Boab Metals (ASX:BML) has exercised its option to acquire privately held Yuguang’s interest in the Sorby Hills Silver-Lead Project in Western Australia, leaving the company to be the sole owner of the project.
The company will pay Yuguang $12.5 million for the remaining 25% of the project, terminating the joint venture on completion.
Boab will then pay a deferred consideration of $5.5 million after one year of concentrate production, and another $5 million 18 months on. Boab intends to conduct first production at the project in H2 2027.
The company will then have the right to sell all of the predicted 897,000 tonnes concentrate to be produced from Sorby Hills, containing 18.6 million ounces of silver and 575,000 tonnes of lead.
The acquisition of Yuguang’s interest follows on from Boab’s final investment decision of Sorby Hills that was completed recently.
CEO Simon Noon says Yuguang has played a “committed” role over the Sorby Hills joint venture, which has lasted over the last seven years.
“Their support during this period has been invaluable to progressing the project to the point where we have been able to make a final investment decision,” Noon says.
“With 100% ownership comes the right to deal with 100% of the concentrate produced at Sorby Hills and greater exposure for our shareholders to the increasing operating margins being driven by a silver price that is more than 100% above what we assumed in our FEED study.”
“Importantly, the funds raised during the quarter have accounted for the completion payment and 100% of the project capex. Therefore, the project remains fully funded.”
As reported by Mining.com.au last week, Boab has opened a share purchase, raising an additional $7 million after conducting a $60 million placement.
Boab Metals is a Western Australian-based exploration and development company focused on advancing the Sorby Hills Project.
Write to Maddison Elliott at Mining.com.au
Images: Boab Metals
