Published On: October 5th, 2023
Boab Metals Limited (ASX: BML) (“Boab” or the “Company”) provides an update on the progress towards reaching a Final Investment Decision for its 75% owned Sorby Hills Lead-Silver-Zinc Project in Western Australia’s Kimberley Region.
In January 2023, Boab Metals unveiled the findings of a Definitive Feasibility Study (DFS) conducted on the Sorby Hills Project. The results of this study demonstrated economic solid viability, featuring a pre-tax NPV of AUD 370 million and an impressive Internal Rate of Return (IRR) of 35%. These figures were supported by an anticipated 8.5-year mine life, with 83% of this duration categorised as Ore Reserves.
The study also showcased the Project’s cost-effectiveness, with projected low operating costs of USD 0.39 per pound of payable Lead, as opposed to the prevailing spot price of approximately USD 1.0 per pound.
Following the release of the DFS results, Boab Metals Limited has proactively initiated discussions with potential financiers for the Sorby Hills Project, involving commercial banks, government agencies, and specialised mining credit funds.
These discussions showcased the significant funding challenges junior project developers like Boab face in a high-inflation environment, highlighting the importance of further project optimisation.
Table of Contents
Project Optimisation Progress
- Accelerated mining of the higher-grade Norton deposit to boost metal production and revenue.
- Collection of diamond core from the Norton deposit for refining metal recovery processes.
- Detailed plant design and layout optimisation through Front-End Engineering and Design (FEED) completion.
- Updated pricing for the process plant by the preferred contractor GR Engineering Services (GRES), considering FEED outcomes and current costs, shows minimal change from the DFS estimate.
- Reduced the need for an on-site diesel generator, lowering power costs.
- Refreshed mining tender with a focus on competitive pricing and a positive project outcome.
Boab Metals Limited is actively working on optimising the Sorby Hills Project, with plans to share the results in a Sorby Hills FEED Study in Q1 2024. The ongoing optimisation efforts will effectively mitigate key risk areas, enabling smoother progress in negotiations with potential debt providers.
The Company has also been in positive discussions with off-takers and is exploring opportunities for them to provide additional financing. While negotiations progress, Boab Metals keeps its options open to secure the best Project finance deals.
With a cash balance of over AUD 3 million, the Company is well-funded to continue its optimisation efforts.
Boab Metals Managing Director and CEO, Mr Simon Noon, said,
“Securing funding for projects in general has been tough within the current economic environment. Boab and the Sorby Hills Project have not been immune from this challenge.
Whilst progress with financiers has advanced more slowly than we had hoped, the feedback we have received has allowed the Company to execute opportunities to enhance economic outcomes and shareholder value.
We thank our shareholders for their patience as we work through this process and confirm that our team remains firmly focused on advancing the Sorby Hills to a Final Investment Decision.
I look forward to providing the market with updates on the Project optimisation and financing and off-take outcomes as they progress and release assay results from our recently completed Phase VII drilling program in the short term.”
Investor Outlook and Financials
- The announcement indicates the Company’s economic viability, efforts to secure financing, and ongoing optimisation to improve economics and risk management. These factors collectively contribute to a favourable investment outlook for shareholders.
- The detailed FEED completion signals progress towards Project execution, reassuring investors.
- Updated tendered pricing for the process plant from GRES has negligibly changed from that provided in the DFS, indicating stability and predictability in Project costs, reducing financial risks for investors.
- With over AUD 3 million cash balance, Boab Metals is well funded to complete ongoing optimisation workstreams.
- Boab Metals Limited’s stock price stands at AUD 0.105 per share as of October 5th, 2023, with a 52-week range of AUD 0.097 – AUD 0.375.
- The Company has a market capitalisation of AUD 24.42 million as of October 5th, 2023, with 174.46 million shares on issue.
Visit the official website for the latest announcements and investment news.
About Boab Metals Limited
Boab Metals Limited is a Perth-based exploration and development company specialising in base and precious metals. Their primary focus is advancing the Sorby Hills Project, which positions them as a potential near-term lead-silver producer in Western Australia.
Boab Metals Limited is known for its strong community connections in the Kimberley region, underscoring its commitment to responsible resource development and the supply of essential metals for a sustainable future.
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