Galena Mining Ltd (ASX:G1A) has welcomed its EPC contractor to site as work on the processing plant at the Abra Base Metals Project kicks into gear.
GR Engineering Services Ltd (ASX:GNG) (GRES) will be responsible for engineering, procurement and construction (EPC) services at the WA base metals hub under a contract it struck up with Galena in February last year.
According to the agreement, GRES will erect a 1.2-million-tonne-per-annum lead sulphide flotation process plant and associated infrastructure, in exchange for up to $79.5 million.
Specifically, detailed engineering design works and procurement actions are now 38% and 35% complete, respectively.
With site works officially underway, Galena is a step closer to bringing a crucial component of its flagship Abra Base Metals Project online.
Partners for many years
Speaking to the move, Galena managing director Tony James said: “I’m pleased to see GR Engineering mobilise to Abra on schedule.
“Having partnered with us for many years since the study phase, they know our project very well and it’s a great to see their ongoing support get to the site works stage.”
Abra Base Metals Project
Galena owns 60% of the Abra asset, which sits between the mining towns of Newman and Meekatharra and just 110 kilometres from Sandfire Resources Ltd’s DeGrussa Project.
In 2019, the ASX-lister completed a definitive and bankable feasibility study, which considered developing a mine and processing facility with a 16-year mine life.
The hub is set up to produce high-value, high-grade lead-silver concentrate, containing roughly 95,000 tonnes of lead and 805,000 ounces of silver per year, after ramp-up.
Based on a A$170 million pre-development capex forecast, the feasibility study modelled a pre-tax net present value of A$553 million and a 39% internal rate of return.
The project’s mineral resource estimate is outlined below:
Galena reached a final investment decision for the project in June, marking the start of an intensive journey to produce its maiden, high-grade lead-silver concentrate in 2023.
Underground mining kicked off at the asset just under a month ago, with primary decline works expected to continue for roughly 14 months.
The jumbo drill rig on-site at Abra.