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Euroz Hartleys has reinforced its confidence in Boab Metals (ASX:BML) following significant progress at the Sorby Hills lead-silver project in Western Australia. In its report, dated December 20, 2024, the firm maintains a "speculative buy" recommendation, revising its valuation to AU$0.50 per share (down from AU$0.62) and adjusting the price target to AU$0.55, reflecting updated timelines and funding requirements.
Financially, Sorby Hills is poised to deliver strong returns, with projected net cash flows of AU$778 million over its life and an average annual EBITDA of AU$126 million. The upfront capital expenditure is estimated at AU$264 million, reflecting an increase of 8 percent from the definitive feasibility study, but this is offset by improved operating cost efficiencies.
Location of Sorby Hills resources
Boab Metals anticipates making a final investment decision in the second half of 2025, with construction commencing later that year and production targeted for 2027. The company is in advanced discussions with potential financiers, including the Northern Australia Infrastructure Facility, Export Finance Australia, and commercial banks, to secure funding for the project.
Key highlights of the report:
- Offtake Agreement Secured: A key milestone for Boab Metals is the binding offtake agreement secured with Trafigura Asia Trading. This agreement covers 75 percent of the lead-silver concentrate production from Sorby Hills, totaling 531,000 tonnes over seven years. In addition, Trafigura will provide a US$30 million prepayment facility with competitive terms, including an interest rate of SOFR plus 5 percent per annum. The facility is structured for long-term repayment, with an 18-month interest-only period followed by equal monthly installments over 42 months.
- Strategic Acquisitions: In a move to solidify its position, Boab Metals has agreed to acquire the remaining 25 percent interest in Sorby Hills from its joint venture partner, Henan Yuguang, China's largest lead smelting company. The acquisition, valued at AU$23 million, will be paid in installments tied to project milestones, including the final investment decision and initial concentrate sales. With this deal, Boab gains full ownership of the project, maximizing its exposure to its economic potential.
- Project Development: The recently completed front-end engineering and design study highlights the significant production potential of Sorby Hills. The study envisions a large-scale open-pit operation processing 2.3 million tonnes of ore annually. Average lead production is expected to exceed 64,000 tonnes per year, with peak production reaching 80,000 tonnes. The project also benefits from competitive C1 costs, estimated at US$0.36 per pound, and silver credits further enhancing its economics.
For the full analyst report, click here.
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Boab Metals Limited
Investor Insight
Boab Metals is well-positioned to capitalize on the rising demand for lead and silver, delivering value to shareholders and supporting the global transition to sustainable energy systems.
Overview
Boab Metals (ASX:BML) is an ASX-listed base and precious metals explorer and developer with a flagship project poised for near-term production. Boab Metals is progressing toward a final investment decision (FID) on its Sorby Hills project, a world-class lead-silver deposit, underpinned .
Strategically located 150 km from Wyndham Port, the Sorby Hills project benefits from excellent infrastructure, including access to green power from the Ord River hydroelectric plant. The company's strategy combines technical expertise, sustainable practices, and robust financial planning to advance the Sorby Hills project, which is slated to produce high-grade lead-silver concentrate through conventional open-pit mining.
Strong economics underpin the project with a net present value (8 percent) of AU$411 million and a 37 percent internal rate of return, as confirmed by the completed front-end engineering design (FEED) study. Life-of-mine operating cash flow is pegged at AU$1.1 billion with an average annual EBITDA of AU$126 million. It boasts a competitive C1 cash cost of US$0.36/lb payable lead (after considering silver credits).
Further boosting the prospects of the Sorby Hills project a binding offtake and prepayment agreements with Trafigura, which ensured 75 percent of the lead-silver concentrate produced at Sorby Hills is pre-sold, providing a cornerstone financial foundation.
Company Highlights
- Boab Metals is an ASX-listed base and precious metals explorer and developer with a flagship project poised for near-term production.
- The Sorby Hills project, Boab’s flagship asset, boasts a high-quality 47.3 Mt resource at 4.3 percent lead equivalent (123 g/t silver equivalent), including 53 Moz contained silver, and is in Western Australia, 50 km northeast of Kununurra.
- Strong economics underpin the project with an NPV (8 percent) of AU$411 million and an IRR of 37 percent, as confirmed by the completed FEED study. Life-of-mine operating cash flow of AU$1.1 billion with an average annual EBITDA of AU$126 million. Competitive C1 cash cost of US$0.36/lb payable lead (after considering silver credits).
- Binding offtake and prepayment agreements with Trafigura.
- Access to green hydroelectric power and existing environmental approvals enhance the project’s sustainability credentials and support reduced operational costs.
- Committed to community engagement, Boab Metals fosters strong relationships with local stakeholders and supports regional development initiatives.
- Expert leadership with a proven track record in exploration and development of mining assets
Key Project
Sorby Hills Project
Boab Metals owns 75 percent of the Sorby Hills Project, with the remaining 25 percent held by Henan Yuguang Gold & Lead Co., China's largest lead smelting and silver producer. The project boasts a substantial, high-quality resource base of 47.3 million ton resource base at 4.3 percent lead equivalent (123 g/t silver equivalent), including 53 million ounces of contained silver, all with significant exploration upside.
Project Highlights
- Strategic Location: Situated in the Kimberley region of Western Australia, 50 km northeast of Kununurra, Sorby Hills benefits from proximity to existing infrastructure, including access to the Wyndham Port, facilitating efficient export routes to Asian markets.
- Low-risk Mining: Conventional open-pit mining with a shallow, high-grade orebody, ensuring rapid payback and early cashflows.
- Straightforward Conventional Processing: The process plant employs a crush-mill-flotation circuit to produce high-grade lead-silver concentrate, achieving metallurgical recoveries of 92 percent for lead and 82 percent for silver.
- Infrastructure and Accessibility: Excellent infrastructure, including sealed roads to Wyndham Port, facilitates efficient transport and export logistics.
- Exploration Upside: Potential for near-pit resource growth and regional discoveries at prospects like the Keep zinc-lead target and Eight Mile Creek.
- Sustainable Project: Powered by ~90 percent renewable energy from the Ord River hydroelectric plant. Opportunities are being explored to eliminate diesel power backups, further reducing emissions.
- Community Engagement: Boab Metals actively supports local initiatives, including partnerships with the Teach Learn Grow program and sponsorship of the Ord Valley Muster, which fosters community development in the East Kimberley region.
- Key Milestones Ahead: The company expects to finalize all regulatory approvals and secure debt financing to support project development by the first half of 2025, with construction and development expected by the second half of 2025. Boab Metals also plans to conduct infill drilling and exploration to expand the resource and refine the reserves.
Management Team
Gary Comb – Chairman
An engineer with over 30 years of experience in the Australian mining industry, Gary Comb has a strong track record in successfully commissioning and operating base metal mines. He previously served as chairman of Finders Resources, and was the managing director of Jabiru Metals and CEO of BGC Contracting.
Simon Noon – Managing Director & CEO
Appointed on October 19, 2013, Simon Noon brings more than 15 years of experience managing public resource companies. He has a strong background in strategic management, business planning, finance and capital raising across various commodities. Noon's notable achievements include leading the acquisition and development of the Sorby Hills project, resulting in a 50 percent increase in the mineral resource and the delivery of high-quality feasibility studies
Richard Monti – Non-executive Director
A geologist with a successful career spanning over 30 years in the international mineral resource industry, Richard Monti has broad industry knowledge and strong strategic planning capabilities. He has more than 46 years of directorship experience in 13 ASX and TSX listed mining and exploration companies, building and managing teams of up to 70 personnel.
Andrew Parker – Non-executive Director
Holding a Bachelor of Laws degree from the University of Western Australia, Andrew Parker has significant experience in the exploration and mining industry, with expertise in corporate advisory, strategic consultancy, and capital raising. Before joining Boab Metals, he co-founded Trident Capital, a corporate advisory and venture capital firm.Advancing toward near-term lead and silver production in Western Australia
Silver Price Surges to US$37, Highest Value Since May 2011
The central bank has held its benchmark rate at 4.25 to 4.5 percent since November 2024.
Silver price, June 10 to June 17, 2025.
Chart via the Investing News Network.
CME Group's (NASDAQ:CME) FedWatch tool shows more than half of market respondents predict a 0.25 percent cut at the Fed's September meeting, while just 8 percent are expecting the Fed to make a deeper 0.5 percent cut.
The central bank is widely expected to leave rates unchanged at its June and July meetings.
Silver's price surge also comes amid escalating tensions between Israel and Iran. The two countries have come closer to war in recent days, with Israel striking nuclear and military targets deep in Iran.
On Monday (June 16), US President Trump took to Truth Social to urge a complete evacuation of Tehran ahead of planned strikes on targets in the city. He also urged Iran to abandon its nuclear ambitions.
On the economic front, the US Bureau of Labor Statistics released its May consumer price index figures on June 11. The data shows inflationary growth, with the all-items index ticking up to 2.4 percent from 2.3 percent in June.
Growth was tempered mainly by falling prices at the pumps. Additionally, retail prices have yet to feel the full impact of US tariffs as retailers continue to work through stockpiles acquired earlier in the year.
Elsewhere, gold and equity markets weren’t faring as well on Tuesday.
Gold was flat, trading at US$3,385 per ounce. It has surged more than 25 percent this year, setting a slew of new price records, and has continued to trade in elevated territory, fueled by the same conditions as silver’s recent run. However, silver benefits from a lower entry point for investors looking for more affordable safe-haven investments.
The S&P 500 (INDEXSP: INX) was down on Tuesday, recording a 0.78 percent decline to 5,986. The Nasdaq-100 (INDEXNASDAQ: NDX) was also down, falling 0.89 percent to 21,744, and the Dow Jones Industrial Average (INDEXDJX: .DJI) slipped 0.68 percent to 42,222.
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Boab Metals Limited Investor Kit
- Corporate info
- Insights
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- Upcoming projects