Galena Mining Ltd (ASX:G1A) expects to complete a drilling program at its Western Australian Abra Base Metals Project early next month as the company moves to complete a pre-feasibility study (PFS) in September.
The company used its latest quarterly activities report to highlight the economics of the Gascoyne region project for which a scoping study gave a $394 million net present value (NPV) and 61% internal rate of return.
Abra’s estimated NPV was based on a 10% discount rate and US$0.95 a pound price.
READ: Galena Mining crosses a milestone towards Abra Base Metals Project development
Galena’s scoping study also estimated capital expenditure of $153 million for an initial 11-year mine life where costs were paid back at 18 months.
Annual processing capacity was estimated at 1 million tonnes, with average lead metal production coming in at 91,000 tonnes and average silver metal production at 450,000 ounces.
The company reported: “There remains considerable exploration potential for additional lead-silver mineralisation already identified to be converted to JORC resource with additional drilling.
“The deposit is also zoned with significant copper-gold intercepts at depth.”
Galena said infill drilling was expected to help upgrade its inferred resources to indicated so they could be factored into PFS production planning.
The highest graded lead intersection at the project was 15.4 metres at 25.9% lead and 74 g/t silver from 519.1 metres at the Apron deposit.
The highest graded gold intersect was 8 metres at 9.5 g/t gold, 1.4% lead, 0.6% copper and 77 g/t silver from 706 metres.
READ: Galena Mining buoyed by positive economics in Abra base metals project scoping study
Abra is in WA near two gazetted Shire of Meekatharra roads — the Ashburton-Meekatharra and Tangadee roads — which the company expects will contribute cost-savings to its logistics bill.
Galena also used its activities report to flag it was funded to complete the PFS next month and a follow-on definitive feasibility study next year.
The company hopes to mine first material at the site in the January quarter of 2021 and also process the material at its own plant.
Assays are pending for 1,114 metres from two diamond core holes in the 46-40 and Leader 18 prospect at its Woodlands lead-copper property, west of Abra.
It said: “These mineralised zones are interpreted as being part of the same mineralised system previously intersected in historic drilling, however, Galena’s intercepts are several hundred metres from the historical intersections.
“The system has therefore been significantly extended with this drilling.”
READ: Galena Mining adds gold to the mix at its world-class Abra lead-silver project
Among the most significant prior assays for the 46-40 prospect at Woodlands were: 20.7 metres at 1.10% lead from 214.3 metres, including 4.3 metres at 2.3% lead; and 22.5 metres 0.52% copper from 523.5 metres.
Galena spent $1.86 million on exploration and evaluation activities in the June quarter and brought in $9 million from share issues.
The company ended the quarter with a cash position of $8.53 million.