Horizon Minerals has secured a second tranche of funding of US$3 million (AU$4.36 million) to continue the development of its Cannon underground gold project in Western Australia’s Goldfields region.
Management says it has also received all the government approvals needed to kick off underground development, including an approved mining proposal and mine closure plan from the Department of Mining, Industry Regulation and Safety.
Last November, Horizon inked a loan agreement and general security deed with US-based fund manager Nebari Partners to secure a US$5 million (AU $7.37 million) funding facility. The loan was split into two parts – a US$2 million (AU$2.95 million) stipend that helped Horizon defer payment and complete the Cannon project acquisition, in addition to the latest tranche that the company has now banked.
Horizon Minerals incoming chief executive officer Grant Haywood said: “We are very pleased to receive the funds from Nebari in line with the agreed terms of our Loan Agreement and on competitive commercial terms. This now leaves Horizon with the startup capital and approvals needed to advance the Cannon gold project into development and production in the second half of 2023.”
In March last year, Horizon unveiled results from a prefeasibility study (PFS) of its underground gold project. It showed that Cannon is projected to generate $10.1m of net cash flow over a 16-month mine life at $2600 per ounce of gold, with an all-in sustaining cost of $1873 per ounce. The planned mine is part of the company’s 1.15-million-ounce Kalgoorlie-Boulder gold resource, which is split among 10 deposits.
The Cannon PFS also shows a mineable ore reserve of 135,000 tonnes at 4.1 grams per tonne gold for 17,680 ounces. The PFS anticipates contract mining and transport, with ore being toll-treated at the nearby Lakewood mill.
Management says testing indicates a 90 per cent recovery, giving a projected gold production of 15,900 ounces during the 16 months. Mining would be conducted from a decline in the existing open-pit mine.
The resource at the Cannon underground project is 226,000 tonnes grading 4.4g/t gold for 32,330 ounces at a cut-off grade of 1.0g/t gold.
Horizon is now knee-deep in negotiations in relation to mining and processing and once the deals are wrapped up, it will be back to the board for a formal financial investment decision.
The company sees its 448,000-ounce Boorara gold deposit as its base load, complemented by high-grade open-pit and underground gold mines within a 50km radius. It also owns the Nimbus silver-zinc deposit, containing 20 million ounces of silver, in the Kalgoorlie area.
With a fresh income stream close to coming online, Horizon will then be eager to pour its new funds towards bigger production and exploration dreams.
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By Steve Kaless
