Lead-silver developer Galena Mining is maintaining a brisk pace with the ASX listed company kicking off a definitive feasibility study for its flagship Abra lead-silver project located north of Meekatharra just weeks after unveiling some attractive PFS results.
Australian engineering consultant and contractor GR Engineering will carry out key portions of the study related to plant design, capital cost and operating cost estimation and process and non-process infrastructure evaluation.
With a number of key PFS work items already completed to DFS levels, the company expects to complete the study by mid-2019.
Construction of Abra is scheduled to start in 2019 with initial production likely to happen in 2021 and the first full year of steady state commercial production expected in 2022.
The PFS is based on a 1.2 million tonne per annum throughput underground mine and a conventional floatation concentrator to produce a high-grade lead silver concentrate containing 91,000 tonnes of lead and 760,000 ounces of silver per annum over a 14-year mine life.
Previous studies by the company indicate that Abra is likely to generate an impressive pre-tax NPV of $528m and a pre-tax IRR of 50% for a reasonably manageable CAPEX of $154m.
Abra’s average annual net free cash flow position during commercial production will be an impressive $97m per year according to the company.
Galena Managing Director Alex Molyneux said: “The recently published pre-feasibility study 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 parallel with the DFS, Galena will prepare an updated mineral resource estimate that will lead onto a review of Abra’s ore reserve and underground mine design.
Galena will also continue permitting works, including lodgement of the final mining proposal in the next three to four months and progress discussions with potential customers and project financing parties.
Global demand for lead exceeded supply by 39,000 tonnes in the first half of 2018, according to the International Lead & Zinc Study Group.
By Matt Birney
