How Boab Metals’ A$236 Million Debt Deal Could Transform Sorby Hills

A Major Financing Milestone

Boab Metals Limited (ASX – BML) has announced a binding commitment for a substantial A$236 million debt facility to fund the development of its Sorby Hills Silver-Lead Project in Western Australia. The financing, provided by Merricks Capital and Davidson Kempner, represents a transformative milestone for the company, enabling it to move decisively towards production.

The debt facility is notable for its clean structure, free from warrants, royalties, or production-linked payments, allowing Boab to avoid shareholder dilution and maintain full exposure to potential silver price upside and project cash flows. This approach reflects a growing preference among mining developers for financing arrangements that balance capital needs with shareholder interests.

Project Progress and Next Steps

With early works already underway at the Sorby Hills site, Boab is advancing the relocation and refurbishment of the DeGrussa Processing Plant, a critical component of the project’s infrastructure. The company expects to announce the results of the tender for this contract shortly, setting the stage for a Final Investment Decision (FID) targeted for the fourth quarter of 2025.

Subject to customary conditions precedent, the debt facility is expected to reach financial close in the first quarter of 2026, with the first drawdown anticipated in the second half of that year. The facility carries a fixed 12% interest rate over a five-year term, with interest-only payments during construction and a structured amortisation schedule thereafter.

Strategic Partnerships and Market Positioning

The involvement of Merricks Capital, an Australian private credit fund manager with deep expertise in mining and infrastructure, alongside Davidson Kempner, a global investment firm with over $37 billion in assets under management, underscores the confidence institutional investors have in the Sorby Hills Project’s potential. Their backing not only provides financial muscle but also signals strong market validation.

Boab’s Managing Director and CEO, Simon Noon, highlighted the significance of this commitment, emphasizing that it positions the company well for the next phase of project execution while preserving shareholder value. The clean debt structure and the absence of equity-like features are particularly attractive in a sector where financing terms can often erode investor returns.

Looking Ahead

As Boab approaches its Final Investment Decision, the market will be watching closely for updates on the processing plant tender and the completion of financing conditions. The successful execution of these steps will be critical to maintaining momentum and delivering on the project’s promise in the East Kimberley region.