40% rally in the share price of Boab Metals yesterdaya new report out by East Coast Research that appears to have caused the 40% rally in the share price of Boab Metals yesterday. A potential $50 Million saving by purchasing the Degrussa plant from Sandfire Resources is a major development and investors appear to like it.
This effectively positions Boab as an ASX silver play with substantial upside potential.
https://www.sharesinvalue.com.au/wp-content/uploads/2025/05/BML-ECR-Update-Report-02-May-2025.pdf Sorby Hills Gains Momentum with Strategic DeGrussa Plant Acquisition
We resume our coverage of Boab Metals Limited (ASX: BML) with an updated 12- month target price of A$0.57, representing a 370% upside potential to the current share price of A$0.12. BML is focused on developing the Sorby Hills Lead-Silver Project in the tier-1 mining jurisdiction of Western Australia (WA). Sorby Hills has one of Australia’s largest undeveloped, near-surface lead-silver deposits. With the robust economics demonstrated in the Definitive Feasibility Study (DFS) and a subsequent FEED Study, as well as and the projections of solid demand for lead and soaring silver demand and price, we think BML is becoming an increasingly attractive speculative investment opportunity as the company is hitting significant milestones one after another.
DeGrussa Processing Plant acquisition to reduce capex at Sorby Hills
Boab has signed a binding Sale & Purchase Agreement with Sandfire Resources to acquire the DeGrussa Processing Plant for the Sorby Hills Project. This acquisition, priced at A$10.0 million (paid in three tranches), is expected to significantly reduce pre-production capital costs and accelerate development timelines. The plant, previously serving the DeGrussa and Monty Copper-Gold Mines, has been maintained in excellent condition. Boab, with GR Engineering Services, confirmed its suitability for Sorby Hills. The equipment will be integrated into Sorby Hills' process flowsheet, with GR Engineering overseeing the design and competitive tender process for relocation and refurbishment.
Binding offtake agreement with a US$30m prepayment facility in place
In December 2024, BML signed a binding offtake agreement with Trafigura, securing sales of 75% of Sorby Hills' lead-silver concentrate, totalling at least 531,000 tonnes over seven years. This partnership with Trafigura, a leading commodities trader, ensures a reliable revenue stream and highlights the high quality of Sorby Hills' concentrate. The agreement includes a US$30 million prepayment facility, providing immediate liquidity and reducing reliance on equity markets. This facility, with favourable repayment terms, supports Sorby Hills' development without imposing financial strain during early production stages.
Valuation range of A$0.54–0.59 per share
Our DCF-based valuation across base-case and bull-case scenarios yields a target price range of A$0.54-0.59 per share, considerably higher than our last valuation range of A$0.47-0.51 in December 2024, mainly due to the rallying silver prices in the last few months. We see a potential announcement of an FID in 2H CY2025 as the biggest catalyst for a re-rating in the share price towards our valuation range. Our valuation does not take into account the possible value unlocking from non-core assets. The key risks include funding risk, project delays and commodity price risk. We believe the substantial silver deposits at Sorby Hills enhance its appeal significantly due to the bullish outlook for silver prices on the back of the metal’s increasing demand for solar panel manufacturing. Sorby Hills, with one of the largest undeveloped silver deposits in Australia, has also completed advanced feasibility studies. Approximately 30% of its forecasted revenue in the DFS come from silver credits, which rises to 40% at current lead and silver prices.
The DeGrussa Plant Acquisition is imo a big vote of confidence by Sandfire Resources in Boab Metals.
There was a lot of competition for the DeGrussa plant and they chose Boab Metals most likely because they believe BML will reach FID and complete the transaction.
Kudos to Simon Noon for successfully negotiating this deal which is very good news for shareholders and should put the company on the radar of significant investors. #silver #basemetals #lead #index #zinc $bml.ax