Horizon Minerals has reached an agreement to acquire the remaining 50 per cent of the high-grade Penny’s Find gold project from Labyrinth Resources. Horizon will transfer $500,000 cash, $250,000 worth of Horizon shares and a series of smaller payments including net smelter royalties pending Horizon bringing the project into production which lies 50 kilometres east of Kalgoorlie.
A joint venture agreement was signed between Horizon and Labyrinth Resources, formerly known as Orminex, earlier in the year. A series of RC and diamond drill programs were completed by the joint venture partners that lead to an updated mineral resource estimate in July for the Penny’s Find deposit.
The Penny’s Find deposit houses 250,000 tonnes grading a whopping 5.22 grams per tonne gold for 42,000 ounces of gold with plenty of upside thanks to a low grade 1.5 g/t gold cut-off.
Labyrinth made the strategic decision to part with the Penny Gold asset to instead focus on its recently acquired Labyrinthe and Denain gold projects crossing Ontario and Quebec, Canada. The Labyrinthe project, with Labyrinth described as a transformation acquisition, hosts an immediately accessible historic underground mine.
The $250,000 worth of Horizon shares being issued to Labyrinth will be transferred at a price based on the 10-day volume weighted average price and will be escrowed for six months.
Several deferred payment obligations also make up part of the agreement. A $200,000 cash payment will be made upon commencement of mining at Penny’s Find with another $200,000 to be paid upon first gold being poured. Additionally, a contingent non-commencement of mining payment of $100,000 will be payable if Horizon decides to not continue with mining activities.
The first 50,000 ounces of gold produced at Penny’s Find will accrue a net smelter royalty of 5 per cent payable to Labyrinth with a 2.5 per cent net smelter royalty for every ounce produced thereafter.
Horizon plans to evaluate its now 100 per cent owned Penny’s Find underground deposit and complete further infill and extensional drilling. Following further drilling efforts to shore up the resource at Penny’s Find the company aims to assess the development options including the near-term mine development options and toll treating options.
The project may also be included into the company’s consolidated feasibility study.
With the Penny’s Find deposit now sitting snuggly under one roof and with a postal address just a stone’s throw from the world-famous Golden Mile in Kalgoorlie, Horizon will no doubt be looking forward to shifting through the gears next year. Firstly, the company has its eyes set squarely on delivering a pre-feasibility study next year with the goal of kick-starting mining operations the ultimate prize.
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By Matt Birney
