Horizon Minerals (ASX: HRZ) has kicked off mining activities at its Phillips Find gold project outside Kalgoorlie in WA. Pre-strip mining operations are underway at the joint venture with first gold ore expected to be mined by next month.
Located 45km northwest of Coolgardie in the Eastern Goldfields, Phillips Find represents Horizon’s second mining operation in its gold portfolio, with ore set to be mined from two small open pits at the project that contains a small yet high-grade 54,000-ounce gold resource grading some 2.3 grams per tonne.
Phillips Find is a 50/50 toll treating joint venture with specialist miner BML Ventures, who have taken on all project costs, including management, technical, operational, and maintenance roles, while Horizon oversees operations.
The project targets two existing open pits, Newhaven and Newminster, with advanced mining efforts already removing some 160,000 bank cubic metres (BCMs) of pre-strip waste.
Horizon says net cash flow from the project will be split equally between the two parties after the initial cost recovery. Plans are to produce some 15,000 ounces of gold, with ore from the site to be treated at the nearby FMR Investment’s Greenfield mill.
The company says initial ore processing is expected take place from February through to June next year and is set to complement its current ore processing from its primary Boorara gold project near Kalgoorlie.
Management anticipates its first gold pour this quarter from Boorara saying it believes the company is well-positioned to make strong cashflows in this high gold price environment.
We look forward to commencing the grade control program early in December and the first mining of gold ore occurring also before years end.
Horizon Minerals Managing Director and CEO Grant Haywood
The company has advanced at a rapid clip recently having boosted its gold portfolio to some 1.8 million ounces going 1.84g/t while at same time diversifying into multicommodity projects, including the takeover of Poseidon Nickel and its mothballed mining plant for $30 million in scrip less than a month ago.
Poseidon’s 2.2m tonne per annum mothballed mining plant just might represent the breakthrough Horizon needs to kick-start development with its myriad of gold deposits scattered around Kalgoorlie into production.
The deal will result in Horizon shareholders owning 70 per cent of the combined entity and Poseidon shareholders will own 30 per cent.
Management says that Poseidon’s Black Swan mining plant and the existing Black Swan infrastructure would cost $150m to replace today, making the $30m takeover appear to be a no brainer for Horizon.
Horizon has been especially lively in the gold M&A sector over the past few years, from taking over companies with strategic assets to picking up stranded deposits, it seems the company’s final transition towards becoming a mid-tier gold producer is well within sight.
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