Horizon Minerals (ASX: HRZ) has revealed details about its pathway to gold production and a longer-term project pipeline relating to four of the company’s extensive suite of projects, mostly within 35kms of Kalgoorlie.
The details provide a snapshot on the company’s ramp-up work, including bringing on the underground operations at its Cannon and Penny’s Find projects and its open-pit developments at Kalpini and Boorara.
At Cannon, preparations for the underground operations include construction of the vital dewatering pipeline between the old Cannon open-pit and the company’s adjacent Golden Ridge mining operation.
Management says it has already cranked up the pumps and expects it will take about three months before Cannon is sufficiently dewatered to expose the proposed portal position before it can kick off the underground development.
Horizon is also seeking tenders from three underground contractors which it will feed into its spreadsheets where it will update the contract pricing and the latest gold price. First ore production from Cannon is expected in the December quarter.
Late last year Horizon released details of its updated Penny’s Find underground resource above the 260m relative level, revealing a mineral resource estimate of 429,000 tonnes going 4.57g/t gold for 63,000 ounces of gold.
Management had said previously more than 80 per cent of the resource is now in the indicated resource category and could be incorporated into the ongoing mine optimisation and underground design work.
The indicated resource stands at 305,000 tonnes grading 5.19 g/t gold for 51,000 ounces of gold at a 1.5g/t gold lower cut-off grade.
The company says a pre-feasibility study (PFS) on the underground project is “progressing as planned” and expects it to be finished, complete with maiden ore reserve numbers, by the end of the June quarter.
Horizon’s Kalpini project is the most distant of the company’s operations under current consideration, at about 60km north-east of Kalgoorlie. Management says its open-pit optimisations there at a modest gold price of $A2800 per ounce using toll treatment of the ore show “favourable cash flows”.
At Boorara, about 19km south-east of Kalgoorlie, Horizon has two project developments on the go. The first comprises another round of open-pit optimisation by AMC Consultants for a short-term open-pit toll treatment operation, exploiting near surface, mostly oxide ore feed which has also come up with initial favourable cash-flow indications at a $A2800 per ounce gold price.
The second potential string in the Boorara bow is a proposed longer term development which contemplates heap leach and/or carbon-in-leach (CIL) processing pathways, which, if combined, could entail CIL processing of higher grade ores and heap leaching of lower grade material.
A feasibility study to explore both avenues is underway and the company says initial indications are that at A$2800 an ounce, “substantial” cashflows might be available from the longer term operation.
Horizon is in early discussions with several potential joint-venture partners and open-pit mining contractors to fast-track open-pit production from new areas which include Boorara, Kalpini and Monument which sits just south of Cannon.
Horizon will now look to secure tenders and negotiate with its preferred underground mining contractor or potential partner for the Cannon underground development to get it ready for a final investment decision.
It also needs to finalise a 200,000 tonne toll milling allocation with FMR Investments’ Greenfields mill near Coolgardie and identify additional milling capacity within the Kalgoorlie / Coolgardie region.
Mine designs for the short-term open pit at Boorara and Kalpini need to be completed for mining contractors to estimate pricing and to complete studies and provide scope for a potential investment decision later in the year.
Further work will involve negotiating mining and haulage contracts for Boorara, Kalpini and Monument.
Mineral resource estimates for the Pinner and Monument projects are also on the drawing board and those estimates will be used to run some mining optimisation scenarios to establish their open-pit potential before obtaining mining approvals for Kalpini, Pinner and Monument.
Horizon says it also needs to complete work on its proposed merger with Greenstone Resources to enhance its long-term production profile with development-ready high grade projects. The two companies announced their merger intentions in February to create a new gold producer in the WA goldfields.
Horizon currently has 15 separate gold-mineralised potential open-pit and underground resources in its inventory in all stages of evaluation and resource categories, for a grand total of 23.22 million tonnes at an overall average grade of 1.69g/t gold for 1.262 million ounces.
Greenstone will bring to the merger a global resource of 6.8 million tonnes at 2.4g/t gold for 520,000 ounces of gold, including near-surface resources of 352,000 ounces going 2.0g/t gold and underground resources of 168,000 running 4.2g/t gold at Burbanks, just 12km from the Greenfields toll treatment mill.
The combined resources of the two companies will create a significant mid-tier gold company when the merger is effected.
Horizon has plenty on its plate right now and plenty of mining options to choose from. And with the gold price hovering around historic highs, now is probably a good time to go mining.
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