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MINING | Galena Mining | ASX


A high-gr

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rade, low capex development strategy at the Abra deposit

MINING | Galena Mining | ASX

To say it has been a whirlwind 12 “We expect to make a large profit from a mine life of 10-15 years.” months or so for Galena Mining is an understatement. Around A globally significant a year ago the company existed asset only in the minds of a small The Abra development is a vast lead-silvercadre of executives and mining copper-gold-zinc deposit hosted over a professionals. However, in this 600 metre by 600 metre area within the short space of time Galena has Jillawarra sub-basin of the Mesoproterozoic been brought to life, purchased Edmund Basin, and is possibly the largest its first asset at an incredibly undeveloped lead deposit in the world. marked-down price, listed on the ASX after an unprecedented IPO Despite being first discovered in the 1980s and immediately begun resource and receiving a considerable amount of definition drilling at its asset, exploration attention from several interested the renowned Abra base metals parties, curiously the deposit remains deposit in the Gascoyne region undeveloped until now. of Western Australia. “Previously it was perceived to be a large The spark which led to the creation of Galena

mid to low-grade world-class deposit, that’s

was provided by three founding directors,

what attracted the previous Chinese buyers,”

who swiftly began to build a talented

reveals Turner.

executive team. Adrian Byass, Jonathan Downes and Oliver Cairns have several

However, while the value of the deposit

decades of experience between them in

has always been there for all to see, the

terms of identifying new assets and floating

strategies of those attempting to develop it

new companies.

have fallen short of taking Abra from a worldclass prospect into a fully-producing asset.

This founding trio soon appointed Edward Turner as Galena’s CEO, a geologist of 30

Often, previous owners approached the

years with a wealth of knowledge attained

project with a high production strategy,

from roles encompassing base, precious

based on yielding low to mid-grade ores in

and specialty metals for leading mining

massive quantities.

companies across the globe. This method invariably led to spiralling costs, Putting it simply, Turner tells RGN: “Our aim

which in the case of Chinese miner HNC was

is to prove up a high-grade resource at the

compounded by crashing metal prices in

Abra deposit and get that into production.


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MINING | Galena Mining | ASX

Resource Global Network

“But, we identified that within that large

for just $3.5 million, a snip of the $117 million

deposit there is a lot of high-grade

paid by HNC in the preceding transaction.

mineralisation, and if we can mine at a lower production rate per annum, there will

Unfortunately, the value of the Abra deposit

be much lower capital expenditure on the

quickly depreciated under the weight of the

processing facilities and the profit margin will

global financial crisis and stooping metal

be much higher on the production.

prices, to the dismay of the Chinese owners.

“The deposit covers such a large area that

Now, 10 years later with favourable macro-

previous owners were almost blinded by the

economic conditions returning and new

size of it and didn’t really try to identify the

forces shaping supply and demand currents

higher grade sections of the deposit.”

in the commodity market, Galena is well

Fortunate timing

poised to finally realise the true value of the metal in the ground.

Furthermore, the timing of Galena’s ascent into the Abra deposit is playing a vital role in

Recognising this building value, Galena’s

its development.

directors formed the company with the sole intention of acquiring the Abra deposit and

The company was able to acquire the assets

advancing it via a cost-effective strategy

MINING | Galena Mining | ASX

ResourceGlobal GlobalNetwork Network Resource based on a lower production rate at a higher grade, which would go a long way to guaranteeing a low capex project with high profit margins. The executives also laid out a clear timeline with regards to heading to the investor market and this was realised on September 7th last year when Galena’s IPO on the ASX raised $6 million in an over-subscribed affair. “It [the IPO] was very significant because it happened after such a short period of time, and was one of the most successful floats on the ASX last year,” reveals Turner. “Our share price has already gone up 600%, so the market has realised there is a lot of value in the asset. It was done in a very short amount of time and we were even drilling within two weeks of the listing.”

Resource definition drilling Immediately after listing Galena began preparations for drilling, including the set up of temporary camps at the resource, which were constructed by Longreach Camps, a well-established national outfit. This rapid move into further drilling activity at Abra is symbolic of the wider pace of development at Galena, with the impressive assay results also providing a tangible validation of the company’s strategy. Following the completion of work by its

MINING | Galena Mining | ASX

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capable partner DDH1 Drilling, Galena

thereby intersect some of the best high-grade

subsequently released assay results from a

mineralisation within the deposit, and each

12-hole infill programme that confirmed the

hole has been successful so far.”

presence of high-grade lead mineralisation across each hole.

As previously alluded to, prevailing market conditions in the lead industry are also

The pick of the bunch from the assays was a

playing into the hands of Galena.

result of 31.4m @ 14.5% lead and 2.7% zinc within a broader 64.0m interval at a grade

Lead prices of late have reached a 6-year

of 10.6% lead and 1.5% zinc, from a depth of

high, driven by a rapidly expanding global


vehicle fleet.

“These results prove our geological model for

Turner explains how an increasingly wealthy

the controls on the high-grade mineralisation

Asian consumer market is driving this growth

is correct,” Turner proclaims.

in the automobile industry, which is still dominated by traditional carbon-burning

“We are looking at it from a different

engine cars with lead acid batteries despite

perspective to previous companies and these

a slow transition towards hybrid engine and

holes were designed to test the model and

electric vehicles (EVs).


MINING | Galena Mining | ASX

Supply-demand dynamics Lead demand has risen 45% in just over 11

With high-grade metal in the ground and lead

years and should continue to rise as the

prices heading skywards, the company has

automobile industry gains greater traction

a strong platform on which to deliver on its

across emerging consumer markets, while

aims and make a significant profit over the

a lack of new lead mines in the pipeline is

next 10-15 years.

contributing to a constrained supply dynamic.

Operating in Australia, the world’s number Therefore, these supply-demand factors have one lead exporting country will also only put Galena in a very satisfying situation as it

serve to increase Galena’s chances of success

sits on possibly the largest undeveloped lead going forward. mine in the world.


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“It’s a huge advantage,” says Turner. “All

Galena will complete a resource estimate

of our consultants, engineers, geologists,

in February 2018, providing the foundation

metallurgists, environmental experts, have

stone for the next phases of the project. A

previous experience and are world leading

pre-feasibility study is due in September

in their expertise at getting these sorts of

followed by a bankable feasibility 12 months

deposits into production efficiently and cost-


effectively.” Finally, with the Abra deposit being within Of this highly specialised supply chain, Turner an already granted mining lease, Galena gives special mention to the work of Paul

will be in a position to get into production

Lyons Aviation and SGS Laboratories, who

by late 2020, which signals the fruition of

provided assaying services from its Perth

the Abra development and the achievement


of Galena’s aim, just three years after the company was born.

a j

Published by Anderson Murray Media Ltd

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RGN | Galena Mining  

A high-grade low-capex development strategy at the Abra deposit

RGN | Galena Mining  

A high-grade low-capex development strategy at the Abra deposit