Boab’s Sorby Hills is speeding ahead to be Australia’s next Lead-Silver mine
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Boab has been making great strides towards making a final investment decision for its flagship Sorby Hills project during the first half of 2022.
During the 2021 financial year, the company released an optimised pre-feasibility study that highlighted the project’s strong economics such as a quick capex payback of just 1.6 years along with net present value and internal rate of return of $303m and 46% respectively.
Boab Metals (ASX:BML) has also updated project resources to 44.9 million tonnes at 4.3% lead equivalent (3.2% lead, 37g per tonne silver) and 0.5% zinc following the successful Phase IV drilling program that was focused on securing metallurgical and geotechnical samples to support the definitive feasibility study.
This paved the way for the ongoing Phase V drill program that will investigate the potential to expand the mining and processing capacity in the DFS.
During this period, the company received a letter of support from Export Finance Australia in relation to the provision of debt finance and signed an agreement with partner Henan Yuguang Gold and Lead to fast-track finalisation of a mining joint venture agreement to govern the development and operation of Sorby Hills following a Decision to Mine.
Additionally, the company has completed a 25 to 1 share consolidation that reduced its outstanding shares from 3.8 billion to a more manageable 152 million shares and completed a $15m capital raising via placement and options exercise that ensures that it is fully funded to a final investment decision.
Lender engagement has also been successful with Boab receiving positive feedback from potential commercial bank financiers on the Sorby Hills Project and indicative financing structure while initial soundings of top tier offtakers have confirmed the high saleability of Sorby Hills lead-silver concentrate.
Operations are expected to benefit from the appointment of David English, who had worked in senior roles in the development of Sandfire’s Dugrussa Mine and IGO’s Nova Bollinger Mine, as the company’s inaugural chief operating officer.
Besides the commencement of the DFS and Phase V drill program, the company has also started metallurgical testwork for the DFS, and moved to the due diligence stage of the financing approval and assessment process of the Northern Australia Infrastructure Facility.
The Sorby Hills project in the East Kimberley region is Australia’s largest undeveloped, near-surface lead-silver-zinc deposit.
Test work to date has confirmed high metal recoveries using a conventional crush-mill-float processing circuit while the 10-year mine life is underpinned by 92% reserves.
It is also close to existing infrastructure with the upcoming completion of upgrade works to the Moonamang Road to provide year round access to and from Sorby Hills.
Key approvals are already in place, meaning that development will follow closely on the heels of FID.
This article was developed in collaboration with Boab Metals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.