Sorby Hills Project

• Ministerial Statement 1097 (May 27, 2019)
• EPA Report 1632 (April 1, 2019)
• Ministerial Statement 964 (April 2, 2014)
• EPA Report 1491 (16 October, 2013)

Boab Metals Limited commenced its exploration and resource delineation work at its flagship Sorby Hills Project in 2018.  Since then the Company has completed approximately 390 drill holes for just over 32,000m over seven drilling campaigns.

During this time the Company has taken a systematic approach and identified the most value adding opportunities. Mineralisation, continuity, structurally controlled mineralisation and discrete high-grade mineralisation zones were identified as targets.  The targeted approach in exploration drilling paved the way to an increased and robust resource and has allowed the Company to reach several critical milestones towards development.

The aggressive work schedule has served multiple technical purposes and resulted in the release of three progressive mineral resource statements (MRE) and growing ore reserves.

In 2018, Boab Metals Limited (formerly Pacifico Minerals Ltd) commenced Phase 1 of a 12,000m drill program, following the results in March 2019 the Company announced a Mineral Resources Estimate upgrade.

In October 2019, following Phase II drilling the Company delivered a Resource Update.  The resource update underpinned the PFS.

In June 2020 the company provided an updated Mineral Resource Estimate following integration of Phase III drilling.

In December 2021 a Mineral Resource was reported that incorporated the Phase IV and Phase V drilling program assay results. Previously an interim Mineral Resource update incorporating the results of the Phase IV drilling was released in April 2021.  Collectively, the results of the Phase IV and Phase V drilling programs underpinned the Sorby Hills DFS mining inventory.

The most recent Phase VII  drilling program concluded with the completion of 22 drill holes for 2,634m.  The program objectives were achieved with 24% more metres drilled within the planned budget.  See the positive drilling results here.

The drilling confirmed a significant intercept at the Keep Seismic Target where predominately zinc-lead sulphide mineralisation was intersected between 242m and 257m.  The location of the drill hole is around 2km from the closest ore reserves at Sorby Hills.  For more details on the Keep Seismic Target see here.

Figure 1: Plan view of the Sorby Hills Project showing the locations of planned Phase VIII drill hole collars with respect to discovery hole and the Mineral Resource and DFS open-pit outlines.

Figure 2: Location of the Sorby Hills Resources

Figure 3: Detailed view of section and geological interpretation of SHSD_185 and seismic line WP_96-08.

Figure 4: Cross section of the northern extension drilling at Norton.

Phase VIII Drilling Program 

Drilling is underway at the new Keep Discovery within the Sorby Hills Project.  The Phase VIII work program will target the mineralisation model derived from the positive results reported by Boab (PR Nov. ‘23).  Up to 1,500m across 4 drill holes have been planned as an initial stage.

It is expected that the planned drill holes will provide a definitive and conclusive understanding of the significance of the original intercept, the significance of the change in mineralogy in terms of Pb-Zn ratio and whether further lenses of mineralisation can be expected with depth.

The discovery intercept of 9.55m @ 5.10% PbEq in 2023 in SHSD_185 from 242m will be the principal target to follow up.

The Phase VIII drilling program is anticipated to take approximately 4 weeks to complete with assay results targeted for early Q4 2024.

Phase VII Drilling Program 

The Phase VII drilling program concluded with the completion of 22 drill holes for 2,634 metres (an additional 24% of metres drilled than originally planned).  Of the total program 1,434m across 13 holes were drilled for a metallurgical purpose with another 1,200m across 9 holes drilled for resource/reserve expansion and exploratory objectives. See (Figure 1) for collar locations of the completed holes.

Key results included:

SHSD_171: 11.05 m @ 17.63% PbEq (10.98% Pb & 189 g/t Ag) from 81.95m

SHSD_174: 11.60 m @ 20.23% PbEq (8.78%Pb & 325 g/t Ag) from 74.40m

SHSD_164: 6m @ 9.92% PbEq (3.92% Pb & 170g/t Ag) from 101m

SHSD_183: 2m @ 6.85% PbEq (4.43% Pb & 69g/t Ag) from 103m

SHSD_184: 2.8m @ 3.84% PbEq (3.17%Pb & 19g/t Ag from 129m

Keep Exploration Target

A highlight of the Phase VII drilling program included a significant intercept from the maiden hole drilled at the Keep Seismic Target located approximately 2km from the existing Sorby Hills Reserves.

The interpretation of seismic data from petroleum exploration across the Burt Range Sub-Basin resulted in a conceptual drill target – The Keep Seismic Target.  SHSD_185 was aimed at testing the potential for a mineralised feeder fault system which can be seen in the seismic data and the potential for stratiform mineralisation at the Knox Formation/Sorby Dolomite interface. (Figure 3).

Assay results confirmed the significance of the observed mineralisation:

SHSD_185: 9.55m @ 5.10% PbEq (2.59% Pb & 2.26% Zn) from 242.55m

Including 3.12m @ 13.43% PbEq (6.37%) Pb & 6.36% Zn) and 26.5 g/t Ag from 245.36m

The Company is of the view that the initial analytical and geological results at the Keep Seismic Target are a major exploration success proving up concept and importantly the potential of several kilometres of thick sedimentary rocks of the Burt Range Basin to be the source of significantly more base metal mineralisation. Further drilling will be undertaken during the upcoming field season.

Norton North Exploration Drilling

Further exploration success was encountered on the northern periphery of the Norton deposit with drilling of holes SHSD_164 and SHS_183 (Figure 4).  The drill holes intersected mineralisation at the target depth of approximately 100m down hole and add to the confidence of continuity of mineralisation in this area and further confirm the high-grade silver component of the deposits.  The mineralisation remains open to the north.

Norton Metallurgical Drilling

The metallurgical portion of the program was underpinned by the prospect of the spatially restricting or revising upwards recovery factors of ore from Norton and to provide additional core upon which further test work can be undertaken.

The intervals encountered testify to the robustness of the Norton mineralisation with its clean low-iron and high silver values within the mineralisation envelope:

SHSD_171: 11.05m @ 17.63% PbEq (10.98% Pb & 189 g/t Ag) from 81.95m and

SHSD_174: 11.60m @ 20.23% PbEq (8.78% Pb & 325 g/t Ag) from 74.40m

Beta Exploration Drilling

SHSD_184 was drilled at the western periphery of the Beta Deposit to test the continuity of mineralisation.  The hole intersected a noteworthy interval of mineralisation at around 129m below surface:

SHSD_184: 2.80m @ 3.84% PbEq (3.17% Pb & 19 g/t Ag) from 129.0m

• Sorby Hills Front-End Engineering & Design (FEED) Study Results – June 2024
  Following the Sorby Hills Definitive Feasibility Study (“DFS”) released by the Company in January 2023, Boab Metals undertook a Front-End Engineering & Design (FEED) Study.  The results of the FEED Study identified clear opportunities to optimise and de-risk the Project both technically and economically and augment and enhance the DFS. Key Project updates included post FEED pricing for the Process Plant EPC Contract, updated mining schedule bringing forward mining at the high-grade Norton Deposit, updated metal recovery and concentrate grades for the Norton deposit, updated pricing for the Mining and Earthworks Contracts and updated tailings strategy with above-ground tailings disposal being employed for the Life of Mine as opposed to in-pit deposition previously adopted in the DFS. Read the full FEED Study Results here

• Metallurgical Testwork Improves Metal Recovery and Concentrate Grades at the Norton Deposit  – May 2024
  By incorporating the interim results of flotation variability tests from additional post DFS drill core samples the results delivered a 5% increase in Norton Deposit lead recovery from 78% to 83% and confirmed silver recovery at 78%, together with an improvement in concentrate grade from 56.9% Pb to 59.5%Pb.  These results augment and enhance the Sorby Hills Definitive Feasibility Study (“DFS”) released by the Company in January 2023.  The improved metallurgy results confirm the merit of a future reassessment of the Ore Reserve at Norton Deposit via rerunning pit optimisations and open pit design.  Read the full details of the announcement here

• Significants Intercepts at Sorby Hills – November 2023 
  Boab Metals reports assay results from the Phase VII drilling program at the Sorby Hills Lead-Silver-Zinc Project, including a material intercept from the 1st drill hole at the Keep Seismic Target. Read the full announcement here

• Completion of Front End Engineering & Design (FEED) –  August 2023 Completion of Front-End Engineering and Design (“FEED”) resulted in a more detailed process plant design and optimised plant layout. GR Engineering (GRES) provided updated tendered pricing for the process plant based on the FEED outcomes and current raw material and labour costs. The refreshed pricing delivered a result that is consistent with the DFS pricing.

• Heads of Agreement for New Shire Accommodation Facility in Kununurra – July 2023
  Boab Metals announced the execution of a Heads of Agreement with the Shire of Wyndham and East Kimberley (“SWEK”) for the construction and long-term lease of a new accommodation facility within Kununurra, 50km from its 75% owned Sorby Hills Lead-Silver-Zinc Project.  See the full details of the agreement here

• Engineering & Design Commences for Sorby Hills Project – March 2023
  Boab Metals announces GR Engineering (GRES) has commenced Front End Engineering (FEED) for the process plant and associated infrastructure at the Company’s flagship Sorby Hills Lead-Silver-Zinc Project. To find out more read here

• Definitive Feasibility Study (DFS) – January 2023
  Boab Metals reached a major milestone and delivered the Sorby Hills Definitive Feasibility Study (DFS) with encouraging results.   The DFS demonstrated strong pre-tax economics including the A$705M net cash flow, NPV of A$370M, IRR of 35% and an average annualised EBITDA of A$119M. The open pit production target is estimated to be 18.3 million tonnes at an average grade of 3.4% lead and 39g/t silver.  Read the full DFS announcement here.

• EPA Approval Received for Site Establishment and Early Works at Sorby Hills – July 2022
  Boab receives approval from the Western Australian Environment Protectional Agency (EPA) to commence site establishment and Early Works at the Sorby Hills Lead-Silver Project.  Read the full details of the announcement here

• Heads of Agreement Executed with Horizon Power – April 2022
  A Heads of Agreement with Horizon Power in respect to a future Power Purchase Agreement was executed in April 2022.  The agreement will allow for cleaner and cheaper energy to be delivered to the Sorby Hills Project.  The Ord River hydroelectric plant will provide the majority of the energy demand with an on-site diesel plant to provide 100% back-up power.  To find out more read here

• Port Access Agreement Executed –  March 2022
  An agreement for Access and Stevedoring Services was executed with Cambridge Gulf with respect to the Wyndham Port.  The term extends to 2034 with an automatic rollover on a 12 month basis thereafter.  The agreement is a critical element of the path to market for the concentrates that will be produced at Sorby Hills and shipped to customers. To find out more read here

• Expanded Resource to Underpin Sorby Hills DFS – December 2021
  Boab Metals announces a Mineral Resource update that incorporates the results of the Phase IV and Phase V drilling programs.  The updated Mineral Resource Estimate represents a significant milestone in the development of the Sorby Hills Lead-Silver Project. Read the full Mineral Resource Update here.

• DFS Metallurgical Testwork Results – November 2021
  Boab Metals presents the comprehensive results of the DFS Metallurgical Testwork Program undertaken on the Sorby Hills Lead-Silver-Zinc Project. The recovery uplift resulting from separated ore versus blended ore processing is encouraging and will have a positive impact on the Project economics. Read the full DFS Metallurgical Testwork Results here.

• Strategic Acquisition of Zinc-Silver-Lead Project – July 2021
  Boab Metals announced the acquisition of the strategically located Manbarrum-Zinc-Lead-Silver Project located in the Northern Territory, located 25km east of the Company’s flagship Sorby Hills Lead-Silver-Zinc Project. Mineral Resources are declared at two prospects within the Manbarrum Project Area. Read the full Manbarrum acquisition announcement here.

• Pre-Feasibility Study (PFS) – August 2020
  Boab Metals (formerly Pacifico Minerals Limited ASX:PMY) presented the results of the Sorby Hills Pre-Feasibility Study and Ore Reserve Statement.  The outstanding economic outcomes delivered strong pre-tax economics with a pre-tax NPVZ8 of A$303M generating an IRR of 46% with a payback period of approximately 1.6 years and a Pre-tax Life of Mine Net Operating Cash Flow of A$747M or approximately A$75M per annum.  The PFS base case (“Whole Ore”) Production Target mines 14.7Mt (circa 92% Measured and Indicated, 8% Inferred) at an average grade of 3.6% Pb and 39 g/t Ag.   Read the full PFS announcement here

• Mineral Resource Update at the Sorby Hills Lead-Silver-Zinc Project – June 2020
  Boab Metals announces a Mineral Resource update at the Sorby Hills Lead-Silver-Zinc Project following the Phase III drilling program.  The updated resource allows for the conversion of a significant portion of the M&I Resources to Probable and proven reserves. Read the full Mineral Resource Update here.

• Ministerial Confirmation Received for Five Year Extension for Sorby Start-Up – May 2019
  Boab Metals (formerly Pacifico Minerals Limited ASX:PMY) received ministerial confirmation from the Environmental Protection Authority (EPA) to allow for the timeframe for the substantial commencement of the Sorby Hills Lead-Silver Project to be extended for a further 5 years to 2 April, 2024.  Read the full announcement here

• EPA Recommends Five Year Extension for Sorby Start-Up – April 2019
  Boab Metals (formerly Pacifico Minerals Limited ASX:PMY) received Report 1632 form the Western Australian Environmental Protection Authority (EPA) regarding a recommendation to allow for the extension for the timeframe for substantial commencement at the Sorby Hills Lead-Silver-Zinc Project.  Read the full details of the announcement here

Figure 1 - Location Of The Sorby Hills Project with respect to Boab's other 100% owned Lead Silver-Zinc exploration assets in the region.

Following the Definitive Feasibility Study (“DFS”), the Company identified clear opportunities to optimise and derisk the Sorby Hills Project both technically and economically. The Company pursued opportunities in conjunction with completing Front-End Engineering & Design (FEED) on the Process Plant with GR Engineering which delivered a material improvement to the Project.

In June 2024 Boab Metals released the results of the FEED Study.

The Key Highlights included:

• Strong pre-tax economics including A$778M net cash flow, NPV₈ of A$411M, IRR of 37% and an average annualised EBITDA of A$126M.
• High confidence study with up to date tendered pricing.
• C1 cash cost of US$0.36/lb payable Pb (including a net Silver credit of US$0.37/lb payable Pb).
• Open Pit Mining inventory of 18.3Mt at an average grade of 3.4% Lead and 39g/t Silver.
• Production Target underpinned 83% by Ore Reserves.
• 2.25Mtpa capacity conventional flotation Process Plant producing an average of 103ktpa of Lead-Silver concentrate containing 64kt of Lead and 2.0Moz of Silver.
• Pre-production Capital Cost of A$264M underpinned 75% by tendered pricing.
• Significant pre-production upside potential.

Importantly the net change to pre-production Capital Expenditure is limited and project pre-tax cashflows over the the initial 5 years of production have improved by +A$150M providing  stronger profile to support debt financing.

A$264m preproduction Capex is underpinned 75% by tendered pricing.

A high level comparison of the DFS and FEED Study base case results and the impact of adopting current macroeconomics (“Spot Case”) is shown in (Table 1).

Table 1: Comparison of FEED Study Results with the DFS 

Table 2: Sorby Hills Mineral Resource Estimate – Pb Domains only.

Note: Tonnes and Grade are rounded. Reported at a 1.0% Pb Cut-Off. Discrepancies in calculated Contained Metal is due to rounding.

Figure 1 - Location Of The Sorby Hills Project

In January, 2023 Boab Metals released the results of the Sorby Hills Definitive Feasibilty Study (“DFS”).

Highlights of the DFS included:

• A$705M net cash flow, NPV8 of A$370M, IRR of 35% and an average annualised EBITDA of A$119M.
• Pre-production Capital Cost of A$245M.
• C1 cash cost of US$0.39/lb payable Pb (including a net Silver credit of US$0.38/lb payable Pb) delivering an average operating margin of 41%.
• High-confidence study with up-to-date tendered pricing for 75% of Capital Costs.
• An updated Mineral Resource Estimate by CSA Global achieving a 78% increase in Measured Resources.
• Production Target underpinned 83% by Ore Reserves, including a 12% increase in overall Reserves and a 53% increase in Proved Ore Reserves.
• Significant pre-production upside potential.

The Sorby Hills DFS was completed against a dynamic economic backdrop and achieved a result that largely withstood the impact of global inflationary pressure.  Approximately 75% of the pre-production capital expenditure and direct mining costs were underpinned by current tendered pricing, thus minimising the risk of substantial cost increases as has been evident in other mining projects.

Over the initial 8.5-year processing period contemplated by the DFS, 18.3Mt of ore will be mined and processed through a simple crush-mill-flotation circuit at an initial rate of 1.5Mtpa expanding to 2.25Mtpa after 1 year of production. Concentrate will be produced at an average 103ktpa, containing 64ktpa of payable Lead and 2Moz p.a. of payable Silver, and transported ~150km by road in sealed half-height containers to Wyndham Port from where it will be shipped to market (Figure 1).

The Project generates A$705M of pre-tax free cash flow over the Life of Mine and an average annualised EBITDA of A$119M per annum during operations (Table 1). Pre-production capital expenditure is estimated at A$245M and net C1 Cash Costs have been calculated to be US$0.39/lb payable Lead (Table 2). The Project generates a pre-tax NPV8 of A$370M and an IRR of 35% (from the start of construction) and a payback period of 2.5 years (from start of production).

Boab is of the view that the DFS represents just the starting point for the future of its Lead-Silver operations in the East Kimberley region. The Company has a number of opportunities to increase mine life through a combination of exploration and Resource extension drilling programs which are either already in progress or planned for when mine development occurs across the Project.

Key opportunities include:

• Sorby Hills Mineral Resource and Production Target Development – Potential to improve Mineral Resource Estimate and production target as a result of the final Phase V drilling results and the Phase VI drilling that have not yet been incorporated into the Resource model.
• Norton Deposit Metallurgy – Potential to improve metal recoveries at Norton with additional testwork across the deposit.
• Backup Power Review – Potential to reduce the size of the backup diesel power station to further reduce the cost of power supply. Discussions have commenced with Horizon Power.
• Improved Mining Costs – Investigate opportunities that have come to light late in the process of the DFS to improve the mining costs by adopting a bespoke pricing methodology.
• Further Review of Tendered Pricing – Contracts formally tendered during the DFS were done so at a time considered to be at the height of the inflation curve in the West Australian mining and construction industry. The Company considers there to be a lot of upsides to be gained on the prices already received through workshops and strategy sessions with key proponents.
• Road Haulage – The base case for haulage of concentrate in the DFS is non-concessional loading. Investigations are underway to determine if approval for concessional loading can be obtained, meaning an increased payload in each container.

Table 1: Sorby Hills DFS – Life of Mine Metrics

Macroeconomic assumptions for Lead, Silver and FX were based on the forward curves extracted from Bloomberg on 16 January 2023.

Table 2: Operating Cost Summary

The primary objective of the DFS Metallurgical Testwork Program was to deliver robust results to underpin the Sorby Hills DFS Process Plant design criteria.

The program comprised a total of 35 HQ diamond drill holes included in the Phase IV and V drilling. From these holes, approximately 1,420kg from 399m of half core was collected, combined and composited into Variability Samples, Schedule Composites and Master Composites. Samples and Composites were utilised for a range of testwork including Flotation, Comminution, Mineralogy, Heavy Liquid Separation, Tailings Thickening, Concentrate Filtration and Concentrate Analysis.

The DFS Metallurgical Testwork Program builds upon a significant body of previous metallurgical testwork undertaken by SMPL since acquiring Sorby Hills in 2018 and others dating back to 1979.

Master Oxide, Fresh and Blended composites were produced for initial flotation optimisation. A total of 34 samples exhibiting a range of head grades, mineralogical compositions and source locations were prepared as Variability Samples. Scheduled-based composites were made to represent the PFS mine schedule for years 1-2, 3-4 and 5+, for each of the Oxidised, Fresh and Fresh-Oxidised Blend ore types. Lower-grade sample material was selected for HLS testing (See Table 1 below).

Table 1: DFS Metallurgical Testwork Program – Sample Summary

Metal recoveries adopted for economic modelling for the Sorby Hills Pre-Feasibility Study were Lead: 94.9% (Fresh Ore) and 84% (Oxidised Ore) and Silver: 78.2% (Fresh Ore) and 94.4% (Oxidised Ore).

Table 2 below presents a summary of the final Sorby Hill DFS Flotation performance estimates. Recovery estimates are based on the Schedule Composite test results, and for the specific deposit estimates, the average Variability Sample test performance for that deposit. These results incorporate modifications based on Locked-Cycle testwork to account for closed circuit performance estimation and, in the case of separate Oxidised and Fresh Ore-only recoveries, adjustments to account for operational inefficiencies associated with campaign-style processing.

Whilst the extensive variability testwork has identified the recovery achieved at Norton was less than that at other deposits, superior results in selected Norton Variability Samples suggests the poorer results are spatially constrained and that the higher performing ore within Norton can be prioritised.

A comprehensive assay was undertaken on Lead-Silver Concentrate produced from each locked cycle test. The results of these assays have been provided to potential offtakers.

Table 2: Sorby Hills DFS Final Flotation Performance Estimates

The DFS Metallurgical Testwork Program further explored Dense Media Separation (DMS). The DFS results for the DMS demonstrated a reduced recovery and highlighted additional process design and operation risk. Therefore, the DMS option is not recommended and was not considered further for DFS.

Flowsheet and Plant Design

Process Flow Diagram[/caption]The Sorby Hills process plant is designed to treat 2.25Mtpa of ore. In the initial year of operation while head grade is at its highest the process plant throughput rate is at a nominal 1.5Mtpa. This processing rate profile maintains concentrate production as the grade reduces after the first year. Comminution and flotation circuit equipment sizing has been based on providing the required “turn-down” ability to operate at the lower initial throughput capacity. A high-level process diagram is presented below. The design of the processing facilities has been undertaken in accordance with the following philosophy:

• A simple and robust flowsheet using well established methods;
• Well proven equipment;
• Ease of maintainability;
• Best practice OHS&E protection;
• Ten-year life operating continuously 24 hours per day, 365 days per year; and
• An overall plant availability of 91.3% or 8000h/yr.