Horizon Minerals has signed a significant new joint venture (JV) deal aimed at developing and mining two open pits at its Phillips Find gold project in Western Australia’s Goldfields region in a bid to cash in on the continuing record high prices for the precious yellow metal.
The deal with experienced Kalgoorlie-based contractor BML Ventures is underpinned by a plan to produce 15,000 ounces of gold, with ore from the site to be treated at the nearby Greenfields mill and cash flow to be split in half after all costs have been deducted.
Horizon says the JV will provide a low-risk opportunity to generate cash from the rampaging gold price, with BML funding all project costs and taking responsibility for all management, technical, operational and maintenance roles.
The company recently entered into a binding toll milling agreement with FMR Investments, the owner of the Greenfields Mill, to treat 200,000 tonnes of its ore. That ore will come from the Phillips Find project – an asset now in its portfolio as a result of a recent merger with Greenstone Resources.
Horizon Minerals managing director and chief executive officer Grant Haywood said: “We are pleased to be progressing the development of our Phillips Find gold project. We are expecting final permitting to be approved shortly, with the commencement of mining to follow and gold production commencing in the March 2025 quarter.”
The company says it lodged the relevant mining proposal for the project to the Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) in early June and expects the approval to be received shortly. It noted that the proposal is the final approval required to begin mining at the site.
With the approval still pending, management has advised that it has renegotiated the milling schedule at Greenfields to June next year. Management says the delay does not affect any part of its JV arrangement with BML.
Horizon says pre-production is well advanced at the site. It expects crews engaged to clear and establish the site and a 200-tonne excavator to be mobilised imminently, subject to the mining proposal approval being received.
The company has also kicked off mining activities at its recently-approved Boorara gold development operation adjacent to Northern Star’s massive Super Pit mine in Kalgoorlie that has produced more than 60 million ounces of gold. Management last month gave approval for the mining of four open pits at the site that contains 1.24 million tonnes of ore grading 1.24 grams per tonne gold for 49,500 ounces and says it has already kicked the plan into action.
Horizon’s recently-appointed contractor Hamptons Transport has established a mine-ready site to enable drill-and-blast activities, grade-control drilling and the start of load-and-haul production mining.
Plans are for mining to occur for a 14-month period, with ore to be processed at Norton Gold Fields’ nearby Paddington plant. It is expected to generate $30 million in free cash flow for Horizon at a gold price of $3600 in local currency.
Today’s gold price is sitting at more than $3760 an ounce.
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. Its 100 per cent-owned Boorara gold project sits some 15km east of the gold mining City of Kalgoorlie-Boulder.
BML has been in the news lately, kicking lucrative goals in a similar deal with ASX-listed junior Auric Mining. Auric recently revealed that BML had delivered 154,000 tonnes to the Greenfields Mill and gold sales from its JV for this year have exceeded $18.2 million, with a highest price achieved of $3727 in Australian dollars per ounce.
The first cash for the year of $3 million resulting from the link-up is soon expected to be land in Auric’s bank account.
If the current gold price continues to reach record highs, the mining of simultaneous operations for the shiny yellow metal could see Horizon awash with cash to fund its next project.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Craig Nolan
