Galena Mining has secured a $110m in debt facilities from Taurus Funds Management for the Abra base metals project .

Located in the Gascoyne region of Western Australia, between the towns of Newman and Meekatharra, the project is jointly operated by Abra Mining, a joint venture company of Galena and Toho Zinc.

The base metals project is estimated to hold reserves of 10.5Mt, grading 8.1% lead and 20g/t silver.

Provided through Taurus Mining Finance Fund, the debt facilities comprises a $100m term loan and a $10m cost overrun loan.

The $10m cost overrun loan is to finance the identified cost overruns on the project in capital expenditure and working capital.

Galena Mining managing director Alex Molyneux said: “The US$110 million of debt funding, together with the final A$60 million investment to be received from Toho on implementation of the facilities provides an efficient and fulsome funding package to bring the outstanding Abra base and precious metals project to fruition in a way that provides robust shareholder returns.”

Abra Mining to issue a 1.125% of net smelter royalty to the lender

Abra Mining has proposed to issue a 1.125% of net smelter royalty in consideration of the Taurus debt facilities. The net smelter royalty is same amount as the historical vendor royalty which was terminated by AMPL, upon completion of the project’s feasibility study.

Furthermore, Toho has also signed an off take agreement for 40% of Abra’s production for an initial 10-year period.

In January last year, Galena Mining agreed to sell a 40% stake in its subsidiary Abra Mining to Toho Zinc for A$90m.

Initial production from the Arba project is expected to be achieved in 2021.

The company is targeting the first full-year of steady-state commercial production from it in 2022.