Broken Hill Mines' World-Class Deposit Meets a Precious Metals Pullback

A transition to higher-grade Main Lode ore and a structural silver supply deficit drove strong gains, before a broader precious metals sell-off reversed much of the rally.

31 May 2026 · 3 min read

Broken Hill Mines, a newly formed zinc, lead and silver producer operating in the historic Broken Hill mining centre on the original tenements that gave rise to BHP, rallied on a structural silver supply deficit and a transition to higher-grade Main Lode ore, before a sharp precious metals sell-off reversed most of the gains in what fund managers view as a healthy pullback.

A world-class asset base with historic BHP pedigree

Blackwattle Investment Partners said Broken Hill Mines rose 33.0 percent, describing a zinc, lead and silver producer operating in the historic mining centre of Broken Hill in New South Wales, with the recently formed company now the major operator in the world's largest zinc-lead-silver mineralised system, located within the original tenements that ultimately gave rise to BHP, underscoring the scale and pedigree of the asset base.

Broken Hill Mines is a zinc, lead and silver producer operating in the historic mining centre of Broken Hill in New South Wales. The recently formed company is now the major operator in the world's largest zinc–lead–silver mineralised system, located within the original tenements that ultimately gave rise to BHP, underscoring the scale and pedigree of the asset base.

— Blackwattle Investment Partners, Monthly Report, December 2025

A transition to higher-grade ore backed by structural silver demand

Phoenix Growth Fund said Broken Hill Mines is currently transitioning from low to higher grade silver-lead-zinc ores via the new Blackwoods development into the Main Lode system, which hosts a silver equivalent grade of 526 grams per tonne, more than double the current production grade, estimating total revenue in excess of US$300 million assuming production of 600,000 tonnes in FY27. The fund separately noted silver surged from US$56 an ounce to US$72 an ounce in one month in December, aggressively compressing the gold-to-silver ratio from triple digits down to 60:1, underpinned by a structural supply deficit as intensifying industrial demand from solar PV, AI data centres and electrification outpaces stagnant mine supply, given silver is primarily produced as a by-product of lead, zinc and other base metals.

BHM is currently transitioning from low to higher grade silver-lead-zinc ores via the new Blackwoods development into the Main Lode system, which hosts a silver equivalent grade of 526 g/t, more than double the current production grade. Assuming production of 600kt in FY27, we estimate total revenue in excess of US$300 million.

— Phoenix Growth Fund, Monthly Report, September 2025

A sharp precious metals sell-off, viewed as a healthy pullback

Blackwattle Investment Partners said Broken Hill Mines fell 40.3 percent in March, reversing the gains that made it one of its top contributors in December, describing the company as consolidating ownership of the historic Broken Hill ore body in New South Wales, the largest known silver-lead-zinc deposit in the world, in a Tier-1 mining jurisdiction with more than 140 years of continuous production. Phoenix Growth Fund said Broken Hill Mines declined 40.8 percent in March as precious metals sold off sharply, viewing the pullback as healthy and not too concerning, believing the sector would stabilise over the rest of the year.

Broken Hill Mines declined -40.8% in March as precious metals sold off sharply. In our view the pullback is healthy and we are not too concerned as we believe the sector will stabilise over the rest of the year.

— Phoenix Growth Fund, Monthly Report, March 2026

What fund managers say they are watching next is continued transition to higher-grade Main Lode ore via the Blackwoods development, delivery of the estimated 600,000 tonne FY27 production and US$300 million-plus revenue target, whether the structural silver supply deficit from solar PV, AI data centres and electrification continues supporting prices, and whether the sector stabilises as Phoenix expects following the sharp precious metals sell-off.