Galena Mining Ltd. entered a 10-year off-take agreement with IXM SA for its unit Abra Mining Pty Ltd. to supply 65,000 tonnes per annum of high-grade lead-silver concentrates from the Abra base metals project in Western Australia.
The agreed volume accounts for about 60% of Abra's production that has not already been earmarked for off-take to the company's joint venture partner Toho Zinc Co. Ltd.
Managing Director Alex Molyneux commented that the arrangement demonstrates a higher value over and above the assumptions used in the recent feasibility study, which outlined a posttax net present value of A$381 million, at an 8% discount rate, with a 32% internal rate of return for the project.
Moreover, IXM is providing Galena a US$12 million financing facility, available in two tranches of US$6 million each, to provide an additional option for back-up liquidity during construction and ramp-up phases at Abra.
The off-take is conditional on the start of production at Abra by Dec. 31, 2023, and the start of commercial production by Dec. 31, 2024.
The company received all of the major permit approvals and concluded the native title compensation arrangements for Abra in July.