WWW.RESOURCEGLOBALNETWORK.COM
MINING | Galena Mining | ASX
GA
A high-gr
Resource Global Network
ALENA MINING
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.
2008.
Resource Global Network
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
Australian Resource Business Global Network
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
408m.
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).
98
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.
“OUR AIM IS TO PROVE UP A HIGH-GRADE RESOURCE AT THE ABRA DEPOSIT AND GET THAT INTO PRODUCTION” EDWARD TURNER, CEO GALENA MINING
Resource Global Network
“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-
later.
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
office.
of Galena’s aim, just three years after the company was born.
a j
Published by Anderson Murray Media Ltd
To tell the resource market your story, contact: jacob@resourceglobalnetwork.com
WWW.RESOURCEGLOBALNETWORK.COM