Horizon Minerals has established a hefty gold-silver resource after completing last month’s merger with Greenstone Resources, covering the new entity’s entire holdings in Western Australia’s Goldfields region.
The company says it now boasts a resource inventory of 1.8 million ounces of gold and 20 million ounces of silver and is now poised to generate accelerated cash flow from multiple deposits near the historic mining hub of Kalgoorlie.
As part of the merger, Horizon has also inherited from Greenstone a 50 per cent share of the Mt Thirsty project near Norseman – a joint venture (JV) with Conico that hosts a total resource of 283,000 tonnes of nickel, 40,000 tonnes of cobalt and 296,000 tonnes of manganese. The new entity will also have full control over the Burbanks gold project and the Phillips Find operation.
Horizon Minerals managing director and chief executive officer Grant Haywood said: “It is very pleasing to have the Burbanks and Phillips Find assets under single ownership with Horizon’s complementary and extensive project base. Together this provides a 1.8 million-ounce gold portfolio, which is a great platform to implement our near-term strategy of cashflow from operations and further growth into the medium and long term.”
The upgrade in gold inventory has predominantly come from the amalgamation of ownership at the Burbanks open pit and underground projects that have a combined resource of 465,570 ounces. Considered a cornerstone asset by the company, Burbanks sits on the southern boundary of the township of Coolgardie and is notable for the high-grade nature of its underground deposit running at 4.4 grams per tonne gold for 167,000 ounces, while the open-pittable section hosts a 1.3g/t deposit for 297,000 ounces.
Horizon’s existing 100 per cent-owned Boorara gold project, also considered a cornerstone project for the company, lies adjacent to the Northern Star Resources-owned Kalgoorlie Super Pit that hosts a resource of 448,000 ounces at 1.26g/t.
In its merger presentation in February, Horizon laid out a dual strategy – now being implemented post-merger – to fast-track production given the current buoyant gold price of $3634 an ounce. The plan, in simple terms, is to generate low-capital cash flow through JV mining and toll treating some of Horizon’s multiple smaller, mine-ready projects such as Cannon and Pennys Find – which have a combined resource of 95,000 ounces grading more than 4.25g/t – and then directing that free cash from production towards Boorara and Burbanks.
Another contender for early production could be Phillips Find, which hosts 54,000 ounces at 2.3g/t.
Additionally, to boost short term cash flow, Horizon is close to signing a 1.4 million-tonne ore sale agreement with Paddington Gold, subject to final negotiations, to process ore from Boorara from September. The agreement will see Paddington pay 50 per cent of gross revenue gleaned from processing the ore, before the estimated processing and royalty costs, five days after the ore is delivered to the mill.
With a combined resource of 914,000 ounces at 1.7g/t, both Boorara and Burbanks, once they are developed, are seen as integral to the company’s hopes of supporting stable, long-life producing operations with extensive exploration upside.
With so many irons in the fire, consolidating the ownership of some of its major projects and firming up the resource estimate are clearly important pieces of the puzzle for Horizon as it looks to accelerate activities to take advantage of the currently stellar gold prices.
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By James Pearson
