25/03/2021 - 13:58

Horizon, Kingwest finalise sale of Menzies gold project

25/03/2021 - 13:58

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ASX-listed junior explorer, Kingwest Resources has finalised the acquisition of its advanced, multi-deposit Menzies gold project about 130 kilometres north of Kalgoorlie and the greenfields Goongarrie gold project 90km north of Kalgoorlie. Horizon Minerals has now banked the last instalment of $1.625 million cash and 10.83 million Kingwest shares to complete the $8 million sale to Kingwest announced in 2019.

ASX-listed junior explorer, Kingwest Resources has finalised the acquisition of its advanced, multi-deposit Menzies gold project about 130 kilometres north of Kalgoorlie and the greenfields Goongarrie gold project 90km north of Kalgoorlie. Horizon Minerals has now banked the last instalment of $1.625 million cash and 10.83 million Kingwest shares to complete the $8 million sale to Kingwest announced in 2019.

Perth-based Horizon became Kingwest’s major shareholder as a result of the transaction and now speaks for 18.7 per cent of Kingwest’s issued capital following the final payment. Horizon ultimately received 30.83 million Kingwest shares and $3.375 million cash for the divestment of Menzies and Goongarrie to Kingwest.

Kingwest has been drilling up a storm at Menzies over the past 18 or so months, having churned out more than 40,000 metres of RC and diamond drilling.

Over the period the company has built up an impressive near-surface global mineral resource for the collection of Menzies satellite gold deposits of 11.05 million tonnes of ore at an average grade of 1.26 grams per tonne for 446,200 ounces of contained gold using a 0.5 g/t cut-off grade.

Applying a higher cut-off grade of 1.0 g/t adjusts the indicated and inferred mineral resource estimate for Menzies to 5.36 million tonnes of ore grading an average 1.83 g/t for 315,500 ounces of contained gold.

Not included in the most recent mineral resource updates for Menzies are the latest reported high-grade gold hits from this year’s 46 RC holes for an aggregate 7,372m.

Stand-out intersections were 7m going 7.14 g/t gold from 204m, 2m at 15.17 g/t from 124m, 1m at 35.3 g/t from 32m, 7m at 4.26 g/t from 65m, 4m at 7.23 g/t from 187m, 2m at 7.5 g/t from 49m, and 2m at 6.86 g/t from 65m.

Kingwest Resources Chief Executive Officer, Ed Turner said: “These infill drilling results continue to prove the high-grade nature of the mineral resources at Menzies. Deeper extensional drilling has also been completed at multiple lodes as part of this 2021 drilling program and we look forward to receiving those assays over the next few weeks.”

“The company appreciates the support received from Horizon as its major shareholder during this time and looks forward to continue to realise value from both (assets).”

A just-released scoping study suggests a Menzies open-cut mining and toll treatment gold operation has the potential to deliver Kingwest revenues in the order of $330 million and free cash flows of between $64 million and $95 million across an initial contemplated mine life of 31 months based on a gold price of $2,300 an ounce.

Total operating costs have been estimated at $248.4 million or A$1,688 an ounce of gold produced.

The study points to the mining of eight separate open pits at Menzies, with higher-grade and medium-grade ore totalling 2.39 million tonnes of ore at 2.02 g/t for 155,000 ounces of contained gold bound for third-party toll treatment.

Assuming a 95 per cent recovery rate takes expected overall production for the 31-month period to a predicted 147,200 ounces of gold.

At Goongarrie, Kingwest’s first deep aircore drilling program recently returned a notable assay of 6m at 17.2 g/t gold from 94m within a wider intercept of 38m at 3.1 g/t from 62m at Target A9.

 

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au

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