Galena Mining : Quarterly Activities and Cashflow Reports

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ASX ANNOUNCEMENT
28 January 2022	ASX: G1A

ACTIVITIES REPORT FOR QUARTER ENDED 31 DECEMBER 2021

HIGHLIGHTS:

• Abra Project 39% complete at end of December Quarter
• Underground mining commenced in early-October, with 440m of underground development achieved by Quarter-end
• EPC contractor (GR Engineering Services) commenced on-site processing plant construction in early-November
• New 1.8km Abra aerodrome construction was completed in the December quarter and operational from early January 2022
• Mr Neville Gardiner appointed to the board
• Cash balance at Quarter-end A$59.5M
• Exploration at satellite Jillawarra project conducted during the quarter

GALENA MINING LTD. ("Galena" or the "Company") (ASX: G1A) reports on its activities for the quarter ending 31 December 2021 (the "Quarter"), primarily focused on construction of its 60%- owned Abra Base Metals Mine ("Abra" or the "Project") located in the Gascoyne region of Western Australia.

ABRA BASE METALS MINE (60%)

Abra comprises a granted Mining Lease, M52/0776 and surrounding Exploration Licence E52/1455, together with several co-located General Purpose and Miscellaneous Leases. The Project is 100% owned by Abra Mining Pty Limited ("AMPL"), which in turn is 60% owned by Galena, with the remainder owned by Toho Zinc Co., Ltd. ("Toho") of Japan.

Abra is fully permitted and under construction. First production of its high-value,high-grade lead- silver concentrate is currently scheduled for the first quarter of 2023 calendar-year.

GALENA MINING LTD.

CORPORATE OFFICE: LEVEL 2, 1100 HAY STREET, WEST PERTH WA 6005 (TEL [phone])

WEBSITE: www.galenamining.com.au/ TWITTER: @GalenaMiningASX

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Project construction / development

During the Quarter Abra Project construction works continued, substantially increasing the construction works as the Quarter progressed.

Abra Base Metals Mine construction / development progress to completion1

Progress within the Quarter		Total cumulative progress as at Quarter-end
18%	39%

Notes: 1. Based on completed proportion of total forecast project development capital expenditure.

Abra Construction Progress At 31 December 2021 (Percentage Spent By Category)					Remaining
							% Actual			% Planned											Project
																			Capex
Accommodation Camp - $14.7M																						100%		$0.1M
																						100%
Bulk Earthworks - $15.0M																	69%								$4.6M
																	77%
Process Plant EPC - $81.9M					26%																		$60.4M
				26%
Non-Process Infrastructure - $6.0M														54%											$2.8M
													56%
Mining Pre-Production - $48.2M					29%																		$34.3M
				26%
Other Pre-Production - $12.3M1														52%											$5.9M
													55%
Owner's Costs & Contingencies - $53.3M 2										39%													$32.4M
									44%
Total Project Capex - $231.4M 3										39%													$140.5M
									40%
0%	10%	20%		30%	40%	50%	60%	70%	80%	90%	100%

Notes: (1) Includes water supply & recovery, vehicles & mobile equipment, initial fills & spare parts, shire road maintenance, paste fill plant acquisition and construction indirect costs. (2) Includes employee & contractor, flights, accommodation, fuel, site management and general & administration costs as well as additional owner's contingencies on the remaining project capex. (3) Total project capex includes expenditure from the commencement of the project in July 2019 through to planned practical completion of the process plant in January 2023. As at 31 December 2021 the total remaining project capex was $140.5M.

Figure 1. Progress of various Abra construction packages as at Quarter-end.

Abra construction works conducted during the Quarter were comprised of site civil and earthworks, underground development, processing plant construction and ongoing front-end engineering design and procurement, including:

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• Underground mining - On 5 October 2021 the mining contractor for Abra, Byrnecut Australia Pty. Ltd. ("Byrnecut") commenced operations associated with the development of the underground mine. During the Quarter, underground development progressed ahead of schedule and successfully passed through the upper weathered and transitional rock zones into fresh rock. As at Quarter-end, underground development had reached 440 metres (i.e., approximately 29% complete for the pre-production phase of the project).
• Processing plant and associated infrastructure works - On 5 November 2021, the Company announced that GR Engineering Services Ltd. ("GRES"), the engineering, procurement, and construction ("EPC") contractor for Abra's processing plant had commenced on-site construction works with the installation of footings and concrete works ongoing as at Quarter- end. By 31 December 2021, the EPC contract was approximately 38% complete (based on earned value). Final design and drafting is 78% complete and procurement activities, which continued to be advanced ahead of schedule as much as possible, were approximately 54% complete. Actual on-site construction was approximately 7% complete and is expected to accelerate rapidly in the first few months of 2022.
• Aerodrome and flight services - Construction was completed of Abra's new 1.8-kilometre aerodrome on 12 December 2021, which will provide significantly improved site access and logistical capacity for the life of the Project, with the ability to land and handle small jets and turboprop aircraft with capacity more than 70 seats. AMPL entered an air charter services contract with Cobham Aviation Services Australia Pty Ltd ("Cobham") and commenced regular air services between Perth and Abra utilising Cobham's modern 76-seat Q400 aircraft and Perth terminal facilities.

Figures 2-7 (below) show various photos of the Abra Project progress taken during the Quarter.

Figure 2. Aerial view of Abra (above the boxcut looking north towards the ROM pad and processing plant site in the middle ground, with the 280-unit accommodation village in the background).

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Figure 3. Processing plant civil and concrete construction in December 2021.

Figure 4. Processing plant (crusher concrete foundations).

Figure 5. Processing plant (flotation area foundations).

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Figure 6. Processing Plant equipment fabrication (ball mill shell welding).

Figure 7. Processing Plant equipment fabrication (concentrate thickener).

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