BML

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8.7¢ boab metals limited

Big new buy depth. Where'd the sellers go., page-98

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touquoy

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10/04/24

15:33

Post #: 73279807
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Originally posted by hardmano: ↑

toquoy

Here is the highlights of that Shaws article. Not sure how to calculate the share price impact of their suggested US$32 silver expectation.

H

The silver price has lagged this year’s surge in the gold price and the gold/silver ratio has now increased to 90x, well above our long-term assumption and its 20-year average of 70x. The supply/demand fundamentals for silver are supportive for a catch-up rally. Boab Metals Limited (ASX:BML) provides exposure to silver via its Sorby Hills lead-silver-zinc project in WA. Highlights Boab Metals is developing the Sorby Hills Lead-Silver-Zinc Project in the Kimberley Region of Western Australia. In January 2023, Boab released the results of a DFS outlining a A$245m project processing 2.25Mtpa of ore and producing 103ktpa of a lead/silver concentrate over a 10-year mine-life. The annual production of contained metals is expected to be ~67ktpa of lead and 2.2Mozpa of silver. The DFS resulted in an estimated pre-tax NPV of A$370M (at an 8% discount rate), an IRR of 35%, and an average annualised EBITDA of A$119m. The gold price has soared to a record high US$2,236/oz in 2024 due to strong demand from central banks and anticipation of central bank rate cuts later in 2024. The gold price and silver price are historically strongly correlated, with the gold/silver ratio averaging 70x over the past 20 years. The recent gold price rally has left silver behind, and coupled with strong demand for silver for solar panels, there is a case for silver to rally towards US$32/oz this year from its current level of US$24.54/oz. Demand for silver in the production of solar panels has driven the silver market into a supply deficit in 2023. Total annual silver demand has grown from a relatively steady 1,000Mozpa over the past decade to over 1,200Moz in 2023 with further growth expected. Demand for solar panels has increased from around 5% of total demand in 2015 to around 14% in 2023. Silver is the most conductive metal and has excellent reflective properties which make it ideal for solar panels. Sorby Hills other main commodity is lead, which is perhaps the most mis-understood of the base metals. It is a common misperception that demand for lead is falling as lead-acid batteries are replaced by lithium-ion batteries and the usage of lead in industrial applications reduces due to its toxicity. Lead consumption has actually increased by an average 3.2% per…..

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Thanks Hardmano, being very simplistic Sorby Hills producing 2.2 Million ounces of silver per year delivers US$70.4Million profit just from the silver which is effectively produced for free as all costs covered by lead and there would also be profits from the lead at current prices but haven't bothered to do that calc.

BML Price at posting: 16.5¢ Sentiment: Buy Disclosure: Held
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Big new buy depth. Where'd the sellers go., page-98

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