ASX-listed Horizon Minerals has broken ground at its Boorara gold deposit just 10km east of Kalgoorlie’s super pit with first gold now expected to be produced at the nearby Lakewood mill in July this year. Horizon said it has now bagged up all necessary approvals and permits and has $4 million in capital ready to deploy with Hampton Transport set and on call to haul the ore.
In what is fast becoming an industry trend for savvy, small-cap gold players, Horizon Minerals has chosen the contract mining and toll treatment route to generate some early cash flows at a time of stellar gold prices, with the current mining plan fully funded.
The company’s phase one feasibility study for the Boorara deposit only hit the streets back in February this year and it is moving dirt just three months later. Whilst Horizon will be watching its coffers fill from July this year, its technical team will be looking to use grade control data from this phase of mining in its full DFS for a future, larger scale project.
Boorara Stage 1 comprises free milling of oxide and transitional material from mining at three starter pits; Regal East, Regal West and Crown Jewel. Site establishment and fleet mobilisation is now complete with open cut mining underway in the Regal East pit using conventional truck and shovel operations, according to the company.
Horizon said it was planning to mine a total of just over half a million cubic metres over a six month mine life to treat 159,000 tonnes of ore at a fully diluted 1.86 grams per tonne gold. It will haul the ore along existing roads from this month to the Lakewood mill for treatment, after agreeing to terms with the owner of Lakewood, Golden Mile Milling.
The company said its current initial toll treatment production guidance was 8,500-9,000 ounces of gold at an average 91.5 per cent metallurgical recovery and an all-in-cost of $1,640-1,690 per ounce. Horizon said it expects to generate a healthy A$7.1 million in free cash flow during the 2021 financial year, based on a gold price of A$2,600/oz.
Horizon Minerals’ Managing Director, Jonathan Price said: “The commencement of mining at Boorara is a significant milestone for the Company enabling gold production and cash generation in 2020 at a time of record high Australian dollar gold prices. We welcome our local mining partners Hamptons and the Lakewood processing team who have been extremely proactive in responding to the COVID-19 pandemic and ensuring strict safety and health guidelines are observed across the operation.”
“We are all now fully focussed on safe and efficient mining operations at Boorara, generating cash to self-fund the resource growth drilling program and the completion of the larger scale and longer term production profile as part of the consolidated Feasibility Study.”
Price and his team at Horizon have delivered in spades on their promise to be mining at Boorara this calendar year and it is also perfect timing for shareholders as the gold price hovers around US$1,700 per ounce.
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By Matt Birney
