Sorby Hills Project Faces Financing and Approval Tests Despite Key Milestones

Strategic Acquisition De-Risks Sorby Hills

Boab Metals Limited (ASX, BML) has marked a pivotal milestone in advancing its flagship Sorby Hills Lead-Silver-Zinc Project in Western Australia's Kimberley region by signing a binding Sale and Purchase Agreement to acquire the DeGrussa Processing Plant from Sandfire Resources for A$10 million. This acquisition is a strategic move to reduce upfront capital expenditure and mitigate supply chain risks by securing critical processing infrastructure already aligned with Sorby Hills’ flowsheet.

The DeGrussa plant components, including a substantial inventory of spare parts and equipment, are well-suited to support the project's targeted annual concentrate production of approximately 103,000 tonnes. Boab’s Managing Director Simon Noon highlighted the acquisition as a key de-risking achievement that enhances project execution certainty and cost efficiency.

Capital Raising and Financing Progress

To support ongoing development activities, Boab completed a A$6 million placement to sophisticated and institutional investors during the quarter. The funds will be directed towards pre-development costs, early site works, partial camp refurbishment, project finance costs, and working capital. Alongside this, the company holds a healthy cash balance of approximately A$7.6 million as of 30 June 2025.

Boab has also made significant strides in securing project financing, receiving multiple non-binding term sheets from both domestic and international financiers. The company remains confident in finalising a funding package that aligns with its target gearing profile, which will be critical to reaching a Final Investment Decision (FID) in the second half of 2025.

Robust Project Economics Enhanced by Silver Price Upswing

The Sorby Hills project boasts strong economics, underpinned by a recent Front-End Engineering & Design (FEED) Study that estimated a pre-tax net present value of A$411 million and an internal rate of return of 37%. Operating costs are expected to be comfortably covered by lead revenues, with silver credits providing significant upside leverage.

Notably, the silver price has surged by approximately 40% since the FEED Study assumptions, rising from US$27.40 to US$38.40 per ounce. This price uplift has the potential to materially enhance project returns beyond the original base case, adding further financial robustness to Boab’s development plans.

Regulatory Approvals on Track

Boab continues to advance environmental and regulatory approvals for Sorby Hills. The company has submitted its final response under the federal Environment Protection and Biodiversity Conservation Act, with formal approval anticipated in the third quarter of 2025. State-level mining and environmental permits are also progressing, with approvals expected in the second half of the year. These regulatory milestones are critical enablers for the planned FID and subsequent project development.

Looking Ahead

With the DeGrussa Processing Plant acquisition secured, a successful capital raise completed, and financing discussions well underway, Boab Metals is well-positioned to advance Sorby Hills towards production. The company’s focus now turns to finalising project financing, completing regulatory approvals, and making the Final Investment Decision in the coming months.