Boab Metals has nominated GR Engineering Services as its preferred process plant engineering, procurement, construction (EPC) contractor for the proposed A$200 million-plus Sorby Hills lead-silver project in Western Australia’s Kimberley region, ahead of its definitive feasibility study due this quarter.
Boab and Chinese 25% joint venture partner, Henan Yuguang, are looking at funding a 50% bigger plant than the 1.5 million tonnes per annum facility in Boab’s 2020 pre-feasibility study. That study outlined a circa-A$180 million upfront cost for developing an openpit mine and infrastructure to support a 10-year operation producing about 50,000tpa lead and 1.5 million ounces pa silver at C1 costs of US40c per pound of lead.
“We would assume capex for a 2Mtpa operation would increase to total A$200-230 million, so a c20% increase in capex for plus-30% improvement in revenue looks attractive, especially on improving [lead] and [silver] prices,” local stockbroker Eurox Hartleys said last month.
Boab said GR Engineering’s tendered price for a 2.25Mtpa-capacity plant would form the basis of capital cost estimates for the DFS, with a commercial agreement and contract to be finalised over the “coming months as Sorby Hills progresses toward a final investment decision”.
Sorby Hills has a current resource base of about 1.5Mt lead and 53Moz silver, from which Boab is working to frame its DFS reserve, to underpin any project scale upgrade.
The company had about $4.6m in the bank at the end of September this year to cover the DFS work.
Boab’s share price is up nearly 74% in the past month at A33c, capitalising the company at more than $50 million.