Galena Mining Ltd (ASX:G1A) has boosted lead reserves by 8% and silver by 18% in an updated resources and reserves statement for the Abra Base Metals Project in Western Australia’s Gascoyne region.
The new JORC-compliant probable ore reserve estimate of 10.3 million tonnes at 8.8% lead and 24 g/t silver also incorporates a 9% increase in lead metal grade.
This reserve is within an indicated and inferred mineral resource estimate at a 5.0% lead cut-off of 37.4 million tonnes at 7.5% lead and 18 g/t silver.
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Galena’s managing director Alex Molyneux said: “It’s really pleasing to continue Abra’s development with updated resources, reserves and the new mine model.”
The updated reserve estimate has also resulted in revised mine model material of 16.4 million tonnes at 8.2% lead and 22 g/t silver.
This compares favourably to the mine model assumed for the pre-feasibility study (PFS), adding about an extra year of mine life to 15 years.
There is around 6% higher average lead grade over the life of mine with about 169,000 tonnes of additional lead metal along with higher average silver grade and around 16% more silver metal.
Less lateral development needed
Galena is also buoyed by a revised assessment of resource geometry and revised mine model which results in around 13 kilometres less lateral development than assumed for the PFS.
Molineux said: “We’re very excited about the extra grade and metal over the reduced lateral development and their combined potential for material enhancement to the economics of Abra.”
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3D oblique view of Abra December 2018 resource looking southeast.
Galena intends to release an optimised PFS in early 2019 taking into account the potential of the increased metal content and lower development metres to improve economic outcomes.
This work will take place as an interim update before release of a definitive feasibility study (DFS) for Abra but will not delay the DFS in any way.
The updated resource statement for Abra has been prepared by independently prepared by Optiro Pty Ltd following completion of the 2018 resource infill and development drilling program.
This consisted of 21 diamond core drill-holes for about 12,900 cumulative linear metres of drilling.
Optiro’s estimate is based on geological assay data from 102 diamond core drill holes for 59,751 cumulative linear metres completed up to the end of October 2018.
199,000 tonnes more lead metal
The resource, which is from the upper Apron Zone and the Lower Core Zone, contains around 199,000 tonnes more lead metal than the PFS updated resource.
Importantly, from a potential mining perspective, about 96% of this additional lead has been added in the upper Apron Zone.
Stylised geological cross-section of Abra looking east.
Galena said that the updated resources and reserves continued to confirm Abra’s standing as a globally significant lead-silver deposit.
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The company continues to assume long-hole open stoping as the primary mining method for Abra, with paste backfill.
However, certain shallow dipping areas within the Apron Zone will be mined as room and pillar.
Based on a pre-development capital expenditure estimate of $154 million, the PFS modelled a pre-tax net present value for Abra, at an 8% discount rate, of $528 million and an internal rate of return of 50%.