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Galena Mining Ltd.
Summary
| Project: | Abra | |
|---|---|---|
| Deposit: | Abra | |
| Location: | Australia | |
| Commodities: | Lead-Silver | |
| Date: | 9/25/2018 | |
| Report Code: | JORC | |
| Report Type: | Pre-Feasibility Study | |
| Project Stage: | Pursuing Feasibility Study | |
| Report details: | 25-9-2018: Galena Mining Ltd. announces a Pre-Feasibility Study report for its Abra deposit at the Abra project. PFS results incl. pre-tax NPV of A $528M (8%), IRR of 50%, updated resource and reserve. GALENA MINING LTD. ("Galena" or the “Company”) (ASX: | |
| Resources: | (Reserve, Prob.): 10.5Mt @ 8.1% Lead, 20g/t Ag | |
| CP/QP: | [Resources]: Don Maclean, Adrian Byass (Independent;Internal) | |
| ABSTRACT: | GALENA MINING LTD. ("Galena" or the “Company”) (ASX: G1A) announces completion of the highly anticipated pre-feasibility study (“PFS”) for its wholly-owned Abra Base Metals Project (“Abra” or the “Project”), located in Western Australia. The PFS outcomes are considered excellent and in most respects confirm or exceed the previously completed Scoping Study (see Galena ASX announcement of 28 June 2018). The completion of the PFS has also allowed the Company to declare its maiden JORC Ore Reserve for the Project. Managing Director, Alex Molyneux commented, “This PFS confirms Abra is one of the best base metals projects in the world in terms of high investment returns, low country risk and market significance. The overall value of the Project has also just got a whole lot bigger with the NPV rising by 34% to A$528M, and a number of years additional mine life.” Managing Director, Alex Molyneux went on to say, “The work done for the PFS also confirms we have a clear pathway to complete permitting and other pre-development works quickly. Abra is a very ‘executable’ project and it will be the absolute mission of Galena’s team to move it into construction in a timely manner.” Abra is a globally significant lead-silver deposit, with a granted mining licence, located in Western Australia. The excellent PFS confirms the technical and economic robustness of developing an integrated mining and processing operation to produce a high-value, high-grade lead-silver concentrate. Key outcomes of the PFS are presented in Table 1 and Table 2 below. The PFS includes a 20% increase in annual production tonnage and a 27% extension of mine life, at a slightly lower grade. These enhancements have been gained by improvements and optimisation of mining methods, stope designs and scheduling since the Scoping Study, without a material increase in pre-development capital expenditure or direct cash operating costs. As a result, the value of Abra (as represented in NPV terms) has transformationally increased whilst underlying investment returns remain extremely strong. 4 Page 4 Certain financial assumptions changed from the Scoping Study to the PFS. The lead price remained unchanged at US$0.95/lb. However, the silver price was lowered from US$16.50/oz (Scoping Study) to US$14.50/oz (PFS) to reflect the more material change in spot silver price over the time between the two studies. The exchange rate assumption was also amended for the same reason, from A$1=US$0.75 (Scoping Study) to A$1=US$0.73 (PFS). Furthermore, reflecting the more detailed mine planning (a monthly mine schedule underlies the PFS) and more detailed engineering and other inputs, the real discount rate used to calculate NPV was lowered from 10% (Scoping Study) to 8% (PFS). | |
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