PERTH (miningweekly.com) – A scoping study into the Abra base metals project, in Western Australia, has confirmed the project to be economically and technically robust, ASX-listed Galena Mining said.
Based on an annual throughput of one-million tonnes, the project is expected to deliver 91 000 t/y of lead and 450 000 oz/y of silver over an initial mine life of 11 years.
Opportunities have already been identified to extend the mine life beyond the initial 11 years, Galena told shareholders.
The project is estimated to deliver average life-of-mine revenues of A$251-million, and operating cash flows of A$104-million, and would have a pre-tax post royalty net present value of A$394-million and an internal rate of return of 61%, based on a lead price of $0.95/lb and a silver price of $16.50/oz.
The Abra project would require a capital investment of around A$153-million, and would have an 18-month pay-back period, Galena said.
“This scoping study has confirmed the economic viability of the Abra project and has increased our confidence in the real potential of the project as a near-term Western Australian development opportunity,” said Galena CEO Ed Turner.
“This is an exciting long life, high margin and low capital project in a Tier 1 jurisdiction. Abra’s latest representative metallurgical testwork demonstrates that it can produce a very high grade, high quality clean concentrate that is in high demand.”
Given the outcome of the scoping study, the junior company was now progressing with a prefeasibility study, which is due to be completed in September this year.
Additional infill drilling will also be undertaken to convert more resource material to the higher confidence classification.
Subject to funding and approvals, Abra construction could start in the third quarter of 2019, with first production scheduled for the first quarter of 2021.