8 kilometres of the Broken Hill orebody.

Redfire has also agreed to purchase Pinnacle Mines, including the mine itself, located 18km south of Broken Hill, equipment and a processing plant designed to mine and treat Broken Hill ore.

The company will pay for the acquisitions with $2.5 million worth of its stock plus $3 million in cash, to be paid in stages.

The exploration company has mineral sands projects in New South Wales’ Murray Basin, sourcing titanium and zircon feedstocks; copper and gold projects at Burra, 160km north-east of Adelaide; an opal project at Cooper Pedy; and a gold and base metal project at Moonabie, also in South Australia.

“We embarked on the Broken Hill project to generate cash flow,” Redfire’s managing director, Bob Besley, said.

“The market is not as supportive as it once was at the risk stage of exploration, so the company has acquired Orange Solutions technology company and the Broken Hill project to generate positive cash flow.”

Despite the fact that the Broken Hill orebody has been mined since 1883, Besley is confident considerable potential remains.

“One of the issues about mining Broken Hill is the high cost rates in the past, when royalties were up to 50%,” he said.

“This meant only the high grade ore was mined, leaving lower grade remnant blocks behind.

“Redfire will focus on further exploration of the large tonnage zinc-lead western mineralisation to define higher grade positions, suitable for underground mining.”

Besley said cash flow generated from the Broken Hill and Orange Solutions projects would be used to finance exploration projects.