Photo by: Galena Mining
Name of the Project
Abra base metals project.
Location
Gascoyne region of Western Australia.
Project Owner/s
Abra Mining, 60%-owned by Galena Mining.
Project Description
The results of a feasibility study have confirmed low-risk and strong projected economic returns for the development of Abra as a combined underground mine and conventional processing facility (flotation concentrator) to produce a high-value and -grade lead/silver concentrate.
Total proven and probable reserves are estimated at 10.3-million tonnes grading 8.8% lead and 24 g/t silver.
Total mineral resources are estimated at 37.4-million tonnes grading 7.5% lead and 18 g/t silver.
Abra’s life-of-mine (LoM) has increased from 14 years in the September 2018 prefeasibility study (PFS) to 16 years in the feasibility study.
Mill throughput has remained the same, at 1.2-million tonnes a year; however, LoM lead production has increased from 1.1-million tonnes in the PFS to 1.24-million tonnes in the feasibility study, and silver production from 9.6-million ounces in the PFS to 10.6-million ounces in the feasibility study.
Lead production is estimated at 95 000 t/y and silver at 805 000 oz/y.
Potential Job Creation
Not stated.
Net Present Value/Internal Rate of Return
The feasibility study estimates a pretax net present value, at a 5% discount rate, of A$553-million – 25% higher than the September 2018 PFS – and an internal rate of return of 39%, with a payback from the first full year of commercial production of two years.
Capital Expenditure
Preproduction capital expenditure is estimated at A$169.6-million in the feasibility study, from A$154-million in the PFS.
Planned Start/End Date
2023.
Latest Developments
Galena Mining has announced plans to raise A$20-million to provide additional working capital, warning that the ramp-up of its Abra base metals mine has been delayed.
“The revised geology information affecting the ore that was hard against the Abra fault has been a short-term technical change we did not expect or anticipate.
“That ore has been replaced by lower-grade ore and we will continue our ramp-up to steady-state production as quickly as possible, moving away from the upper northern margin of the orebody,” MD Tony James has said.
The rain in the last week of March also impacted on the project and Galena had to slow down work until it has restocks the critical supplies required at the mine.
As a result of the delay in the ramp-up, and heavy rains, lead production for the 2023 calendar year is expected to decrease from the previous guidance of between 53 000 t and 68 000 t to between 50 000 t and 60 000 t.
Production unit costs are forecast to increase because of the lower-than-expected lead production and a 12% increase in overall costs since the last guidance was provided in July 2022. Steady-state life-of-mine guidance continues to show strong financial outcomes following the ramp-up timeframe.
“The updated guidance for 2023 also includes some of the cost challenges that everyone in the industry is seeing. Our plan is to push through this ramp-up period as quickly as possible to get into consistent steady-state production,” James notes.
To fund additional working capital during the ramp-up of Abra, Galena plans to place 133.3-million shares, at 15c each, with the company saying that it has received binding commitments for the placement.
The company’s biggest shareholder, Warburton Group, has subscribed for more than 23.8-million shares worth an estimated A$3.6-million, while debt facilities provider Taurus Mining Finance has subscribed for more than 6.66-million shares worth some A$1-million.
The shares will be issued in two tranches, with the first to raise nearly A$13.9-million under Galena’s existing placement capacity, while the second tranche of 40.4-million shares, raising an additional A$6.1-million, will be subject to shareholder approval at a meeting scheduled for mid-June.
Key Contracts, Suppliers and Consultants
GR Engineering Services (feasibility study).
Contact Details for Project Information
Galena Mining, tel +61 8 6166 3750 or email admin@galenamining.com.au.