Boab Metals Limited has released its Project Delivery Plan for the 100%-owned Sorby Hills Silver-Lead Project located in Western Australia's Kimberley region, marking a significant transition from development to active construction and delivery phase. The updated project economics demonstrate substantial improvements over previous studies. Under the base case scenario using forward-curve pricing, the project delivers a pre-tax net present value of A$1.06 billion at an 8% discount rate, with an internal rate of return of 97% and life-of-mine free cash flow of approximately A$1.7 billion.
Under spot price assumptions as of 10 September 2026, the project shows a pre-tax NPV of A$821 million with an 86% IRR. Key operational metrics show an average annual EBITDA of A$184 million and a C1 cash cost of US$2.80 per ounce of payable silver, inclusive of lead credits. The project targets average annual production of 2.1 million ounces of silver and 60,000 tonnes of lead per annum, with mine life extended to 10.5 years from the previous 8.5-year estimate.
Construction is progressing on schedule and on budget. Approximately A$56 million representing 21% of total capital expenditure has been incurred to date, with A$205 million remaining to achieve commercial production targeted for the third quarter of 2027. The company has secured over A$350 million in debt and equity funding through a syndicated facility agreement, providing full funding through construction and commissioning.
The expanded Sorby Hills Mineral Resource Estimate now supports a life-of-mine production target of 22 million tonnes containing 690,000 tonnes of lead and 26 million ounces of silver. The updated Ore Reserve has increased to 18.3 million tonnes at 37.3 grams per tonne silver and 3.2% lead, representing a 15% increase in contained silver and 10% increase in contained lead compared to previous estimates. A significant project advantage stems from the acquisition and repurposing of the DeGrussa processing plant from Sandfire Resources, which reduces capital requirements, procurement risks, and construction timelines while providing greater cost and schedule certainty.
The plant is being relocated over 1,500 kilometres from Western Australia's Midwest region to the Sorby Hills site in East Kimberley. Metallurgical improvements at the high-grade Norton deposit have been identified through additional testwork, with potential to increase lead and silver production during the initial years of operation. Mine schedule optimization has been completed to bring forward higher-value production, accelerating early cash generation and reducing ramp-up risk.
Sorby Hills benefits from a favorable cost structure where lead production is expected to cover operating costs, effectively delivering free silver production. This provides substantial exposure to silver price movements, with higher silver prices translating into additional operating margins and free cash flow. First concentrate production is scheduled for the second half of 2027, with the project targeting approximately 110,000 dry metric tonnes of lead-silver concentrate per annum at steady-state operations.
The company has executed a binding offtake agreement with Trafiura Asia Trading for 50% of concentrate production, with negotiations underway for the remaining 50%. The project has received all primary approvals to commence construction and mining, including approval under the federal Environment Protection and Biodiversity Conservation Act and relevant Western Australian approvals. A Memorandum of Understanding is in place with the Miriuwung Gajerrong people, the traditional owners, outlining employment, contracting opportunities, and other benefits from the project.
According to the source material, the project represents Australia's largest undeveloped, near-surface lead-silver deposit, positioned to become a long-life Australian silver-lead operation with further value potential through resource and reserve growth, continued optimization, and significant exposure to silver markets.
Source: company-announcements.afr.com