Horizon Minerals has raised $3.34 million to further develop its proposed high-grade Cannon underground gold mine near Kalgoorlie, hoping to soon tap into Australia’s recent record gold price hikes.
The company has reported strong support from new and existing Australian and international institutional and sophisticated investors and now plans to accelerate resource extension drilling at its Cannon and Penny’s Find gold deposits. It will issue 74.1 million shares at 4.5 cents per share tomorrow.
Horizon says it will use the proceeds from the share issue to fund its continuing development at Cannon, which has resources of 32,330 ounces of gold at a grade of 4.4 grams per tonne. The resource is planned for extraction using a decline from the existing pit, with three initial levels and possible additional levels pending further testing of resource extensions.
The mine is fully-permitted and final mining contract and joint venture negotiations are in progress. Horizon has agreed to a toll milling allocation at its one-million-tonne per annum Greenfields mill, 3km east of Coolgardie.
Horizon’s feasibility study for Cannon schedules production of 15,900 ounces of gold at a 90 per cent recovery rate over 13 months. Upfront capital expenditure of $4.3m is predicated upon mine development from a portal within the existing open pit.
Contract mining and toll milling is projected to deliver the company $10 million based on a gold price of $2600 per ounce and an all-in-sustaining-cost (AISC) of $1873 per ounce of gold. Management believes historic open-pit and mill operations will reduce risk due to proven metallurgy and reconciliation with previous geological models.
Horizon is also planning underground mine development at its Penny’s Find gold deposit, with a decline from the existing open pit. Current resources at the project are 43,000 ounces of gold at a head grade of 5.0g/t gold. Underground work is permitted at the mine, which is planned for sequential development following the work at Cannon.
Extensional drilling from surface and underground drilling will test strike and depth extensions and infill a second mineralised zone. Horizon will then update the ore body and mining model in the second half of this year.
The new funds raised will also be used to continue gold resource extension drilling and new gold discovery exploration within the company’s portfolio of projects surrounding Kalgoorlie, including Rose Hill, Brilliant North, Binduli and the greater Cannon Golden Ridge project areas. General working capital will also receive a top-up from the share placement.
Horizon Minerals managing director Jon Price said: “At a time of record A$ gold prices, our focus is now on advancing the high-grade Cannon underground mine into production in the second half of 2023. The mine is now fully permitted. Accelerating the drilling at the Penny’s Find gold mine will enable updated resource modelling and reserve studies to be completed to have the mine ready for development in sequence.”
Horizon has a significant 1100-square-kilometre tenement position surrounding Kalgoorlie, with a current resource base of 1.24 million ounces of gold at an average grade of 1.7g/t gold spread over 13 separate deposits. The company sees the 448,000-ounce Boorara gold deposit as the base load, complemented by high-grade open-pit and underground gold mines within a 50km radius.
It also owns the nearby Nimbus silver-zinc deposit, which contains 20 million ounces of silver.
Horizon’s sequential development plan is projected to bring early cash flow, long project life and reduce external funding requirements by growing organically as production profits flow in.
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By Terry Bates
