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Created thumbnail files way too big. Any ideas?

Hi guys,
I can't get my head around one thing: thumbnails created via resize() function appear to be way too big in terms of the file size.
I uploaded an image 335KB 1600x1200px, resized it to 640x480 (116KB - a bit large I think) and then created a thumbnail 80x80px and the thumbnail is 40KB! My guess is it shouldn't be more than 5KB.
I have the quality set to 70%.
Any ideas?

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