Galena Mining has received $20 million of a proposed $90 million payment from Japanese company Toho Zinc to earn up to 40 per cent of the Abra base metals project in Western Australia.
The $20 million represents the first tranche payment by Toho subsidiary CBH Western Australia. A second payment of $10 million will occur once the Abra project’s definitive feasibility study (DFS) is completed, followed by a final payment of $60 million once the project’s financing is completed and all draw down conditions have been satisfied.
“I’m very pleased to welcome Toho as our partner for the development of the Abra base metals project,” said Galena managing director Alex Molyneux.
“Toho is a recognised player in the global lead and zinc industry and an experienced miner, so their investment represents one of the most positive endorsements possible.”
Initially, Toho will own 8.89 per cent of the Abra project and will receive a further 26.67 per cent once the entire $90 million has been paid to push Toho’s stake to a total of 40 per cent.
The project, which is located in the Gascoyne region of WA, is expected to be one of the largest primary lead projects in the world once production commences, with an estimated 14-year mine life and an indicated and inferred JORC resource of 37.4 million tonnes at an average of 7.5 per cent lead and 18 grams a tonne of silver.
Galena has now entered the construction phase of the project, and the company confirmed that funds from the first and second tranches of Toho’s payment will be partially put towards early project works, including establishment of the site camp, mine boxcut development and various other infrastructure.