Base Metals: Galena bulks up Abra lead-silver resource

Galena Mining (ASX:G1A) has cranked up the attractiveness of its Abra base metals project in WA after successful infill drilling resulted in a resource upgrade.

Abra now boasts a resource of 41.1 million tonnes at 7.3 per cent lead and 18 grams per tonne (g/t) silver for a contained resource of about 3 million tonnes of lead and 26.1 million ounces of silver.

This represents an 8 per cent increase in contained lead and 10 per cent increase in contained silver over the December 2018 resource estimate.

The upgrade has also moved more resources into the higher confidence indicated category, which now stands at 16.7 million tonnes at 8.5 per cent lead and 24g/t silver, or 1,419,500 tonnes of contained lead and 14.1 million ounces of contained silver.

Galena said this is an increase of 114,000 tonnes of lead and 2.1 million ounces of silver over the previous resource estimate.

READ: Galena just got $90m to kickstart Abra mine development and its shares are flying

It added that the infill drilling in its main objective of increasing confidence in the northwestern Apron Zone sector, which will be mined during the first three years of the Abra mine plan.

The company has also defined further high grade lead-silver mineralisation in the northwestern sector of the Apron Zone that could potentially increase early project cash flows.

“This resource upgrade provides a strong boost to both lead and silver metal tonnes but equally important in a practical sense, it has achieved our aim of significantly increasing geological confidence in the first three years of the proposed mine plan,” managing director Alex Molyneux said.

Galena has also previously defined a probable reserve of 10.3 million tonnes at 8.8 per cent lead and 24g/t silver.

At full production, the Abra project is expected to produce 95,000 tonnes of lead and 805,000 ounces of silver each year for an initial 16 year mine life. This would give it a net present value (NPV) of $553m and an internal rate of return (IRR) of 39 per cent.

NPV and IRR are metrics used to assess the profitability of a project. The higher the NPV and IRR, the more profitable a project will be.

Shares in Galena ticked up almost 1.5 per cent in morning trade.

In other ASX base metals news:

Carawine Resources (ASX:CWX) will soon start a helicopter borne magnetic survey to evaluate copper-gold porphyry targets at its Jamieson project in northeast Victoria. The company expects to release a maiden resource for the intriguing Hill 800 copper-gold deposit, before kicking-off drilling in mid-November that will initially target extensions to known porphyry-related mineralisation at relatively shallow depths.

Dreadnought Resources (ASX:DRE) has started drilling up to six deep diamond holes at the Grants copper-gold target in the West Kimberley, the first drilling of any kind in the area since 1959 despite the presence of outcropping mineralisation. The holes are co-funded under the West Australian state government’s Exploration Incentive Scheme.