Galena Mining Ltd (ASX:G1A, FRA:GM6) has ended the June quarter cashed up with A$96.2 million and a strong focus on the construction of its Abra Base Metals Project in WA to achieve first production by the first quarter of 2023.
Upcoming value-adding and corporate milestone workstreams include the mobilisation of its underground mining contractor, the start of decline development and the beginning of onsite construction of its liquid gas storage facility and site power station.
Other activities include the start of initial non-processing infrastructure including TSF, aerodrome, mining workshops and first stage buildings, the on-site construction of its process plant, key procurement and overall construction milestones as well as various stages of project commissioning.
A further 2% of early-stage and enabling construction works have been completed at Abra, taking cumulative project completion to 17%.
Abra Project final investment decision
On June 15 a final investment decision (FID) was made for the Abra Project, with first production of its high-value, high-grade lead-silver concentrate on schedule for the first quarter of 2023.
This FID confirms that Abra is poised to join the ranks of high margin Australian base metals producers by authorising the main construction activities.
Procurement of certain long-lead time items has commenced and the company's underground mining contractor is expected to initiate the portal and decline development by the end of the current quarter.
Physical on-site plant construction is expected to kick off in the fourth quarter of 2021.
Commercial initiatives supporting Abra
Prior to the quarter, Galena executed definitive agreements with Toho setting out the terms for Toho’s investment of A$90 million in tranches for a 40% ownership interest in Galena’s previously wholly-owned subsidiary, AMPL.
During the quarter the A$40 million final investment tranche was received from Toho.
Galena also put in place US$110 million in finalised debt facilities arranged by Taurus Funds Management prior to the quarter, with the facilities including a US$100 million Project Finance Facility plus a US$10 million cost overrun facility.
AMPL received the first drawdown under the Project Finance Facility in the amount of US$30 million, leaving US$80 million undrawn under remaining facilities.
Exploration
A full review of the prospects around Abra and other exploration targets was concluded during the quarter, defining five high-priority targets that have the potential to host similar base and precious metals mineralisation as Abra.
Amongst the work completed during the Quarter, a downhole geophysical survey was concluded for the deepest drill-hole ever drilled at Abra (AB195) to identify any potential conductive source associated with massive sulphide mineralisation, particularly in the interpreted copper-gold zone.
The downhole geophysical survey included electromagnetic, magnetic susceptibility, magnetic and conductivity surveys.
A significant magnetic conductive source was identified that is still being interpreted by the company’s consultant geophysicists.