Horizon Minerals has moved to monetise its non-core assets after entering into a binding option and sale deed with Dundas Minerals for the former’s Baden Powell/Scotia and Windanya gold projects near Kalgoorlie in Western Australia.
The option covers all mineral rights over 16 prospecting licenses, two mining leases and one mining lease application, across 3230 hectares about 45km north of Kalgoorlie.
Under the terms of the deal, the option provides for Dundas paying Horizon a $500,000 non-refundable option fee. It must pay $375,000 within five days of signing – $125,000 in cash and $250,000 in Dundas shares. The additional $125,000 in cash is payable one year after the execution date.
Dundas must also spend at least $500,000 on ground exploration within two years prior to exercising the option.
Once the option is exercised, Horizon will sell 85 per cent of its interest in the tenements for $1 million in cash, shares or both and will retain a 15 per cent interest free-carried to a decision to mine, when a joint venture will be formed with Dundas.
Horizon Minerals chief executive officer Grant Haywood said: “We are continuing to review our suite of assets including optimisation and rationalisation of our large tenement portfolio, both through acquisition and divestment opportunities. This option agreement with Dundas fits this strategy via monetising non-core assets to a very capable team to take the project forward. It will reduce our holding costs and bring additional cash and investments into the business, whilst still retaining an interest in the projects for any potential upside.”
In September last year Horizon published a Baden Powell resource of 595,000 tonnes grading 1.2 grams per tonne gold for 23,000 ounces after compiling drill data from 2020 and 2021. Similarly, after reviewing drill data from 2019 and 2021 at the company’s Capricorn prospect within its Windanya project, Horizon generated a resource of 659,000 tonnes grading 1.2g/t gold for 25,000 ounces.
The Baden Powell and Windanya project areas are within the highly-prospective Bardoc tectonic zone, a major greenstone belt between Kalgoorlie and Menzies.
Dundas says it is already finalising plans for its first phase of exploration at both projects. It will comprise soil and auger sampling programs to test for possible under-cover extensions to areas of known gold mineralisation or historic workings, in addition to testing for other mineral anomalies.
The company expects to collect about 1500 samples when the campaign kicks off next month. It believes both sites are also prospective for laterite nickel deposits, despite limited exploration for the metal in the past.
In addition to its agreement with Horizon, Dundas has made application for three prospecting licences in its own right that are contiguous to Horizon’s Baden Powell/Scotia tenements.
The deal appears to be beneficial for both parties, a classic “win-win” if the option is exercised and a joint venture is formed. Dundas will have acquired some prime real estate in WA’s gold heartland, while Horizon will maintain a vested interest in its former operations.
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By Michael Philipps
