Clearly BML is struggling to gain financing in the current environment. This update explains how they are looking at improvements to get it over the line. Looks like there will be no change till early 24 so expect SP to fall further. Claiming no CR needed.

On the back of the DFS, Boab ramped up engagement with potential Project financiers including Commercial Banks, Government Agencies, and specialist mining Credit Funds. Discussions with these parties have highlighted the funding challenge facing junior project developers in a high inflation environment and provided Boab with a clear focus to further optimise the Project.

The Company is currently working through the completion, documentation and modelling of the Project optimisation exercise and intends to deliver the results via a Sorby Hills FEED Study to be released to the market in Q1 2024.

The Company retains a cash balance of over A$3 million and is sufficiently funded to complete the ongoing optimisation

Boab Managing Director and CEO, Simon Noon, stated:

“Securing funding for projects in general has been tough within the current economic environment. Boab and Sorby Hills have not been immune from this challenge.

Whilst progress with financiers has not advanced as quickly as we had hoped, the feedback we have received has provided the Company with an opportunity to execute opportunities to enhance economic outcomes and shareholder value.”

BML massaging the figures to get the project over the line. Trying to get ESG improvement by removing the need for diesel back up, cost savings. Negotiations of offtake terms substantially complete but working on financing. FID by end of year?

Front End Engineering & Design and Project Optimisation workstreams progress

o Finalisation of Project Design Criteria, Process Flow Diagrams and, optimised Plant Layout with preferred EPC Contractor GR Engineering Services (“GRES”);

o Re-optimisation of Mining Schedule and Tailings Strategy Update to increase Project cash flows over the initial production years;

o Rationalisation of Contract Packages to realise cost-saving synergies across the mining and bulk earthworks activities; and

o Boab, GRES, and Horizon Power working towards an optimised solution to reduce, and potentially remove, the need for a diesel-fuelled back-up to the grid power delivered from the Ord River Hydro Power Plant.

• Phase VII drill program commenced with 19 diamond holes targeting mine life extensions and enhanced metallurgical recoveries at the Norton Deposit.

• Approvals workstreams progressing with positive determinations anticipated to be received in Q3 ahead of a Final Investment Decision.

Financing and Offtake

Boab continues to progress constructive discussions with potential project financiers of the Sorby Hills Project. In parallel, the lender’s Independent Technical Expert is finalising its review of the Project, including the optimised mining schedule and updated tailings strategy.

Negotiation of offtake terms with multiple Tier-1 counterparties is substantially complete. Boab is now exploring options for offtaker financing with these groups, to work in tandem with senior secured debt.

Timeline to Production

Receipt of EPA amendments approval and EPBC referral outcome, completion of FEED, and awarding of Offtake are all scheduled for completion during Q3 2023, paving the way to finalisation of project financing arrangements and subsequently a Final Investment Decision.

SP has had a significant recovery following a couple of commissioned broker reports with a price target of 75c+ almost 3x current SP. Suggesting a raise at 35c. Received a speeding ticket from ASX. Investor presentation still suggesting offtake agreements and FID Q3.

Held in RL and SM

Further progress on process plant design. FID now Q3 23? Still no mention of offtake agreements.

Boab Metals Limited announce that GR Engineering Services has commenced Front End Engineering & Design for the process plant and associated infrastructure at the Company’s flagship Sorby Hills Lead-Silver-Zinc Project

HIGHLIGHTS

Engineering Services Agreement (“ESA”) executed with GRES to undertake FEED for the Sorby Hills process plant and associated infrastructure.

The ESA includes provision for the tender and early procurement of long lead items.

Work under the ESA is scheduled for completion in Q3 2023, after which the parties intend to enter into an EPC contract and commence full detailed design, subject to a Final Investment Decision (“FID”) on the Project.

BML pumping up the resource with assays from the latest drilling with more to come before the DFS.The headline is strong but the detail more vague.

Phase VI Assay Results Confirm Impressive Grades.

Encouraging drilling results from the Beta Deposit confirm the current mineralisation model and open the prospect for mineralisation extensions.

The most recent Mineral Resource estimate highlighted high-grade zones of mineralisation in the northeast portion of the Norton Deposit that are not included in the Sorby Hills mining inventory (Figure 1). Boab took the view that tighter drill hole spacing in this area may bridge the interpreted continuity gap in the high-grade zone and may enable its inclusion in the future mine plan.

SHRC_143 delivered a significant intercept that can contribute positively to the reserves revision. The significance of the results will depend on the results from the outstanding drill holes completed in the area.

A total of approximately 1,700 drill samples were submitted to Intertek Laboratories in Darwin of which about 65% have been analysed for a broad spectrum of element analysis including Lead, Silver and Zinc.

Further assay results from phase VI drilling expected early in the New Year.

We look forward to providing updates from the remaining samples.”

3Q of funding left, no update on DFS completion date but competitive contract tenders completed. Previous announcement gave a DFS in H2 22 and finalising offtake agreements after. CR to come when that happens.

Drilling of the deep Keep Seismic Target has been postponed to 2023. A total of approximately 1,700 drill samples have been submitted to Intertek Laboratories in Darwin for a broad spectrum of element analysis including Lead, Silver and Zinc.

“The quarter has seen Boab continue to focus on the delivery of project execution workstreams. Securing the camp, and the amendment to the EPA Approval, are both key enablers for the Project. Furthermore, completion of competitive contract tenders sees the company well positioned to rapidly ramp up construction upon a Decision to Mine and, where appropriate, bring forward targeted elements of early works, detailed design and procurement. We are now looking forward to completing our Definitive Feasibility Study and finalising Offtake and Financing workstreams.”

Start of Sorby Hills construction goes to tender

Amendments to the Sorby Hills EPA Approval have been received, a key regulatory prerequisite for the commencement of Site Establishment and Early Works including:

o establishment of all-weather access to the Project;

o development of a materials laydown and hardstand area to facilitate construction of the expanded processing plant and associated infrastructure and construction of an accommodation village at the Project site.

Competitive Tender for the related construction packages will now commence.

Sorby Hills Project Execution Update

DFS delayed to 2H 22 due to Covid but project execution should be on schedule. Market doesn’t like it and down 10% at time of writing.

Competitive EPC tenders received from a suite of highly experienced engineering firms.

• Boab to commence competitive tender process for the Sorby Hills Mining Contract.

• Connection Study underway to firm up engineering and pricing for the transmission of cleaner and cheaper power between the Ord River Hydroelectric Plant and Sorby Hills.

• Major approvals received with respect to the commencement of Site Establishment work at Sorby Hills to allow for ongoing Project development during the wet season.

• Finalisation of the Definitive Feasibility Study expected in 2H 2022 to allow for the incorporation of the above workstreams.

Unfortunately, the spread of COVID in Western Australia has impacted the timely delivery of key DFS inputs, thus necessitating a deferral of its release. While we are disappointed not to be releasing the DFS this quarter as planned, we have decided that, in the current economic environment, it is prudent to take time to seek and incorporate tendered pricing for major capital and operating costs, including our open-pit mining contract, to ensure they are as accurate and competitive as possible.

Importantly, our multi-stream approvals strategy has allowed us to advance to a point where we are confident that we can commence Site Establishment works ahead of the 2022 wet season. Given the ongoing progress of project execution workstreams, completion of the DFS in 2H 2022 should not have a material impact on the Project execution schedule.”

DFS groundwater study that has indicated water flow into the pits will be less than previously anticipated.

Another key aspect of BML feasibility with a Port Access Agreement Executed and offtake agreement update. Looks like they are now not going to announce details until after DFS. The Company is presently completing a Definitive Feasibility Study (“DFS”) on the Project, the results for which are due in early Q2 2022. The Company is targeting a Final Investment Decision on the Project in mid 2022.

Agreement for Access and Stevedoring Service executed with Cambridge Gulf with respect to Wyndham Port, the only deep-water port between Broome and Darwin.

• Term extending to April 2034 with an automatic rollover on a 12 monthly basis thereafter.

• Wyndham Port is located 150km by existing sealed road from the Sorby Hills Project.

Update on the Offtake Tender Process

Boab has received offtake offers that, in total, far in exceed the planned production capacity. Negotiations with a selected range of international traders and domestic smelters have now advanced to the point where detailed offtake terms sheets, including associated debt financing facilities, are being considered and finalised.

The Company has determined that a final decision concerning the placement of production under offtake will closely follow the release of the Sorby Hills DFS. This timing will provide Boab the opportunity to evaluate the offtake terms with the benefit of the DFS results and consider how the proposed offtake debt facilities may sit alongside potential debt facilities from Northern Australian Infrastructure Facility and commercial banks.

Continuing progress towards DFS with expanded resource.

• A 5.6Mt increase (+78%) in Measured Resources versus the Mineral Resource Estimate that underpinned the Sorby Hills Pre-Feasibility Study (PFS).

• Inaugural 1.0Mt Indicated Resource reported for the Beta Deposit. It is anticipated that the Beta Deposit will now form part of the Sorby Hills DFS Mining Inventory where previously it had been excluded.

• Total Resources to 47.3Mt at 4.1% Pb Eq (3.1% Pb, 35g/t Ag) and 0.4% Zn containing 1.47Mt Pb, 53Moz Ag and 0.21kt Zn representing a 14% increase in Measured and Indicated Resources to the PFS Resource, and 5% increase in Total Resources on the same basis.

• Measured and Indicated Resources of 23.6Mt at 4.6% Pb Eq (3.5% Pb, 39g/t Ag) and 0.4% Zn containing 0.8Mt Pb, 0.1kt Zn and 30Moz Ag representing a 14% increase versus the PFS Resource, and a 7% increase versus the April 2021 MRE.

• Increase in Resource Quantity and Confidence expected to have a positive impact on the Sorby Hills Ore Reserve and DFS.

BML Financiers visit site. Continues to show progress towards decision to mine.

Representatives from the Federal Government’s Northern Australia Infrastructure Facility (“NAIF”), together with representatives from a number of Australian and international commercial mining banks, joined Boab management on a two-day site visit of the Sorby Hills Project and surrounding infrastructure including Kununurra township and Wyndham Port, as part of their ongoing due diligence of the Project.

Engagement with Potential Project Debt Financiers
Sorby Hills has passed through the Stage 1 Initial Review of NAIF’s Assessment and Approval process. Boab will continue to work closely with NAIF as they undertake due diligence on the Project in conjunction with the completion of the Definitive Feasibility Study (“DFS”).
In addition to NAIF, Boab has also received a Letter of Support from Export Finance Australia (“EFA”) confirming that, subject to further due diligence and credit assessment, they would consider participating in the project financing of Sorby Hills. 
Projects which boost the ability to extract and process minerals in Australia for export, such as the Sorby Hills Project, may be eligible for support from EFA.
During the June quarter, Boab held meetings with a number of Australian and international mining banks to progress their interest in the Sorby Hills Project. The meetings were well received, and feedback from the banks was very positive and will be incorporated into the DFS and project execution workstreams.