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Corporate Spotlight

The Company's management strategy and the purpose of this Offer is to provide Galena with funding to systematically explore the Company's key projects, being the Mulgul and Jillawarra Projects, by conducting drilling and assaying, resource modelling and metallurgical testing, conduct scoping studies
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Interview with Alexander Molyneux from Galena

TRANSACTION COMPLETION

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TOHO TRANSACTION COMPLETION 

ASX Announcement 12 April 2019 


GALENA MINING LTD. ("Galena" or the “Company”) (ASX: G1A) makes this announcement regarding the proposed transaction with Toho Zinc Co., Ltd. (“Toho”) to invest $90 million for a 40% joint-venture investment in Abra Mining Pty Ltd (“AMPL”) as described in the Company’s ASX announcements of 30 January 2019 and 1 April 2019 (“Transaction”).


We are pleased to report that Toho, via its wholly-owned subsidiary CBH Western Australia Pty Ltd (“CBHWA”) and Galena have executed the definitive documentation for the Transaction (including an Investment Agreement and AMPL Shareholders Agreement). Furthermore, the fist tranche payment of $20 million has been received by AMPL.


Managing Director, Alex Molyneux commented, “I’m very pleased to welcome Toho as our partner for the development of the Abra Base Metals Project. 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.” 


Under the terms of the Transaction, once certain closing formalities are completed, AMPL will issue new shares to CBHWA such that AMPL will be owned 8.89% by CBHWA and 91.11% by the Company. At that time, Galena will also receive a $5 million intercompany loan repayment from AMPL. Subsequently, CBHWA will pay a second $10 million payment tranche to AMPL once Galena issues the definitive feasibility study (“DFS”) for the Abra Base Metals Project (“Abra” or the “Project”) for an additional 4.44% of AMPL. A final $60 million payment will be paid once project financing debt for the Project has been confirmed on terms acceptable to both Galena and Toho and all conditions for draw down for the full amount of the project financing debt have been satisfied. CBHWA will receive a further 26.67% of AMPL on payment of that final tranche, taking its total ownership of AMPL to 40.00%.


Abra is now being advanced towards the construction phase. As announced on 22 March 2019, initial project development drilling has commenced (including drilling to complete decline positioning, water bores and additional infill holes associated with early production horizons). In addition, Galena and Toho have agreed to utilise the first and second payment tranches from the Transaction to commence additional early project works, including: establishment of initial site camp; certain site infrastructure works; mine boxcut development; initial underground decline development; and procurement of certain long lead-time items (note: some of these items remain subject to final permitting).


In light of the fast-track move towards construction and that the DFS for Abra remains expected in mid-2019, Galena no longer proposes to publish an optimised Abra prefeasibility study as proposed prior to entering into the Toho Transaction. The Company’s immediate focus will be on: commencing the early project works; finalising outstanding minor permitting approvals; completion of the DFS; and advancing discussions with project financing debt providers (including engaging with Japanese lenders introduced by Toho).


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TRANSACTION UPDATE

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TOHO TRANSACTION UPDATE 

ASX Announcement 1 April 2019 


GALENA MINING LTD. ("Galena" or the “Company”) (ASX: G1A) makes this announcement regarding the proposed transaction with Toho Zinc Co., Ltd. (“Toho”) for its 40% joint-venture investment in Abra Mining Pty Ltd (“AMPL”) as described in the Company’s ASX announcement of 30 January 2019 (“Transaction”).


Toho has completed its confirmatory due diligence and that condition to the Transaction has been satisfied. Therefore, having already received approval from the Australian Government Foreign Investment Review Board (see Galena ASX announcement of 22 March 2019), the only material outstanding conditions to the Transaction remain: both parties to be satisfied with and execute the required definitive documents; and both parties receiving final internal approvals for the execution of such aforementioned definitive documents.


In light of the above, Galena has agreed to extend the exclusivity period for the Transaction by 12 days until 12 April 2019. 


As per the ASX announcement of 30 January 2019, Galena continues to anticipate the definitive documentation to be executed and the first payment to be made in April 2019. 


Forward-looking statements 

The contents of this announcement reflect various technical and economic conditions at the time of writing. Given the nature of the resources industry, these conditions can change significantly over relatively short periods of time. Consequently, actual results may vary from those in this announcement.


Some statements in this announcement regarding estimates or future events are forward-looking statements. They include indications of, and guidance on, future earnings, cash flow, costs and financial performance. Forward-looking statements include, but are not limited to, statements preceded by words such as “planned”, “expected”, “projected”, “estimated”, “may”, “Scheduled”, “intends”, “anticipates, “believes”, “potential”, “predict”, “foresee”, “proposed”, “aim”, “target”, “opportunity”, “could”, “nominal”, “conceptual” and similar expressions. 


Forward-looking statements, opinions and estimates included in this announcement are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements are provided as a general guide only and should not be relied on as guarantee of future performance. Forwardlooking statement may be affected by a range of variables that could cause actual results to differ from estimated results and may cause the Company’s actual performance and financial results in future periods to materially differ from any projections of future performance or results expressed or implied by such forwardlooking statements. So there can be no assurance that actual outcomes will not materially differ from these forward-looking statements.


About Abra Base Metals Project 

Wholly-owned by Galena, the Abra Base Metals Project (“Abra” or the “Project”) is a globally significant lead-silver project located in the Gascoyne region of Western Australia (between the towns of Newman and Meekatharra, approximately 110 kilometres from Sandfire’s DeGrussa Project). 


Galena recently completed an outstanding pre-feasibility study (“PFS”) (see Galena ASX announcement of 25 September 2018) for development of a mine and processing facility with a 14-year life producing a high-value, high-grade lead-silver concentrate containing approximately 91kt of lead and 760koz of silver per year after ramp-up. Based on a pre-development capital expenditure estimate of A$154 million, the PFS modelled a pre-tax net present value for Abra (at an 8% discount rate) of A$528 million and an internal rate of return of 50%.1


Note: 1. Information relating to the production target and financial information derived from the production target is extracted from the ASX announcement of 25 September 2018. Galena confirms that that all material assumptions underpinning the production target, or forecast financial information derived from a production target, in that announcement continue to apply and have not materially changed. 



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PRESENTATION

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INTERVIEW

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BOARD

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BOARD OF DIRECTORS

Mr Adrian Byass

BSc Geol Hons, B. Econ, MAIG & FSEG

+20 years in the mining industry both in listed and unlisted entities globally, Non-Executive and Executive Director of various listed and unlisted mining entities, which have successfully transitioned to production in bulk, precious and speciality metals around the world. Currently on the Boards of ASX phosphate, zinc, nickel and lithium companies.


Mr Jonathan Downes

BSc Geol, MAIG

+20 years’ experience in the minerals industry and has worked in various geological and corporate capacities. Experienced with nickel, gold and base metals, he has also been intimately involved with numerous private and public capital raisings.

Mr Downes is on the board of several ASX-listed companies; he was a founding director of Hibernia Gold (now Moly Mines Limited) and Siberia Mining Corporation Limited and is a non-executive director of Corazon Mining Limited.


Mr Oliver Cairns

Corporate Financier specialist with extensive experience at management and Director level; on both AIM and ASX listed companies. Mr Cairns has experience in capital markets, M&A, IPO, corporate governance, IR experience across the resources and industrial sectors.


Mr Tim Morisson

B. Econ, MBA

+20 years in the finance industry and capital markets. A partner of Empire Equity which is a Perth based boutique investment advisory company. Tim has extensive experience in ASX and resource-related companies.


SENIOR MANAGEMENT

Mr Edward Turner

B ASc (Geol), MAIG

30 years experienced geologist throughout Europe, South America, Africa and Australia in a range of roles encompassing base, precious and specialty metals for leading mining companies. Technical strengths include exploration, underground mining, resource estimation, feasibility studies and development level work.


Mr Troy Flannery

BEng(Min), MAppFin, FCMMC

Mr Flannery has been working in the mining industry for over 20 years including 5 years in corporate and 16 years in senior mining engineering / project development roles. He has a degree in Mining Engineering, Masters in Finance & First Class Mine Manager’s Certificate of Competency.

Mr Flannery has worked at numerous mining companies, mining consultancies & contractors (including BHP, Newcrest, Xstrata, St Barbara Mines & AMC Consultants). 


Mr Stephen Brockhurst,

Mr Brockhurst is the founding Director of Mining Corporate Pty Ltd and has 15 years’ experience in the finance and corporate advisory industry and has been responsible for the preparation of the due diligence process and prospectuses on a number of initial public offers. His experience includes corporate and capital structuring, corporate advisory and company secretarial services, capital raising, ASX and ASIC compliance requirements.

Mr Brockhurst has served on the board and acted as Company Secretary for numerous ASX listed and private companies. He is currently a Director of Roto-Gro International Limited and International Goldfields Limited and Company Secretary of Jacka Resources Limited, Lindian Resources Limited, Volt Resources Limited, Estrella Resources Limited and Cabral Resources Limited.


www.galenamining.com.au


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