Newly minted Galena Mining has hit pay dirt in “every hole” at its Abra lead and silver project in Western Australia.

The junior explorer has intersected high-grade mineralisation in each drill hole that it reported results from today and mineralisation is “not yet closed off”.

Galena’s (ASX:G1A) share price hit a new peak of 84c on the news — a 250 per cent spike on what the company closed at on its first day of trade in early September. Shares edged back slightly to 82c by midday.

G1A shares have rocketed 250 pc since the September debut on the ASX. Source:
Galena shares have rocketed 250 pc since the September debut on the ASX. Source:

Lead’s high density and low melting point, combined with its relative abundance and low cost, make it useful in construction, plumbing, batteries, bullets, weights, solders, white paints and leaded gasoline, among other things.

Demand for the commodity is rising rapidly, with the price jumping more than US$1,000 ($1278) per tonne, or 60 per cent, in the past two years to over US$2,600 per tonne.

“The actual demand for lead batteries in Asia is continuing to increase even with demand for new lithium batteries coming onto the market and there’s a shortage of concentrate supply,” chief Ed Turner told Stockhead.

The results returned from eight of the 12 holes drilled at the Abra project showed thick intersections of lead grading between 6.6 per cent and 13.5 per cent.

One hole returned an intercept of 31.7 metres at 13.5 per cent lead and 27 parts per million (ppm) silver from a broader intercept of 53.3 metres at 10.9 per cent lead and 20ppm silver.

Lead grades of between 2.5 per cent and 10 per cent are considered medium grade, while anything above that is high grade.

At least five of the eight intercepts reported contained grades of over 10 per cent.

“So far every hole we’ve hit the mineralisation where it’s supposed to be and we’ve proved the continuity,” Mr Turner said. “There’s been no dud holes and the remaining holes will definitely hit mineralisation as well.”

High grade = low cost + more profit

Galena is aiming to prove up more than 10 million tonnes at 10 per cent lead in the resource and is confident it will hit the high-grade mineralisation in the right spot.

“That’s a very significant deposit by Australian or even world standards for lead deposits,” Mr Turner said.

“That’s worth $3 billion in the ground. Not that that means you are going to make that much money, but there’s a big profit margin on 10 million tonnes at 10 per cent.”

Additionally, by developing a high grade operation, Galena will also lower its capital expenditure requirements.

“Previously we were looking at close to half a billion dollars capital expenditure if you mined out the previous low-grade resource, which was 93 million tonnes at 4 per cent and 6 million tonnes per year production,” Mr Turner said.

“We’re looking at more like 1 million tonnes per year and a capital expenditure of more like $150 million basically to get it up and running and there’s a higher profit.”

About 40 per cent of the assays from the 2017 drilling program are still outstanding and once Galena has the results in hand it plans to work on a resource upgrade, which is slated for release in mid-February.

The company then plans to move immediately to a pre-feasibility study at Abra.