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Galena Mining launches into Abra Base Metals Project DFS to follow-up “excellent” PFS

Consultant and contractor GR Engineering Services will undertake key components of the DFS.

Concentrate produced in tests for Abra project
Galena aims to produce first lead-silver concentrate from Abra in 2021

Galena Mining Ltd (ASX:G1A) has followed-up an “excellent” pre-feasibility study (PFS) for the Abra Base Metals Project in Western Australia by starting a definitive feasibility study (DFS).

Leading Australian engineering consulting and contracting company, GR Engineering Services Ltd (ASX:GNG), has been retained to undertake key portions of the DFS.

This work will include plant design, capital cost and operating cost estimation, process and non-process infrastructure evaluation.

READ: Galena Mining delivers “excellent” PFS which confirms potential of Abra Base Metals Project

Managing director Alex Molyneux said, “The recently published PFS for Abra demonstrated outstanding investment returns and we’re keen to see it engineered to the highest standards so we’re in a strong position to commence construction next year.

“In this regard we’re very pleased to have GR Engineering onboard in a key role.”

The DFS is targeted to be complete in mid-2019 with Galena targeting the start of construction in 2019, initial production in 2021 and the first full-year of steady-state commercial production in 2022.

A number of key items in the PFS have been completed to DFS-level including geotechnical drilling, metallurgical test work, environmental studies and reports, water supply analysis, hydrogeology, underground mine designs and infrastructure design.

Impressive track record

In the past 11 years, GR Engineering has completed more than 40 design and construction projects and over 160 feasibility studies including a number of ‘flagship’ Australian base metals projects.

Its managing director Geoff Jones said, “GR Engineering was involved in the Abra PFS and we are pleased to have been engaged to deliver key aspects of the DFS and to assist Galena realise the significant potential of the Abra Base Metals Project.”

Key technical appointment

Galena has also appointed a fulltime metallurgy and study manager to lead the internal DFS work under the guidance of chief operating officer Troy Flannery.

The company intends adding further experts to its technical and operating team in the lead-up to project construction.

The storage area for Abra drill core.

Start of the DFS follows the completion last month of the PFS.

READ: Galena Mining celebrates a year amid increased equity

The PFS envisages a 1.2 million tonne per annum throughput underground mine and conventional flotation concentrator.

This would produce a high-grade, high-value lead-silver concentrate containing 91,000 tonnes of lead and 760,000 ounces of silver annually over a 14-year mine life.

Galena said economic outcomes from the PFS were outstanding, with pre-tax net present value of $528 million, calculated at an 8% discount rate, and an internal rate of return of 50%.

Future work program

While work advances on then DFS, Galena plans to progress a number of value-adding milestone workstreams in parallel, including:

- Preparation of an updated mineral resource estimate including 2018 resource development and infill drilling data;
- A review of the Abra ore reserve and underground mine designs/schedule following
the updated resource estimate for a potential reserve update and optimisation of the PFS;
- Continuation of permitting works, including lodgement of the final mining proposal in the next three to four months;
- Ongoing discussions with multiple potential customers/offtakers; and
- Continuation of recently initiated discussions with project financing parties, including traditional project financing banks and strategic counterparties.

Abra resource

Abra’s current resource totals 36.7 million tonnes at 7.3% lead and 18 g/t silver, and within this is a probable ore reserve of 10.5 million tonnes at 8.1% lead and 20 g/t silver.

Abra is in the Gascoyne region of Western Australia, between the towns of Newman and Meekatharra, and about 110 kilometres from the DeGrussa project of Sandfire Resources NL (ASX:SFR).

Quick facts: Galena Mining Ltd

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Full interview: Galena Mining ramps up surface infrastructure development at...

Galena Mining Ltd (ASX:G1A) managing director Alex Molyneux updates Proactive on increased surface infrastructure development activities at the Abra Base Metals Project in the Gascoyne region of WA. This forms part of a $15 million development works program. The work is being done prior to...

on 10/10/19

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