Boab Metals (ASX:BML) has signed a binding offtake agreement with logistics big Trafigura Asia Buying and selling for lead-silver focus produced at its Sorby Hills undertaking, situated in Western Australia.
Below the deal, Boab will obtain a prepayment facility of US$30 million to fund Sorby Hills, topic to sure circumstances.
The prepayment facility will likely be for a 5 12 months time period from the primary drawdown, and can embody an 18 month interest-only interval. It will likely be repaid through equal month-to-month installments over 42 months following the interest-only interval.
In accordance with Tuesday’s (December 10) launch, if monetary shut on the prepayment facility is achieved, the offtake will likely be for 75 p.c, or a minimal of 531,000 tonnes, of the lead-silver focus produced at Sorby Hills.
The offtake will vary from 25 to 50 p.c or better ought to monetary shut not be achieved.
“We’re delighted to have secured help within the type of binding offtake and undertaking financing from a celebration of Trafigura’s calibre,” commented Boab Managing Director and CEO Simon Midday.
“(This settlement) represents a cornerstone of our focused financing plan for Sorby Hills.”
Boab secured a 100 percent interest in Sorby Hills in September by buying a 25 p.c curiosity belonging to its three way partnership companion Henan Yuguang Gold & Lead. The undertaking is situated 50 kilometers from the regional centre of Kununurra within the East Kimberley area of Western Australia, and is being developed as an open-pit mining operation.
Sorby Hills at the moment holds a mineral useful resource of 47.3 million tonnes containing 1.5 million tonnes of lead at 3.1 p.c and 53 million ounces of silver at 35 grams per tonne.
“The chance to safe high-quality focus from the Sorby Hills undertaking is an thrilling prospect for our lead buying and selling e book,” Trafigura mentioned. “We stay up for seeing Boab’s administration workforce deliver this undertaking into manufacturing.”
Boab is on the lookout for different senior lenders to make a ultimate funding determination for the undertaking.
Shares of Boab rose as excessive as AU$0.16 on Tuesday, nearing a peak for 2024.
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Securities Disclosure: I, Gabrielle de la Cruz, maintain no direct funding curiosity in any firm talked about on this article.
