Horizon Minerals has dispatched its first load of gold-bearing ore from the company’s Boorara operation, 15km east of Kalgoorlie, for processing at the nearby Paddington gold mill, as part of its recently revealed tie-up with well known Goldfield’s transport firm Hamptons Transport.
Horizon says 54,380 tonnes of ore has been hauled to the mill and is expected to grade at an average of 0.8 grams per tonne (g/t) gold with recovery levels of about 94 per cent.
Management is anticipating its golden load will return 1400 ounces when processed and result in an estimated $5.78 million, based on a $4130 price per ounce of gold, minus agreed processing costs and royalties.
It says the initial load of ore underwent metallurgical work and assaying prior to its departure and the grade was in line with its expectations.
An improvement in grade is expected as mining progresses deeper into the open pits.
The contracted deal between Horizon and Hamptons will see mining of four open pits at Boorara, containing 1.24 million tonnes of ore grading 1.24g/t gold for 49,500 ounces.
The project was initially expected to generate $30m in free cashflow at $3600 per ounce gold, however, today’s price exceeds $4100 per ounce, setting the scene for an outperformance financially.
Boorara sits adjacent to Northern Star’s massive Super Pit gold mine in Kalgoorlie that has produced more than 60 million ounces of gold.
Plans are for mining to occur for a 14-month period, with ore to be processed across a 19-month timeframe at Norton Gold Fields’ nearby Paddington plant.
Management struck an impressive deal on the mining services and load-and-haul contracts, with no payments to Hamptons required until the first gold pour has been sold and funds are in the bank.
Horizon Minerals managing director and CEO Grant Haywood said: “It is very pleasing that we are transporting our first ore delivery from Boorara, with first revenue due shortly. This milestone has been achieved despite the tight labour market during our ramp up phase and some inclement weather.”
The ore sale agreement with Norton’s will deliver 50 per cent of gross revenue to Horizon, less estimated milling costs, within five days of ore receipt based on the determined grade for each stockpile.
The remaining 50 per cent of revenue will be paid to Horizon within five days of processing of the ore, minus associated costs based on the ore’s grade, recovery levels and moisture content.
After some initial personnel shortages delayed delivery of the first ore by several weeks, the 100 per cent-owned Boorara gold project is now fully ramped-up with mining consisting of four digger shifts at site.
Horizon recently confirmed its joint venture agreement with Kalgoorlie-based contractor BML Ventures to mine 200,000t of ore from its Phillips Find gold project near Coolgardie has ratcheted-up, with mining of more than 160,000 cubic metres of pre-strip waste taking place and exposure to the underlying ore due shortly.
The ore will be toll treated at the nearby Greenfields Mill over the next 11 months to produce almost 15,000 ounces of gold, with the first ore on track to be processed from February.
It seems that Horizon has been preparing for the position it finds itself in now for some years. Over time it has amassed a stellar suite of gold deposits in and around the Kalgoorlie/Coolgardie region. It has merged with other like-minded companies, done deals with third party mills and generally prepared itself to become a cash producing miner rather than just an explorer – something that is about to happen now.
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