Galena Mining (ASX: G1A) has confirmed the economic and technical viability of the high-grade lead-silver discovery at its 100%-owned Abra project in Western Australia, after a scoping study determined potential for the mine to become a “significant” WA lead-silver producer.
The study, based on a lead price of A$1.29 per pound, supports a A$153 million underground operation comprising a 1 million tonne per annum processing plant, mine site infrastructure, environmental permitting, logistics and marketing.
It confirmed Abra’s viability as a low capital, high-margin operation, with an initial mine life of 11 years and potential to extend if regional exploration opportunities are realised.
The study estimated an initial production throughput of 1 million tonnes per year focused on high-grade lead-silver mineralisation, averaging grades of 9.7% lead and 15 grams per tonne of silver to produce 91,000tpa of lead and 450,000 ounces of silver.
Future drilling programs could uncover additional mineralisation within the deposit, which may host copper-gold mineralisation at depth and could extend the mine’s life beyond the initial 11-year scope.
A deposit with a high-grade history
Located in WA’s Gascoyne region, approximately 110km the high-grade Degrussa copper-gold mine operated by Sandfire Resources (ASX: SFR), the Abra deposit was originally discovered in the late 1970s and has been the subject of ongoing extensive historical exploration and preliminary level economic studies.
Galena’s prefeasibility study on the Abra project is due for completion this year.
In May, the company announced that prelimary prefeasibility test work to-date had achieved “outstanding metallurgical recoveries” of high-grade clean lead concentrate, and showed considerable improvements on historical tests.
The potential development coincides with a strong market outlook, with increased demand and reduced supply producing an average spot lead price of A$1.32/lb over the last 10 years.
Galena plans to commence construction at Abra in 2019, with first production slated for 2021.
By mid-morning, shares in Galena had increased 8.82% to A$0.18.