Boab Metals (ASX:BML) has signed a binding offtake agreement with logistics giant Trafigura Asia Trading for lead-silver concentrate produced at its Sorby Hills project, located in Western Australia.
Under the deal, Boab will receive a prepayment facility of US$30 million to fund Sorby Hills, subject to certain conditions.
The prepayment facility will be for a five year term from the first drawdown, and will include an 18 month interest-only period. It will be repaid via equal monthly installments over 42 months following the interest-only period.
According to Tuesday’s (December 10) release, if financial close on the prepayment facility is achieved, the offtake will be for 75 percent, or a minimum of 531,000 tonnes, of the lead-silver concentrate produced at Sorby Hills.
The offtake will range from 25 to 50 percent or greater should financial close not be achieved.
“We are delighted to have secured support in the form of binding offtake and project financing from a party of Trafigura’s calibre,” commented Boab Managing Director and CEO Simon Noon.
“(This agreement) represents a cornerstone of our targeted financing plan for Sorby Hills.”
Boab secured a 100 percent interest in Sorby Hills in September by acquiring a 25 percent interest belonging to its joint venture partner Henan Yuguang Gold & Lead. The project is located 50 kilometers from the regional centre of Kununurra in the East Kimberley region of Western Australia, and is being developed as an open-pit mining operation.
Sorby Hills currently holds a mineral resource of 47.3 million tonnes containing 1.5 million tonnes of lead at 3.1 percent and 53 million ounces of silver at 35 grams per tonne.
“The opportunity to secure high-quality concentrate from the Sorby Hills project is an exciting prospect for our lead trading book,” Trafigura said. “We look forward to seeing Boab’s management team bring this project into production.”
Boab is looking for other senior lenders to make a final investment decision for the project.
Shares of Boab rose as high as AU$0.16 on Tuesday, nearing a peak for 2024.
Don’t forget to follow us @INN_Australia for real-time news updates!
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
Credit: Source link
