Sorby Hills Project Faces Critical Contract Finalization Amid Cost Savings

Capital Cost Savings Drive Project Momentum

Boab Metals Limited (ASX – BML) has announced a substantial reduction in upfront capital costs for its Sorby Hills Lead-Silver Project in Western Australia. The company expects to save at least A$25 million, combining a minimum A$20 million cut from the Processing Plant tender and an additional A$5 million from efficiencies in Early Works. These savings come at a critical juncture as construction inflation continues to challenge mining developments globally.

The key driver behind the cost reduction is the decision to relocate, rebuild, and refurbish the DeGrussa Processing Plant, a world-class facility previously operated by Sandfire Resources. By leveraging this existing infrastructure and its extensive inventory of new spares valued at approximately A$8 million, Boab Metals is avoiding the higher costs and risks associated with building a new plant from scratch.

Accelerated Timeline Enhances Project Economics

Alongside the capital savings, the construction timeline is expected to shorten by six months. This acceleration not only reduces capital carrying costs but also allows Boab Metals to bring the Sorby Hills project into production earlier, unlocking revenue sooner. The company is currently finalizing contracts with shortlisted contractors and anticipates executing agreements by January 2026, paving the way for a Final Investment Decision in the near term.

Early Works on site have also progressed efficiently, with civil design, site establishment, and bulk earthworks delivering cost savings and keeping expenditure well below budget. These combined factors materially improve the project's development economics, reinforcing the robust financial outlook presented in the June 2024 Front-End Engineering & Design (FEED) Study.

Financing Secured and Strategic Positioning

Boab Metals has secured a binding commitment for a A$236 million debt facility, providing the necessary financial backing to advance Sorby Hills towards production. This milestone, coupled with confirmed capital cost reductions and a shortened schedule, positions the company strongly for its upcoming Final Investment Decision.

Located 50 kilometres from Kununurra in the East Kimberley region, Sorby Hills benefits from existing sealed road infrastructure facilitating concentrate transport to Wyndham Port. The project’s economics are further supported by a historically stable lead price and a silver price currently trading at more than double the FEED Study assumptions, enhancing potential free cash flow.

Outlook and Market Implications

Boab Metals’ strategic approach to utilising the DeGrussa Processing Plant and delivering Early Works efficiencies exemplifies prudent project management amid a challenging inflationary environment. Investors will be watching closely as the company moves towards contract finalization and the Final Investment Decision, which will be pivotal in confirming the project's trajectory and unlocking shareholder value.