Lead-silver developer Boab Metals (ASX:BML) is preparing to add scale to its Sorby Hills project in WA’s north, with “high impact” targets in its crosshairs in a major drilling campaign.
Its fifth phase of drilling follows a successful fourth phase that saw a 56 per cent jump in mineral resources on top of those used for an eye-catching PFS last year.
The 48-hole, 4200m campaign will zero in on deposits near its proposed open pit design with the focus on extending mine life and production capacity ahead of a milestone DFS due in early 2022.
Leading to market
Sorby Hills has captured attention as one of a handful of Australian lead projects being prepped for market.
Located in WA’s Kimberley region, last August’s PFS showed the mine could operate for 10 years, producing 81,000 dry tonnes of 62% lead-silver concentrate annually at a build cost of $183 million.
Sorby Hills would churn out 50,000t of recovered lead and 1.5Moz recovered silver per annum, generating an average of $75m a year in EBIDTA.
At assumed lead prices of $2095/t and silver prices of $21.10/oz, that would pay back its owners in 1.6 years.
Those are below current prices, which have been driven higher in recent weeks along with other industrial base metals.
But exploration upside has already shown the potential for Boab to increase the scope of its joint venture with Chinese lead smelter Yuguang.
A new mineral resource estimate of 44.9 million tonnes at 3.2 per cent lead, 37 grams per tonne silver and 0.5 per cent zinc pointed to the prospects of an even larger development being unveiled in its upcoming DFS.
That upside had Sydney research equity house Rawson Lewis recently place a 73 cent valuation on Boab shares, with a target of 85 cents, about twice its current trading value.
The current campaign will see Boab venture beyond the existing Sorby Hills resource, drilling down on prospective targets it has yet to touch in the three years Sorby Hills has been on its books.
The headliners are the zinc and silver rich Alpha and Beta deposits, which if successful could deliver credits to its primary lead product.
Alpha boasts a steep south-east sloping ore body with a known inferred mineral resource of 1.3 million tonnes at an estimated zinc grade of 4%.
Silver grades of more than 60 grams to the tonne also help bolster resources at Alpha and Beta to 2Mt at a 5%PbEq and 3.3Mt at 6.3%PbEq respectively.
With an overall lead equivalent grade of 4.3 per cent across the current Sorby Hills resource it is little wonder this has piqued Boab’s interest.
The deposits have been on the backburner because they sat outside the project’s approved environmental development envelope, but according to the company represent ‘low-risk’ add-ons to the proposed operation.
But wait, there’s more …
Boab also has diamond drilling for its earlier stage Wildcat target as well as regional exploration at its recently acquired and wholly owned Eight Mile Creek project on the cards.
“With our metallurgical and geotechnical drilling complete, a current mine plan underpinned 92% by reserves and nearly A$14M in cash on hand, we are in a great position to aggressively focus drilling metres toward adding tonnes and grade to our Sorby Hills mining inventory and testing the blue-sky perspectivity of our Eight Mile Creek Project,” Boab MD Simon Noon said.
“We look forward to providing updates as the Phase V drilling program progresses.”
This article was developed in collaboration with Stockhead, an advertising partner of Boab Metals at the time of publishing. For further information and to review the original article click here. This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.