Raisebook

Major Lead-Silver Deposit in World-Class WA Mining Region
Galena
Galena
ASX:G1A
  • The stock has met minimum requirements, and bids will now close this Wednesday (July 5th, 10pm AEST)

The Fundamentals

Galena's primary focus and core asset is the 100% owned and highly advanced world-class Abra lead-silver deposit, situated in the premium Gascoyne region in Western Australia.

Raise Amount
$6,000,000
Offer Price
$0.2000
Closes
Jul 5, 2017

The Abra deposit is one of the largest undeveloped lead-silver deposits in the world, and is located atin close proximity to critical infrastructure, with tenements accessible via Great Northern Highway and planned export via the Port of Geraldton.

The Abra deposit is well-drilled and established, and comprises a coherent zone of medium-grade mineralisation with a defined high-grade lead-silver core. It has been the subject of several studies, with historical expenditure estimated at $20 million.

The deposit has JORC (2004) resources of 3.7 million tonnes of contained lead and 29 million ounces of silver by way of 93 million tonnes at 4.6% lead equivalent that was last calculated in 2008.

Galena has assembled an experienced management and exploration team with extensive corporate history in the exploration, development, financing and production of precious and base-metals deposits.

The company's strategy is to deliver strong shareholder returns with a focus on a medium-sized, high-grade mining operation in a time of record lead prices and increasing world demand.

Following the listing, the company will have an enterprise value of $5.4 million — a low entry point.

Galena's Advanced Abra Lead-Silver Project

  • Major lead-silver deposit in the heart of WA’s north-west mining region
  • One of the largest undeveloped lead-silver deposits in the world
  • Project is well-established and advanced — first drilled by Geopeko in 1981 and then by major companies such as North, RGC and Chinese SOEs — this current IPO represents an significant opportunity to realise the project’s value at reduced cost
  • The deposit has JORC (2004) resources of 3. 7 million tonnes of contained lead and 29 million ounces of silver by way of 93 million tonnes at 4.6% lead equivalent that was last calculated in 2008
  • Over $20 million spent so far
  • Galena will target the deposit’s high-grade core to prove up +10 million tonne deposit with grades of greater than 10% lead equivalent
  • Underpinning this strategy are some excellent drill results such as 44 meters at 25.32% lead and 42.9 g/t silver
  • Galena will dedicate $2.5 million to the drilling and reserve conversion of this target
  • Ideally located in established mining precinct, with closely located critical infrastructure
  • Located approximately 200km north of Meekatharra in the Ashburton Basin of central Western Australia — tenements are accessible via the Great Northern Highway through public unsealed roads
  • Planned export through Geraldton Port
  • Focused development and production pathway, with potential for near-term positive cashflow
  • Previously assessed as a large-scale, capital intensive operation with high-throughput, low-medium grade ROM
  • Galena will target a high-grade core and smaller, high-margin production scenario
  • A pre-feasibility study is expected to commence following a scoping study as early as Q4, 2017

A Resurgent Lead Market

  • Lead is primarily used within batteries — over 75% of lead demand is utilised via lead-acid batteries, primarily for vehicle transport fleets. Even hybrid vehicles contain lead-acid batteries, alongside lithium-ion batteries
  • Lead demand has increased from 7.3Mt in 2004 to 10.6Mt in 2015, representing an increase of 45% over an 11-year period
  • Demand across 2010-2015 was up 28%, primarily via Chinese demand growth but also increasing in North America and Europe
  • As well as expected ongoing demand growth, lead supply is also increasingly constrained
  • Galena is impeccably positioned to capitalise on this uneven supply-demand equation

The Deal

Galena is raising $6 million via IPO at $0.20 per share, for an offer of 30,000,000 shares.

Following the listing, the company will have an enterprise value of $5.4 million.

Following the listing, the company will have a low enterprise value of $5.4 million.

Capital raised will be used to fund exploration, scoping studies and drilling.

Capital Structure

Share issued in IPO 20c 30.0 million
Total shares on issue after IPO 49.6 million
Options on issue at IPO* 5.95 million
Market Cap at IPO $9.9 million
Cash balance (pro forma) ** $4.5 million
Debt Nil
Enterprise Value $5.4 million

* Management and employee options 30, 40c
** Repayment of $1.2 million to HNC and incurred holding costs during IPO process

Shareholders at IPO
Board & Management * 8.4%
Vendor 21.8%
IPO Investors 60.4%

* Assumes management do not purchase further stake in IPO offer. Management have indicated they will apply for stock in the IPO

This deal closed on July 05, 2017