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Shaw and Partners' recent research note, dated December 16, 2024, highlights a promising outlook for silver in 2025, emphasizing Boab Metals' (ASX:BML) strategic position to benefit from this trend.
With its flagship Sorby Hills Project in Western Australia, the company is poised to capitalize on rising silver demand and constrained global supply. The report highlights Sorby Hills' robust metrics, including a pre-tax net present value (NPV) of AU$411 million and a pre-tax internal rate of return (IRR) of 37 percent, underpinned by low operating costs and a significant lead-silver concentrate output.
The analyst firm also underscores the importance of the binding offtake agreement with Trafigura, which includes a US$30 million prepayment, providing financial flexibility and market access. Boab Metals' advanced project timeline and favorable economics position it as a standout player in the silver sector.
Key Insights:
- Silver Market Dynamics: The report identifies two primary drivers for silver's anticipated strength: its historical correlation with a rising gold price and increasing demand from the solar panel industry. This uptick is largely attributed to the solar sector, which has seen its share of silver consumption rise from around 5 percent in 2015 to approximately 14 percent in 2023.
- Sorby Hills Project: Boab Metals' Sorby Hills Project, located in Western Australia's Kimberley Region, stands out as one of the most advanced silver projects on the ASX. The project's Front-End Engineering and Design study, completed in June 2024, outlines compelling metrics: an upfront capital expenditure of AU$264 million, an average C1 cost of US$0.36 per pound of payable lead (inclusive of silver credits), a pre-tax NPV of AU$411 million, a pre-tax IRR of 37 percent, and an average annual EBITDA of AU$126 million.
- Offtake Agreement and Financing: A significant milestone for Boab Metals is the binding offtake agreement with Trafigura for the lead-silver concentrate from Sorby Hills. This agreement includes a US$30 million prepayment, bolstering the project's financing strategy. Additionally, the company is exploring debt funding opportunities with entities like the Northern Australia Infrastructure Facility, which offers concessional loans for infrastructure projects in northern Australia.
- Lead Market Perspective: Contrary to common misconceptions, the report underscores that lead consumption has been on an upward trajectory, averaging a 3.2 percent annual increase from 2004 to 2023. The forecast anticipates continued growth at 2.2 percent annually through 2030, driven by sustained demand in various industrial applications.
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 Update: Q2 2025 in Review
Unlike gold, however, silver also saw gains as industrial demand strained overall supply.
What happened to the silver price in Q2?
The quarter opened with the price of silver sinking from US$33.77 per ounce on April 2 to US$29.57 on April 4. However, the metal quickly found momentum and climbed back above the US$30 mark on April 9.
Silver continued upward through much of April, peaking at US$33.63 on April 23.
Volatility was the story through the end of April and into May, with silver fluctuating between a low of US$32.05 on May 2 and a high of US$33.46 on May 23.
Silver price, April 1 to July 17, 2025.
Chart via Trading Economics.
At the start of June, the price of silver soared to 14 year highs, opening the month at US$32.99 and rising to US$36.76 by June 9. Ultimately, the metal reached a year-to-date high of US$37.12 on June 17. Although the price has eased slightly from its high, it has remained in the US$36 to US$37 range to the end of the quarter and into July.
Silver supply/demand balance still tight
Various factors impacted silver in the second quarter of the year, but industrial demand was a primary driver in both upward and downward movements. Over the past several years, silver has been increasingly utilized in industrial sectors, particularly in the production of photovoltaics. In fact, according to the Silver Institute’s latest World Silver Survey, released on April 16, demand for the metal reached a record 680.5 million ounces in 2024.
Artificial intelligence, vehicle electrification and grid infrastructure all contributed to demand growth
At the same time, mine supply has failed to keep up, with the institute reporting a 148.9 million ounce production shortfall. This marked the fourth consecutive year of structural deficit in the silver market.
In a June 11 interview with the Investing News Network (INN), Peter Krauth, editor of Silver Stock Investor and Silver Advisor, said deficits are likely to get worse in the coming years as aboveground stockpiles are chipped away.
“(We have) flat supply, growing demand — demand that’s nearly 20 percent above supply," he said. "And our ability to meet those deficits is shrinking because we’re tapping into these aboveground stockpiles that have shrunk by about 800 million ounces in the last four years, which is equivalent to an entire year’s mine supply. So it’s the perfect storm."
But industrial demand can send the silver price in either direction.
The chaos caused by Trump’s on-again, off-again tariffs has caused some consternation among investors.
While gold and silver have traditionally both been viewed as safe-haven assets, silver’s increasing industrial demand has decoupled it slightly from that aspect. When Trump announced his "Liberation Day" tariffs on April 2, silver was impacted due to fears that a recession could cause demand for the metal to slip.
Although the dip in silver was short-lived, it was one of its steepest falls in recent years.
In an email to INN, Julia Khandoshko, CEO of Mind Money, said a recession could have consequences for silver, but she wouldn't expect them to last long:
“If a global recession really starts, silver will most likely nosedive momentarily. In terms of its 2025 performance, silver growth has been largely bolstered by consolidated precious metals group appreciation, additionally beefed up by relative USD weakness."
Geopolitics and the silver price
Adding to the tailwinds is a growing east-west divide. Due to its usage in industrial components, particularly those related to the military and energy sectors, and its role as a safe haven, silver is being influenced by geopolitics.
June’s price rally came alongside growing speculation that Israel was preparing to attack Iranian nuclear sites. Investors became concerned that war could disrupt international trade and oil movements in the region.
Ultimately, their concerns were proven right, and Israel launched attacks on June 12; the US then bombed key nuclear facilities on June 21. While the escalation is new, the underlying politics have been simmering for years.
Sanctions against Russia have strengthened support among the BRICS nations, which have been working to reduce their reliance on US dollar assets, such as treasuries, and increase trade in their own currencies.
But they may also be working to separate themselves from western commodities markets. In October 2024, Russia floated the idea of creating a precious metals exchange to its BRICS counterparts. If established, it could shake up pricing for commodities like silver, allowing Russia to circumvent sanctions and trade with its bloc partners.
While the exchange is still just an idea, a bifurcated world is not. While the US has targeted most nations with tariffs, it has singled out China. Much of the first half of the year saw the world’s two largest economies escalate import fees with one another, with China even restricting the export of rare earth elements to the US.
Discussions on national security and critical minerals have been at the forefront for the last several years. Still, they have become even more pronounced with the US and China on tense footing.
In a July 9 interview with INN, economist and author Dr. Nomi Prins suggested that national security demands are likely to offset the impact of any economic downturn on the broader economy.
“Even if that’s going to happen, industrial use value — building infrastructure, building national security, national energy priorities — needs a lot of silver, and there just simply isn’t enough supply out of the ground to meet the demand. That’s long-term demand above the ground. This has been a thing, but right now, because of these geopolitical forces and realignments, silver is going to drop more into that industrial role,” she said.
Silver price forecast for 2025
Overall, the expectation is that without new mine supply and dwindling aboveground stockpiles, silver is likely to remain in deficit for some time. Other factors, like Trump tariffs and geopolitics, aren’t likely to disappear either.
Demand could ease off if a global recession were to materialize, but safe-haven investing could offset declines.
For his part, Krauth thinks the silver price is likely to remain above the US$35 mark, but it could fluctuate and he suggested a rally in the US dollar could push the silver price down. However, he also sees some pressure easing on the recession side of the equation if the US signs tariff deals that would eliminate some uncertainty.
“US$40, let’s say by the end of this year," he said, adding, "Frankly, I could see something really realistically above that, maybe an additional 10 percent if the scenario plays out right."
He doesn’t think that’s the end. In the longer term, Krauth sees silver going even higher. He pointed to the current gold-silver ratio, which is around 92:1, compared to an average of 60:1 over the last 50 years.
“So we could go to, who knows, somewhere like maybe 40 or 30 to one in the ratio. That would be tremendous for silver — that could bring silver above US$100. I’m not saying that’s happening tomorrow, but in the next couple of years I would say that’s certainly something that could easily be in the cards,” Krauth said.
Fundamentals and geopolitics aligned for silver in the first half of 2025, and barring a recession, they are likely to provide tailwinds in the second half. Whether the price climbs or continues to find support at US$35 is yet to be seen.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Boab Metals Limited Investor Kit
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