Horizon Minerals has awarded ASX-listed GR Engineering with the scope to complete engineering studies on the mothballed Black Swan processing facility, near Kalgoorlie, to have it roar back to life as a gold plant.
The coveted piece of infrastructure was secured by Horizon from its recent merger with Poseidon Nickel. The plant was used to process nickel before it was placed on care and maintenance.
GR Engineering’s study program, to be overseen by Horizon’s project manager Dirk Richards, will outline the best way to refurbish and repurpose the plant.
The refurbished gold plant could deliver Horizon a 100,000-ounce-a-year gold operation.
GR’s study will provide estimates of the required capital and operating costs - to an accuracy of plus-or-minus 20 per cent - to pump life back into the plant as a gold processing facility, at a time of record-setting gold prices.
The price of gold has retreated slightly this week, given the recent volatility of world stock markets, however it still sits at an impressive US$2990 (A$4973) per ounce.
This year’s gold price run of nearly 14 per cent over three months has all junior goldies exploring ways to monetise their gold-bearing deposits.
Horizon Minerals managing director and chief executive officer Grant Haywood said: “We are very pleased to have awarded this work to GR Engineering. They are a very competent group capable of delivering a quality study to refurbish and repurpose our Black Swan processing plant into a gold plant. This is another significant milestone for the company progressing Horizon towards our goal of becoming a mid-tier gold producer.”
GR Engineering is a leading WA engineering firm with extensive project experience working on processing plants in the Goldfields region.
Horizon nabbed the mothballed plant with a $30 million all-scrip deal for Poseidon, which handed the company a golden opportunity to commercialise its myriad gold deposits scattered around Kalgoorlie.
The 2.2-million-tonne per annum mothballed plant might just provide the breakthrough Horizon needs to bring more of its deposits into production.
Subject to GR’s engineering study, Horizon plans to refurbish the front end of the plant, which is 40 kilometres northeast of Kalgoorlie, and to install a gold processing back end.
The plan saves the company some significant capital costs, given management tips that the cost to replace the existing Black Swan infrastructure would be about $150M in today’s money. All Black Swan’s regulatory approvals are in place.
Not wanting to miss out on the sky-high gold price on offer, Horizon has also leapt into action to toll treat ore from two of its key gold deposits – Boorara, near Kalgoorlie’s Super Pit, and Phillips Find, north of Coolgardie.
The first 37,000t of ore from its Phillips Find joint venture and 50,604t from its Boorara mine led to the company banking a stash of cash last month.
The joint venture shared in $7.9M received from the processed Phillips Find parcel, while the Boorara ore generated $4.95M in revenue prior to treatment costs.
A further 80,000t parcel from Phillips Find will be treated at FMR Resources’ nearby Greenfields Mill in the next quarter, to be followed by an additional 80,000t to complete Horizon’s 200,000t toll treatment agreement with FMR.
Horizon has also locked in a new milling deal to process a further 70,000t from Phillips Find at Focus Minerals’ Three Mile Hill plant in September and October.
The company has made impressive progress by transforming the two projects into full-scale mining and processing operations. With gold prices soaring this year, its timing has been near-perfect.
Horizon is watching the till ringing as funds from its toll treating programs roll in. With the added potential of the Black Swan mill processing its ore from a multitude of deposits in the future, this could be one junior goldie worth keeping a watchful eye on.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Craig Nolan
