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Galena Mining feasibility study reaffirms half billion dollar base metal mine

The feasibility study estimates a value for a future mining operation that is 5% higher than the pre-feasibility study (PFS) estimate.

 proposed Abra site layout
Abra has received all major permitting approvals required to commence construction

Galena Mining Ltd (ASX:G1A) feasibility study on its Abra Base Metals Project in Western Australia has valued a 16-year lead-silver mine pre-tax at A$553 million.

The study estimated Abra would produce 95,000 tonnes of lead and 805,000 ounces of silver per year for 1.24 million tonnes of lead and 10.6 million ounces of silver over the life-of-mine.

Capex estimates total $169.6 million with a construction period of 15 months and the lead C1 direct cash cost of production is forecast to be US$0.44 per pound.

Compared to the 2018 PFS, mine life has increased by two years, as has lead and silver production, and operating costs have decreased with capex increased.

Galena’s managing director Alex Molyneux said: “I’m very pleased that Abra has now completed FS-level technical and engineering work, with the project continuing to demonstrate sector-leading financial returns with a pre-tax NPV of A$553 million.

He added: “It’s also important to have completed the study on time given that it is a milestone to moving through the final phase of the project financing debt process, which is well underway.”

READ: Galena Mining gets ready to begin major construction works at Abra Base Metals Project

The study outcomes provide confirmation of technical feasibility with low risk and strong projected economic returns for the development of Abra.

The development being a combined underground mine and conventional processing facility (flotation concentrator).

This proposed operation will produce a high-value, high-grade lead-silver concentrate.

Targeting initial production in 2021

Galena continues to target initial production for Abra in 2021 and the first full year of steady state commercial production in 2022.

Project work is now focused on moving to the construction phase including finalising offtake agreements, project debt financing, development work, and updating the JORC resource and reserve.

READ: Galena Mining drills 25% lead and 516 g/t silver at Abra

The Abra Ore Reserve will be reviewed in conjunction with an upcoming update of the JORC resource estimate following completion of the ongoing 2019 project development drilling program.

Quick facts: Galena Mining Ltd

Price: 0.24 AUD

Market: ASX
Market Cap: $110.85 m

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Galena Mining's Alex Molyneux talks funding and new gold and base metals...

Galena Mining Ltd's (ASX:G1A) Alex Molyneux updates Proactive's Andrew Scott on debt financing discussions for its flagship Abra Project in Australia as well as outlining new gold and base metals drilling targets that've been identified. He says recent work has found gold mineralisation trends...

on 29/6/20

2 min read