Galena Mining Ltd (ASX:G1A) only listed on the ASX in September last year, but the prospective lead-silver play has been well sought after by investors.
As the company has moved to develop the Abra lead-silver deposit in the Gascoyne region its shares have shot from the IPO price of $0.20 to hit a high of $1.25 last week.
However, analysts at Hartleys believe there is upside to its current trading range, initiating coverage with a speculative buy recommendation and a price target of $1.58.
The broker also made the point that its fully diluted price target was based on a preliminary valuation of $1.76 and more conservative commodity prices going forward.
Galena identifies broad sections of mineralisation within the Abra deposit
In the course of completing a 12 hole, 8 kilometre diamond drill program at Abra, Galena intercepted some high grade mineralisation.
This included 53.3 metres at 10.8% lead and 20 g/t silver from 521 metres.
There were two other hits of circa 60 metres, grading 10.6% lead and 7.8% lead from circa 400 metres.
The most recent resource estimate was released in 2008, being a non-JORC resource of 93 million tonnes at 4% lead and 10 g/t silver.
Hartleys crunches numbers on potential 1 million tonnes per annum underground operation
Hartleys has based its project modelling on a 1 million tonnes per annum underground operation with all in sustaining costs (AISC) of $0.75 per pound.
The broker’s estimates are based on a 9 year mine life, producing 88,000 tonnes per annum of lead and 391,000 ounces per annum of silver from circa 2021.
However, the most significant hurdle would be financing of the project which Hartleys estimates would be in the vicinity of $180 million based on comparable Australian operations.