Horizon Minerals has locked in a $30 million raise at 4.3 cents per share, aiming to bolster the company’s finances to complete refurbishment studies on its Black Swan processing plant in Western Australia and fund a range of new exploration and resource drilling programs.
The funds raised from local and offshore institutional investors will support drilling expenditure and engineering studies for its coveted Black Swan plant, ahead of an expected influx of cash from its gold mining operations at Boorara and Phillips Find.
The Black Swan plant, acquired from Horizon’s merger with Poseidon Nickel, may become the jewel in Horizon’s crown. It will allow the company to control its processing operations and potentially ramp up the ore feed from myriad deposits scattered around the Kalgoorlie region.
Engineering studies will be undertaken to support Black Swan’s refurbishment. Horizon initially plans to repurpose the previous nickel plant into a gold processing facility. If the plant can be restarted, it may provide a significant boost to Horizon’s processing capacity without the company having to rely on toll-treating arrangements with local mills.
A refurbished 2.2-million-tonnes-per-annum processing facility could potentially deliver Horizon a 100,000-ounce-a-year gold operation.
An initial $11.8M will be raised in tranche one under the company’s available placement capacity through the issue of more than 218 million shares at 4.3c. A conditional placement for the remaining $18.2M from the issue of 422.823 million tranche two shares will be subject to shareholder approval at a general meeting expected to be held in July.
In an encouraging sign for the company, each Horizon director plans to participate in the tranche two placement through the issue of shares for a total subscription value of $20,000 each, subject to shareholder approval.
Management says the placement introduced several new institutional investors to its company register and will help it accelerate planned exploration and infill drilling programs.
Horizon Minerals managing director and chief executive officer Grant Haywood said: “We are pleased with the support for the placement and welcome a number of highly credentialed institutional and sophisticated investors to the register.”
The company plans to test its Burbanks deposit for resource extensions, additional to an infill program for resource classification purposes. Similar drill programs will be undertaken at its Crake and Coote deposits.
It further plans to plunge the drill bit into a range of targets, including Wilsons, Kestrel, Greater Boorara and Nimbus, and to test additional ground at Phillips Find.
Funds are also planned to strengthen the company’s working capital position until significant ore is processed from Boorara, which may open the floodgates to a wave of cash with today’s gold price hovering near US$3341 (A$5117) per ounce.
Retiring company debt is another possible option if sufficient funds remain available.
The first tranche share placement is expected to settle on May 29, with shares issued on or about May 30.
Horizon recently revealed an updated mineral resources summary that highlights a massive nickel boost from its recent merger with Poseidon.
Some 422,000 tonnes of nickel metal now sit within the company’s mineral portfolio, which also includes 1.8 million ounces of gold scattered across a range of Goldfields deposits.
The deposits include mining at Boorara and Phillips Find, generating significant levels of cash at today’s surging gold price.
The merger with Poseidon delivered Horizon with a raft of promising nickel projects. The Black Swan project stands out among a group, including the Silver Swan and Golden Swan deposits, the Silver Swan tailings resource and the Lake Johnston and Windarra projects.
The resource summary also details a more than handy addition of 20.2M ounces of silver, 104,000t of zinc and 7800t of cobalt.
Not wanting to be late to the gold party taking place, Horizon 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 wad of cash in March.
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.
Horizon appears to have the backing of some large players. Its share registry might generate even more interest if the gold price gets another leg-up.
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By Craig Nolan
