Boab Metals Targets $1.06B NPV as Sorby Hills Silver Mine Construction Advances
Key Takeaways
- Construction is underway and tracking on budget, with A$56 million (21% of total capex) already spent and the majority of remaining A$205 million covered by fixed-price EPC contracts.
- The base case pre-tax NPV₈ stands at A$1.06 billion with a 97% IRR; the forward-curve pricing case delivers approximately A$1.7 billion in life-of-mine free cash flow.
- Mine life has extended from 8.5 to 10.5 years following the acquisition of the DeGrussa Processing Plant from Sandfire Resources and a 20% increase in Ore Reserve tonnage to 18.3Mt.
- Norton metallurgical optimisation lifted lead recovery to 88.4% and silver recovery to 83.3%, strengthening early cash flows as Norton ore is prioritised in the mine schedule.
- Boab has secured over A$350 million in debt and equity funding, a binding 50% offtake agreement with Trafigura, and all primary regulatory approvals — construction is fully permitted.
Sorby Hills construction underway as project economics strengthen
Boab Metals Limited has released a comprehensive Project Delivery Plan for its 100%-owned Sorby Hills Silver-Lead Project, marking what Managing Director and CEO Simon Noon describes as a decisive transition from development into delivery. The base case pre-tax NPV₈ stands at A$1.06 billion with an IRR of 97%, while the forward-curve pricing case delivers approximately A$1.7 billion in life-of-mine free cash flow.
Two pricing scenarios underpin the economics. The Spot Prices case (as at 10 September 2026) generates a pre-tax NPV₈ of A$821 million and an 86% IRR. The Base Case, using forward-curve silver pricing and CRU lead prices, delivers the A$1.06 billion NPV₈ and 97% IRR noted above. First concentrate production is targeted for the September Quarter, 2027, with A$205 million in remaining capital expenditure (including a A$17 million contingency).
Key project metrics at a glance:
- Mine life: 10.5 years (extended from 8.5 years)
- Average annual silver production: 2.1Moz
- Average annual lead production: 60kt
- Average annual EBITDA (base case): A$184 million
- C1 cash cost (base case, incl. credits): US$2.80/oz payable silver
Simon Noon, Managing Director and CEO
“Sorby Hills has now moved decisively from development into delivery. The Project is fully funded, construction is underway and we have a clear pathway to first concentrate production targeted for June 2027. Since completion of FEED, we have continued to strengthen the Project through mine plan optimisation, improved metallurgical recoveries, infrastructure optimisation and the acquisition of the DeGrussa Process Plant, extending mine life from 8.5 years to 10.5 years while reducing capital, schedule and execution risk.
The results demonstrate the value of this work, with the forward-curve pricing case delivering a pre-tax NPV₈ of approximately A$1.06 billion, a 97% IRR and approximately A$1.7 billion in life-of-mine free cash flow, with A$205 million of capital remaining to complete the Project…”
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Construction milestones reached on time and on budget
Approximately A$56 million (21% of total capital expenditure) has been incurred with the project tracking on budget. The majority of the remaining A$205 million is covered by fixed-price EPC contracts, including the Process Plant and Bulk Earthworks packages, providing a high degree of cost certainty.
The construction status across key packages is summarised below.
| Package | Status | Completion | Planned Date |
|---|---|---|---|
| Early Works | Complete | 100% | — |
| Accommodation Village Stage 1 | Complete | 100% | — |
| Accommodation Village Stage 2 | Well Advanced | 95% | — |
| Diesel Supply Contract | Complete | 100% | — |
| Bulk Earthworks Package | Underway | 60% | — |
| Non-Process Infrastructure | Underway | 30% | — |
| Processing Plant Package | Underway | 14% | — |
| Thermal Power Station | Procured | 30% | — |
| Mining Mobilisation | Planned | — | Q1 2027 |
| Site Water Reticulation | Planned | — | Q1 2027 |
| Main Power Connection | Planned | — | Q1 2028 |
Dismantling of the DeGrussa Processing Plant at its original Midwest Western Australia location is forecast to complete by 30 September 2026, while foundations for its reconstruction at Sorby Hills are currently being poured. Site photographs included in the announcement show the main access road constructed, the mine camp operational, tailings storage facility construction underway, and the primary crusher foundation concrete pour in progress.
What is a silver-lead concentrate operation, and why does cost structure matter?
Sorby Hills will produce a lead-silver concentrate through conventional open-pit mining and flotation processing. The concentrate is then transported approximately 159 km by road train to Wyndham Port in sealed half-height containers, loaded onto Handy-class vessels, and shipped to international smelters. The logistics chain is: mine site, road train to Wyndham Port, Handy-class vessel, international smelter.
The project’s cost structure is what makes the economics particularly compelling for silver-price leverage. The C1 cost before credits is US$58.4/oz of payable silver. After net lead credits of US$55.6/oz, the net C1 cash cost falls to just US$2.80/oz payable silver. In practical terms, lead production is expected to cover the project’s full operating cost base, effectively delivering silver revenue as additional margin. With silver priced at approximately US$71/oz as at 10 September 2026 (per the forward-curve assumptions in Table 13 of the Project Delivery Plan for FY2027), that margin is substantial.
For readers unfamiliar with NPV₈: a net present value discounted at 8% per annum is a standard measure of a project’s worth in today’s dollars, accounting for the time value of money. An NPV₈ of A$1.06 billion means that, after applying that discount rate to all projected future cash flows, the project is expected to generate A$1.06 billion of value above the cost of investment.
Upgraded ore reserve and improved metallurgy underpin stronger economics
The updated Ore Reserve stands at 18.3Mt at 37.3g/t silver and 3.2% lead, representing an approximately 20% increase in tonnage compared with the 2022 reserve, with 15% more contained silver and 10% more contained lead. The Production Target has increased to 22Mt, containing 26Moz of silver and 690kt of lead, an increase of approximately 3.7Mt, 3.5Moz of silver, and 64kt of lead from the prior target.
The Sorby Hills Mineral Resource Estimate now stands at 50.6Mt, a 7% increase driven by 305 new assays at Norton and a revised NSR domaining methodology that unlocked previously excluded silver-rich mineralisation, with Phase IX drilling results not yet incorporated representing additional upside.
The acquisition of the DeGrussa Processing Plant from Sandfire Resources in April 2025 is a key driver of these improvements. Repurposing an existing, proven processing facility has reduced capital cost escalation risk and procurement bottlenecks, and has extended mine life from 8.5 to 10.5 years.
A further technical uplift comes from Norton metallurgical optimisation. Phase 2 flotation optimisation testwork completed in August 2026 improved Norton lead recovery from 83% to 88.4% and silver recovery from 78% to 83.3%. This strengthens early cash flows, as Norton ore is prioritised in the mine schedule.
| Metric | Previous (FEED) | Project Delivery Plan | Change |
|---|---|---|---|
| Ore Reserve tonnage | 15.2Mt | 18.3Mt | +20% |
| Contained silver | 19.1Moz | 22.0Moz | +15% |
| Contained lead | 531kt | 581kt | +10% |
| Norton lead recovery | 83% | 88.4% | +5.4 ppts |
| Norton silver recovery | 78% | 83.3% | +5.3 ppts |
| Mine life | 8.5 years | 10.5 years | +2 years |
Implementation of the optimised Norton flowsheet, which incorporates an additional pyrite rougher flotation stage and a concentrate regrind circuit, will require approximately A$5 million in additional capital expenditure (±30%), deferred to 2029 ahead of Norton ore treatment.
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Funded, contracted, and export-ready
Boab has secured over A$350 million in debt and equity funding to deliver Sorby Hills through to commercial production. On 27 April 2026, the company executed a Syndicated Facility Agreement with Merricks Capital and Adare Finance DAC (Davidson Kempner), comprising an AUD tranche of A$118 million (including a A$5 million cost overrun facility) and a USD tranche of US$84.4 million (including a US$3.6 million cost overrun facility). First drawdown is expected in Q4 2026.
Fifty percent of the debt is denominated in US dollars, matched by USD concentrate revenues from sales, creating a natural foreign exchange hedge that eliminates the need for FX hedging during operations on that portion of the facilities.
On the offtake side, Boab executed a binding agreement with Trafigura Asia Trading Pte. Ltd. on 10 December 2024 for 50% of the silver-lead concentrate produced from Sorby Hills. Expressions of Interest have been issued for the remaining 50% of the silver-lead concentrate produced from its Sorby Hills deposit during the first two years of production, with negotiations expected to commence in Q4 2026. Port access is secured via a 10-year Agreement for Access and Stevedoring Services with Cambridge Gulf at Wyndham Port.
All primary regulatory approvals have been received, including under the federal EPBC Act, the WA EP Act, and the WA Mining Act. Construction is permitted and underway.
The de-risking checklist for investors:
- All primary approvals received — construction permitted and underway
- Over A$350 million in debt and equity funding secured
- Binding offtake executed with Trafigura for 50% of concentrate
- Majority of remaining capex covered by fixed-price EPC contracts
- Proven DeGrussa Processing Plant acquired and being relocated to site
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