Abra Mine Production Falls 16% as Sales Drop 30% in December Quarter
Galena Mining Limited reports a challenging December quarter at its 60%-owned Abra Base Metals Mine, marked by production declines and ongoing voluntary administration. The company appoints a new CEO for Abra and explores recapitalisation options to stabilise operations.
- Abra mine under voluntary administration since April 2024
- Quarterly lead-silver concentrate production down 16%, sales down 30%
- New CEO Matthew Hine appointed to lead Abra during administration
- Road closures and operational issues disrupted concentrate haulage
- Galena maintains commitment to recapitalisation and value preservation
Operational Challenges at Abra Amid Administration
Galena Mining Limited's December 2024 quarterly report reveals a difficult period for its Abra Base Metals Mine, located in Western Australia's Gascoyne region. The mine, 60% owned by Galena through Abra Mining Pty Limited (AMPL), has been under voluntary administration since April 2024 due to operational setbacks including ramp-up issues, adverse weather, and supply chain disruptions.
During the quarter, lead-silver concentrate production fell 16% to 25,492 tonnes, while concentrate sales dropped 30% to 22,263 tonnes, generating approximately A$50.2 million in revenue. These declines were exacerbated by 28 days of road closures caused by localized rain events, severely impacting concentrate haulage and logistics.
Leadership Transition and Strategic Direction
In a significant leadership move, Galena appointed Matthew Hine as CEO of Abra effective 9 December 2024. Hine brings extensive experience from his previous role as COO at Adriatic Metals and senior positions at OceanaGold, Evolution Mining, and Glencore. His appointment aims to provide operational stability and guide Abra through the administration process, with contract negotiations ongoing to secure his leadership beyond the current fixed term.
Meanwhile, the voluntary administrators, Richard Tucker and Robert Hutson of KordaMentha, continue to operate the mine on a business-as-usual basis while exploring recapitalisation scenarios. The Supreme Court has extended the deadline for the second creditors meeting to 7 March 2025, where decisions on the mine's future and Galena's involvement will be determined.
Operational Performance and Financial Position
Mining output delivered 302,689 tonnes of ore at a 5.4% lead grade, slightly below expectations due to mechanical issues and workforce constraints. The processing plant milled 346,587 tonnes of ore at a 5.1% lead grade, producing concentrate with a lead metal recovery rate of 91.3%, an improvement over previous quarters.
Despite operational challenges, safety metrics remained stable with a Total Recordable Injury Frequency Rate (TRIFR) of 8.4 and a Notifiable Incident Frequency Rate (NIFR) of 10.8 per million work hours. The Abra site had 13,531 tonnes of concentrate stockpiled at quarter-end, awaiting shipment.
Financially, Galena reported a consolidated cash balance of approximately A$1.7 million at quarter-end, down from A$4.3 million the previous quarter. The company received A$50.2 million from concentrate sales but faced operating and capital expenditure outflows totaling over A$12 million. Financing activities included loan proceeds of A$10.7 million, supporting ongoing operations during administration.
Exploration and Future Prospects
No on-ground exploration was conducted during the quarter at either the Abra or Jillawarra projects, reflecting a focus on stabilizing current operations. The Abra project remains a significant asset with a July 2023 Mineral Resource estimate of 33.4 million tonnes at 7.1% lead and 17 g/t silver, underscoring its long-term potential.
Galena's board emphasizes its commitment to assisting the administrators and stakeholders to preserve shareholder value amid the ongoing uncertainty. The company remains suspended from ASX trading under Listing Rule 17.2 for the duration of the administration process.
Bottom Line?
Galena’s next moves in the Abra administration will be pivotal for its operational and financial recovery.
Questions in the middle?
- What recapitalisation options will the Abra administrators and creditors ultimately select?
- How will new CEO Matthew Hine’s leadership influence operational turnaround?
- What impact will ongoing road and supply disruptions have on future production and sales?