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Boab Metals (ASX: BML) and Yuguang take another step to expedite Sorby Hills project

Source: BML ASX Update, dated 17 February 2021

Summary

  • Boab Metals and Yuguang have agreed to accelerate the Development and Operations Agreement’s finalisation for the Sorby Hills Joint Venture project. 
  • Yuguang holds a 25 per cent interest in the JV and is the largest Lead smelter and Silver producer in China.
  • The advancement of the Development and Operations Agreement will facilitate engagement with potential financiers and progress Sorby hills into development and construction.

Australian explorer Boab Metals Limited (ASX:BML) is firing on all cylinders to advance its Western Australia-based Sorby Hills Lead-Silver-Zinc Project, backed by solid support from its Joint Venture partner, Henan Yuguang Gold and Lead Co., Ltd. 

The joint venture partners, Boab and Yuguang are committed to the growth of Sorby Hills and have agreed to accelerate the finalisation of the Development and Operations Agreement for the project. The agreement would pave the way for Sorby Hills’ advancement into production while also unlocking several attractive market opportunities for the project owners. 

Following the significant update, BML shares edged up by 4.9%, trading at AUD 0.430 on 8 April 2021 (at 3:55 PM AEST)

Earlier, Boab and Yuguang had reaffirmed their commitment to developing the Sorby Hills Project and expressed willingness to work together, ensuring that Sorby Hills is bankable and fully financed. 

ALSO READ: Boab Metals revving up Sorby Hills project to boost shareholder’s value

Strong Collaboration between Sorby Hills Joint Venture Partners

Boab has enjoyed a mutually respectful and rewarding relationship with Yuguang ever since it acquired 75 per cent interest in Sorby Hills in 2018. Yuguang holds a 25 per cent interest in the JV and is the leading Lead smelter and Silver producer in China.

Source: BML ASX Update, dated 17 February 2021

Yuguang has remained both a committed as well as financially contributing JV partner. The collaborative efforts by both the companies have resulted in rapid developments at Sorby Hills during the past three years, which include:

  • A significant uptick in Mineral Resource size and confidence
  • The delivery of a strong Pre-Feasibility Study highlighting the low risk and robust economics associated with the project
  • The commencement of DFS (Definitive Feasibility Study)

The Joint Venture partners have agreed to accelerate the finalisation of a Development and Operations Agreement, which would replace the Exploration Joint Venture Agreement. It, therefore, clearly highlights the commitment of Joint Venture to bringing Sorby Hills into production.

ALSO READ: Export Finance Australia gives a leg up to Boab Metals’ Sorby Hills project

Significant Developments Underpinning Sorby Hills

Boab is engaged in undertaking a flurry of developments to advance the Sorby Hills project. Some of the recent and ongoing developments are proving to be a significant step forward for the project. 

Boab has already engaged with the NAIF (Northern Australia Infrastructure Facility) and EFA (and Export Finance Australia) concerning the potential financing of Sorby Hills. The Company also aims to advance discussions with commercial lenders. 

Source: BML ASX Update, dated 17 February 2021

Simultaneously, Boab is expected to undertake a competitive offtake tender process for its 75 per cent share of the Sorby Hills concentrate production and advance the Development and Operations Agreement with Yuguang. 

Advancing the Development and Operations Agreement will not only assist in facilitating engagement with potential financiers but will also allow a smooth transition from the Definitive Feasibility Study (DFS) into project development and construction.

The Company looks forward to providing further development updates as progress is made towards a Decision to Mine at Sorby Hills.

Boab’s Management Remains Optimistic

Boab Managing Director and CEO, Mr Simon Noon, indicated that the Joint Venture Development and Operation Agreement is an essential aspect of the Company’s progress towards bringing Sorby Hills into production. Meanwhile, the commitment of Boab and Yuguang to advancing the finalisation of the Agreement highlights a further prospect to de-risk Project financing and execution. 

Mr Noon appreciated having a partner of Yuguang’s stature that has continued to provide firm support to the Sorby Hills Project. He indicated that the Company looks forward to progressing the productive Joint Venture relationship as it advances towards project financing and a Decision to Mine at Sorby Hills.


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