Boab Metals Ltd (ASX: BML) today announced it had entered into a contract with GR Engineering Services Ltd (ASX: GNG) for the engineering, procurement and construction at its Sorby Hills silver-lead project in the Kimberley region of Western Australia.
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Working towards production
It's the latest in a long line of milestones the ASX mining company has been ticking off at the project, where it expects to start commercial concentrate production in the second half of 2027.
Boab signed a deal with Sandfire Resources Ltd (ASX: SFR) back in April 2025 to buy the DeGrussa Processing plant, with the deal subject to a number of conditions, including Boab making a final investment decision and gaining regulatory approval for the Sorby Hills mine.
Boab said this week:
On 18 May the Company announced that all conditions precedent to the acquisition had been satisfied and the transaction completed on Friday 22 May 2026. Located in the Meekatharra region of Western Australia, the world-class DeGrussa Copper Mine was built and operated by Sandfire as their flagship project between 2011-2024. The DeGrussa Processing Plant includes a primary crusher, ore storage bin, ball mill, SAG mill, flotation circuit, concentrate and tailings thickeners and an extensive list of new spares all fit-for-purpose for the proposed Sorby Hills process plant flowsheet and sized to achieve the targeted 100ktpa concentrate production rate.
Boab said early engineering works and the ordering of long lead time items had now started for the Sorby project, and "construction teams will be mobilised to the respective sites in the coming weeks''.
Shares looking cheap
Shaw and Partners released a new research note this week on Boab Metals, stating that they had visited the project.
They added:
The early site works are complete, with a key piece of enabling infrastructure, the site-access road, in place. The site camp is under construction and the ground works for the process plant and non-process infrastructure is underway. Early mining activities at the B pit have also commenced where the cover is being removed and used for on-site construction materials. A key take-away from our site visit was the strong support Boab and the Sorby Hills Project are receiving from the local community. Sorby Hills will replace Argyle Diamonds as a key employer in the region.
Shaw said the economics of the project were materially enhanced at the spot silver price compared to the price assumptions used by the company.
Shaw and Partners has a price target of $1.70 on Boab Metals shares, compared with 40 cents currently.
Boab Metals was added to the S&P/ASX All Ordinaries Index (ASX: XAO) at its March 23 rebalance.
