Things are not looking good for the small Western Australia (WA) lead and silver miner, Galena (ASX:G1A), with a trading halt on Tuesday turning into a suspension until the end of January on Thursday.
On Tuesday, Galena requested a trading halt until Thursday to facilitate a review of the company's mining operations at the Abra mine in the WA Kimberley region. This request came shortly after a brief update on mining at Abra in the December quarter, revealing mixed fortunes. While there was a small improvement in production levels, cost pressures and seemingly unreliable ore grades posed challenges.
In the update, Galena cited the trading halt as "pending an announcement regarding a strategic review of operations." The company reported record highs in several production areas, but it also acknowledged the need to align the capital structure of its operating company, Abra Mining P/L (AMPL), with Abra's expected performance.
Galena's CEO, Tony James, highlighted the challenges faced by the company, emphasizing the need for improved mining performance and ore grades in 2024. He mentioned ongoing technical evaluations that would shape the 2024 outlook and discussions with key stakeholders.
On Thursday, the trading halt request evolved into a suspension, granted by the ASX. Galena requested a voluntary suspension until January 31, 2024, or until the company releases an announcement regarding the strategic review of operations. It appears that Galena faces an uncertain future, with negotiations with funders and shareholders likely necessary to secure additional capital.
