The Conversation (0)
GALENA MINING LTD. (“Galena” or the “Company”) (ASX: G1A) advises that the Abra mine has generated positive operating cash flows for the quarter ended 30 September 2023 (the “Quarter”) and has achieved new quarter production highs as the mine continues to ramp-up. Subject to September end of month reconciliation the following key operation highlights and significant milestones were achieved.
HIGHLIGHTS
- Three lead concentrate shipments totalling ~22kt were completed, more than doubling revenue from the previous quarter to ~A$45 million and generating positive operating cash flows.
- New quarterly mining and production records:
- Total ore milled of ~283kt (~49% increase from previous quarter);
- Lead concentrate production of ~19kt (~50% increase from previous quarter);
- Total ore mined of ~292kt (~50% increase from previous quarter), with underground stope production of ~202kt;
- Mining of first core vein stope commenced and paste-fill plant commissioned; and
- Underground development of ~2,100m, including a new monthly record of ~800m in September.
- Lead grade continues to improve as new work areas are established and the ratio of stoping ore to development ore continues to increase.
- The official Abra mine opening ceremony was held on 13 September 2023. The mine was officially opened by the President of Toho Zinc (Mr. Masahito Ito) and the Galena/Abra Chairman (Mr. Adrian Byass).
Managing Director, Tony James commented, “The Abra mine was able to achieve new quarterly production highs as we continue to move through the ramp-up process. During this time, we continued to improve the mine’s production levels as we endeavour to become more consistent with our mining and processing. The result was positive operating cash flows for the Quarter.
The mine delivered 202kt of stope ore for the Quarter. Operational and technical issues associated with mining two stopes in September and the commissioning of the paste-fill plant generated stope production delays which were resolved. The plant processed 283kt of stoping and development ore during the Quarter. Ore processed was ~5% less than target due to 13 days of non-processing time over the Quarter, mainly associated with some unplanned and planned maintenance work. Unplanned maintenance included conveyor replacement following rockbolt damage and a primary crusher blockage. Planned maintenance included the mine’s first shutdown for various maintenance activities including the first mill reline.
Achieving higher development rates in the mine of 2,100m (target 2,000m) is significant as it enables us to continue to open new work areas which will allow access to multiple higher-grade stoping blocks. With this, we expect grades to continue to improve as mining progresses and we are very pleased with the strong correlation between the stope grades and the processing reconciliation for the stopes. In steady-state, stoping is expected to account for 80% of the feed stocks which allows the mine to be less reliant on the generally lower grade ore development which is associated with the ramp-up period of operations.
The Abra team continues to be resilient and busy during the mine’s ramp-up and it’s nice to see everyone being rewarded with the continuous improvement we are achieving. We look forward to taking the next ramp-up step in the December quarter, which should see Abra reaching close to its full potential.”
Figures 5-11 (below) show recent photographs of the Abra mine.
Figure 5 – Traditional Japanese opening ceremony conducted on site on 13 September. Participants left to right included, Ms. Belinda Riley (Jidi Jidi Corporation), Mr. Steve Coughlan (Executive Chairman Byrnecut Group),Mr. Masahito Ito (President Toho Zinc), Mr. Adrian Byass (Galena/Abra Chairman) and Mr. Charles Loxton (Taurus Funds Management).
Figure 6 – Abra mine opening ceremony (photo 13 September 2023).
Click here for the full ASX Release
This article includes content from Galena Mining, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
G1A:AU
Galena Mining Investor Kit
- Corporate info
- Insights
- Growth strategies
- Upcoming projects
GET YOUR FREE INVESTOR KIT
Galena Mining
Overview
Galena Mining Limited (ASX:G1A, Galena) owns 60 percent of the Abra base metals mine located in the Gascoyne region of Western Australia - home to one of the largest lead and silver deposits in the world, set to produce the highest-grade, cleanest lead concentrate available globally. The company is capitalizing on its Tier 1 asset in a Tier 1 jurisdiction, strengthened by and leveraging partnerships with Japan's largest zinc and lead smelter, as well as with one of the top base metals trading firms in the world.
The company also owns 100 percent of the Jillawarra Project, which covers 76 kilometers of strike extension directly to the west of Abra. The Jillawarra Project contains several large-scale analogous exploration targets including the Woodlands Complex, Quartzite Well and Copper Chert areas.
Galena's major partnerships include Toho Zinc (TSE:5707), Japan's largest zinc and lead smelter, and IXM SA, one of the world's top three base metals trading firms. Toho provided AU$90 million project equity and has a long-term offtake agreement to purchase 40 percent of Abra's production; while IXM has entered into a 10-year take-or-pay offtake contract to purchase the remaining 60 percent.
The company's management team brings decades of experience in the mining and base metals industry and has a proven track record of success throughout all stages of exploration, from development to production.
In November 2020, Galena put in place US$110 million in finalized debt facilities arranged by Taurus Funds Management. The facilities include a US$100-million project finance facility plus a US$10-million cost overrun facility.
The project finance facility consists of a 69-month term loan primarily to fund capital expenditures for the development of Abra. Key terms include:
- Fixed interest of 8 percent per annum on drawn amounts, payable quarterly in arrears.
- 1.125 percent net smelter return royalty.
- No mandatory hedging.
- Early repayment allowed without penalty.
- 15 quarterly repayments commencing on 31 December 2023.
The cost overrun facility is a loan to finance identified cost overruns on the project in capital expenditure and working capital. Fixed interest of 10 percent per annum applies to amounts drawn under the cost overrun facility.
The Taurus debt facilities have been fully drawn and are secured against Abra Project assets and over the shares that each of Galena and Toho own in Abra.
Company Highlights
- Positioned to realize value for shareholders:
- Abra mine construction completed in December 2022, on time and on budget.
- First in-specification concentrate shipment achieved in March 2023.
- Abra is one of the largest and cleanest lead-silver deposits in the world (high-grade, high-value concentrate 1/10th typical deleterious elements).
- Exciting exploration ground and known copper-gold mineralisation below the Abra lead-silver deposit.
- JV between Galena (60 percent) and Japan's largest zinc and lead smelter Toho Zinc (40 percent) underpins long mine life (10+ years) in an exciting new mineral province in Western Australia.
- Galena has a 10-year offtake agreement with IXM, one of the world’s largest base metals traders.
- Annual steady-state guidance:
- Mill throughput of more than 1.3 million tonnes per annum (Mtpa), producing +90,000 tonnes per annum lead and +550,000 ounces per annum silver.
- Annual average lead C1 direct cash cost of US$0.55 to US$0.65/lb.
- Annual average EBITDA (earnings before interest, taxes, depreciation, and amortization) of AU$90 million to $100 million.
- The Abra mine is located in the Gascoyne Region of Western Australia, home to one of the largest undeveloped lead deposits in the world and the highest-grade lead concentrate available, globally.
- The Abra mine carries a JORC mineral resource estimate (July 2023) of 16.2 million tons (Mt) at 7.3 percent lead and 19 grams per ton (g/t) silver in the indicated category, and 16.9 Mt at 6.9 percent lead and 15 g/t silver in the inferred category.
- Abra has been named the world's lowest-cost primary lead mine by Wood Mackenzie, a leading mining research and consultancy group.
- US$110 million of project financing debt facilities from leading mining-specialist lending fund Taurus Funds Management.
- Galena's management team brings decades of experience in the mining and base metals industry and has a proven track record of success throughout all stages of exploration, from development to production.
Key Projects
Abra Mine
The Abra Mine is a 60:40 joint venture between Galena and Japanese lead producer Toho Zinc. It is a globally significant lead-silver project located in the Gascoyne region of Western Australia, between the towns of Newman and Meekatharra approximately 110 kilometers from the DeGrussa copper mine owned by Sandfire Resources (ASX:SFR).
Abra Mine Site Location
The Abra mine carries a total JORC mineral resource estimate published in July 2023 of 33.4 Mt at 7.1 percent lead and 17 g/t silver (5 percent Pb cut-off grade), which includes 0.3 Mt at 7.3 percent lead and 32 g/t silver in the measured category; 16.2 Mt at 7.3 percent lead and 19 g/t silver in the indicated category; and 16.9 Mt at 6.9 percent lead and 15 g/t silver in the inferred category.
All permits for the Abra project have been obtained from the appropriate Western Australian regulatory bodies. The project is also subject to an existing land use and heritage agreement with the Jidi Jidi Aboriginal Corporation. The Abra property is well-serviced by public roads and highways, and all the necessary infrastructure has been developed to transport lead-sulphide concentrates to the Port of Geraldton, Abra's primary export port.
Abra Processing Plant
A final investment decision to complete the Abra Project was made in June 2021 and construction was completed in December 2022, on time and on budget. Several important milestones were achieved in the March 2023 quarter, including the commissioning of the processing plant, first ore fed into the plant and first concentrate produced in January 2023.
The processing plant achieved in-specification concentrate production from the commencement of concentrate production and during the 2023 calendar year, 967,622 tons of ore was processed and 61,800 tons of lead concentrate was produced.
The company is currently undertaking detailed technical work to develop an updated production plan for 2024 production targets and guidance.
Jillawarra Project
Exploration and growth associated with the 100 percent Galena-owned Jillawarra Project covers a highly prospective elongated tenement package covering approximately 76 kilometers of continuous strike length and 508 square kilometers directly to the west of Abra.
The Jillawarra Project hosts many base metals prospects which have had limited shallow exploration work completed since the 1970s by various companies. The bulk of the exploration work was completed by Amoco, Geopeko, Apex Minerals and Abra Mining Limited. The work completed to date has identified several base metals, manganese and gold prospects, of which the Woodlands Complex, Quartzite Well, Manganese Range, Copper Chert, TP and 46-40 were subject to early-stage exploration. Most of the drilling completed within the Jillawarra Project investigated the first 100 to 200-meter depth which, based on recent knowledge of Abra, may not have reached the depths required.
The main prospective corridor within the Jillawarra Project lies within the margins of the Quartzite Well – Lyons River Fault zones which extend east-west along the entire tenement package. Also, the contact between the dolomitic sediments of Irregully Formation and the lower sedimentary unit, polymictic conglomerate, of the Kiangi Creek Formation represents an important marker for the occurrence of base metal mineralisation as seen at Abra.
The Woodlands Complex is an Australian scaled geophysical anomaly which represents a significant target area with the anomaly being 12 kilometers long and 10 kilometers wide. Limited work and technical evaluation have occurred at Woodlands which presents a great opportunity for Galena in the years to come. Ongoing geophysical and exploration drilling will occur concurrently with the development of Abra. The knowledge and understanding of Abra due to its development will provide a significant exploration advantage at Jillawarra.
Management Team
Tony James – Managing Director and CEO
Tony James is a mining engineer with over 30 years’ mine operating and project development experience predominantly in Western Australia. He also has previous experience at managing director level of three ASX-listed companies with two of those companies successfully guided through a merger and takeover process benefiting the shareholders. He has a strong mine operating background (examples being the Kanowna Belle gold mine and the Black Swan nickel mine) and a strong feasibility study / mine development background (examples being the Pillara zinc/lead mine and the Trident/Higginsville gold mine).
Adrian Byass – Non-executive Chairman
Adrian Byass has more than 25 years of experience in the mining industry both in listed and unlisted entities globally. He has served as non-executive and executive director of various listed and unlisted mining entities, which have successfully transitioned to production in bulk, precious and specialty metals around the world. He currently serves on the boards of ASX gold, base metals and lithium companies.
Neville Gardiner – Non-executive Director
Neville Gardiner has over 30 years of experience advising boards on mergers and acquisitions,
equity and debt capital markets, transaction structuring, capital allocation and complex
commercial arrangements. His career achievements include senior executive leadership
roles in Deloitte, Torridon Partners, and at Bank of America Merrill Lynch, where he spent five years as the head of its Australian Natural Resources Team. He also spent nine years with Macquarie Bank, where he had responsibility for its Western Australian Corporate Finance business and its Australian Oil and Gas Advisory business. He has a very strong experience and knowledge base associated with the resources sector in Australia.
Stewart Howe – Non-executive Director
Stewart Howe has more than 40 years of experience in the global resource industry including 18 years in mining. He was chief development officer at Zinifex, one of the world’s largest miners and smelters of lead and zinc. He led the spin-off of Zinifex’s smelters to create Nyrstar NV, and restarted the development of the Dugald River mine.
Craig Barnes – Chief Financial Officer
Craig Barnes has over 25 years of experience in senior finance and financial management within the mining industry and previously the financial services industry. He has considerable experience in project financing, mergers and acquisitions, joint ventures, treasury and implementation of accounting controls and systems.
Before joining Galena, he held the position of CFO of Paladin Energy for more than five years and was part of the team that successfully completed the company's capital restructuring in 2018. Prior to that, he was the chief financial officer of DRDGOLD (NYSE and JSE:DRD) and its affiliated subsidiaries for more than seven years.
Aida Tabakovic – Company Secretary
Aida Tabakovic has over 11 years of experience in the accounting profession, which includes financial accounting reporting, company secretarial services, ASX and ASIC compliance requirements. She has been involved in listing several junior exploration companies on the ASX and is currently company secretary for numerous ASX-listed companies
Abra Construction At 97% Complete – First Ore Stockpiled For January Processing
Managing Director, Tony James commented, “Record underground development in November with delivery of the first 9,000t of ore to the ROM pad along with successful plant commissioning to date puts Abra on the verge of a quick transition into production. Recruitment and other operational readiness activities are well advanced in preparation for January production”.
Figure 1 – First material being tipped into the crusher during commissioning (Photo 26 November).
Figure 2 – Crushing and screening plant commissioning (Photo 26 November).
The following link will show a short video of the Abra crusher commissioning. https://youtube.com/shorts/iSG58MiW_3o
Update on Abra Project progress
Overall progress continues as planned, with first concentrate production expected in Q1 CY2023, following ore commissioning in January 2023. Practical completion of the processing plant is now expected ahead of schedule in December 2022. The processing plant engineering, procurement and construction has reached 99% complete. Piping and electrical works have made significant progress and at the end of November were 96% and 92% complete, respectively. Mechanical items installation is almost complete at 99%.
In November, the first material was crushed and screened as part of the staged commissioning process. The crushing plant ran at design capacity and all commissioning milestones were successfully achieved. Dry commissioning also progressed in most areas of the plant including water and air services, tailings and concentrate thickening, grinding and reagents. Dry commissioning of the remaining areas will be completed in December. Water commissioning commenced in the tailings and concentrate thickening areas of the plant and the remaining areas are expected to be wet commissioned by the end of December. The remaining commissioning schedule is unchanged from the last update and is shown below in Table 1.
Click here for the full ASX Release
This article includes content from Galena Mining, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Quarterly Activities Report for the Period Ending 30 September 2024
Key Highlights
- Elevated uranium and extensive alteration identified at Preston Creek from phase 2 drilling at the Geikie project
- Significant unconformity uranium target identified through ground EM at the 100% Basin owned Marshall Project
- Continued engagement and consultation with stakeholder groups culminating in the signing of an exploration agreement with The English River First Nation
- Extensive complimentary project acquisition reviews and due diligence completed, culminating in the acquisition of Normetco AS subsequent to the quarter
- U3O8 spot price1 stable in US$80/Lb - US$85/Lb range
Final results from the winter exploration programs were announced for all three of the Company’s Athabasca Basin uranium projects (the ‘Projects’) (Figure 1).
Phase 2 exploration drilling at the Geikie Project (‘Geikie’) identified a 1.5km zone of alteration typical of basement-hosted mineralisation comparable to multiple world class uranium deposits. Results from the maiden ground electromagnetic surveys at the North Millennium and Marshall projects (‘North Millennium’, ‘Marshall’) were received, with significant conductive anomalies identified at Marshall, located above and below the unconformity, consistent with the regional exploration model.
Basin finalised an Exploration agreement that formalises the Company's relationship with the English River First Nation (‘ERFN’) in respect to Basin’s exploration and evaluation activities at its Marshall uranium project
The Company has spent significant time evaluating and assessing complimentary projects to supplement the existing portfolio, utilising the companies extensive inhouse exploration experience to identify opportunities that may have been recently overlooked. This has cumulated in the Company entering into a binding agreement to acquire the Normetco AS Uranium and Green Energy Metals portfolio, which occurred after the Reporting Period.2
The quarter saw the resignation of non-executive directors Peter Bird and Ben Donovan. The Company’s cash balance was $2.11 million at the end of the Reporting Period.
Basin’s Managing Director, Pete Moorhouse, commented:
“We are proud to have executed an exploration agreement with the English River First Nation, building on our existing exploration agreement with the Ya’ thi Néné, and look forward to building these relationships as our exploration campaigns mature on our exciting Athabasca Basin projects.
The company has spent extensive time assessing complimentary assets that meet our strict technical criteria for exploration merit and have a clear pathway for value addition to shareholders.
Whilst we are excited to commence assessment of early stage works on our Scandinavian acquisition, we remain committed to the Athabasca portfolio. Further drilling is required to fully test the initial discovery at Geikie, and the compelling deeper unconformity geophysical targets at Marshall. Our expenditure to date ensures that these assets are in good standing for the near-term future, ensuring that these valuable assets are safeguarded and advanced at a suitable pace.”
Figure 13: Project locations in relation to the Athabasca Basin
Click here for the Appendix 5B Cash Flow Report
Click here for the full ASX Release
This article includes content from Basin Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Basin Energy to Acquire Scandinavian Uranium and Green Energy Metals Portfolio
Key Highlights
- Basin Energy to acquire 100% interest in prospective portfolio with projects located in Sweden and Finland
- Deal structure includes upfront all scrip offer with deferred payments upon exploration success to preserve cash for exploration
- Projects prospective for multiple commodities including Uranium, Copper, Gold, Silver Niobium and Rare Earth Elements. Known highlights from historical exploration data include:
- Rock chip sampling at the Prästrun project up to 0.45% U3O8, 1.2% Nb, 0.07% Ta, and 0.26% Zr1.
- Evidence for both significant width and grade mineralisation at the Virka project from drilling which included 2
- 9 m at 1,087 ppm U3O8 from 24.5 m in drill hole 81-003
- within 17 m at 707ppm U3O8 from 23 metres depth
- Evidence for high grade uranium mineralisation from the Håkantorp project with limited sampling campaign of historical waste dumps returning up to 1.59% U3O83
- No modern systematic exploration undertaken with last significant exploration in 1980’s highlighting district scale potential
- Work program to commence immediately including stakeholder engagement, relogging historic core, surface sampling and mapping
Basin’s Managing Director, Pete Moorhouse, commented:
“Basin has been assessing opportunities since inception that fit the exploration criteria for potential world class discoveries. We are excited to add this complimentary portfolio to our existing asset base. The acquisition provides multiple near surface targets for uranium and green energy metals, that can be advanced cost effectively. Whilst exploration success was achieved in the 1980s, very little modern exploration has occurred. As of 2021, Sweden’s known uranium assets make up about 27% of Europe’s uranium resources4.
We remain committed to advancing our existing uranium portfolio in the world-class Athabasca Basin, however, we also recognise the significant opportunity presented to Basin for broader exposure to uranium and green energy metal discoveries that are required to fulfil the metals void created by the global push toward decarbonisation.
We will update the market with detailed project-level information shortly as we conduct initial work programs and further data verification of this exciting new package.”
Figure 1: Scandinavian Project Portfolio Locations
The project portfolio (Figure 1) primarily targets sheer-hosted and intrusive-related mineralisation and consists of five exploration licenses within Sweden consisting of 120.1 km2, and five reservations in Finland totalling 64.8 km2. Historical exploration records exist for several of the properties and highlight prospectivity for a variety of commodities.
Sweden
Virka, Björkberget and Rävaberget Projects
The Virka project, along with its highly-prospectivity satellite prospects Björkberget and Rävaberget, are strategically positioned in the heart of the Arjeplog-Arvidsjaur shear-hosted uranium district in Sweden (Figure 2). Previous drilling activities conducted in the 1980’s across all licenses targeted uranium mineralisation, with diamond drillholes gamma probed and limited geochemical core sampling being completed, see below for details. Additionally, historical regional geological mapping and boulder tracing records unveiled several surface anomalisms in lead, zinc, silver and gold associated with fault structures. Research indicates that these anomalies have not been adequately followed up with result not verified to JORC Code (2012).
Figure 2: Virka, Björkberget and Rävaberget Projects Location
Drilling at the Virka project consisted of 20 holes (Appendix 1) completed by the Swedish Geological Survey (“SGU”) between 1980 and 1982 that targeted the source of a geochemically anomalous boulder train. Although historic results from this boulder sampling have yet to be verified, it is noted that multiple anomalous elements were recorded in addition to uranium, including copper, silver and gold 5,6,7. Numerous other untested boulder trains were reported in the project area and will be a focus of initial ground exploration work program planned by Basin. Virka is located approximately 37 km southeast of Boliden’s (STO:BOL) Laisvall Pb-Zn-Ag former mine.
Click here for the full ASX Release
This article includes content from Basin Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Galena Mining Investor Kit
- Corporate info
- Insights
- Growth strategies
- Upcoming projects