Horizon Minerals Limited (ASX: HRZ) has announced a highly positive update on its Boorara Stage 1 gold mine in Western Australia.
The company reported that Board approval has been received for the development of the first stage of the Boorara gold mine.
HRZ said that all necessary statutory approvals for mining to commence are now in place and the A$4 million Working Capital Facility is also fully drawn down.
Horizon announced that the local contractor Hampton Transport Services Pty Ltd has been awarded the open pit mining and haulage contract.
The company said that the site establishment and mobilisation of mining fleet complete with first ore is expected in the current month and first ore delivery to the mill in June 2020.
Horizon reported that ore treatment agreement is in place with Golden Mile Milling for ore processing at the nearby Lakewood Mill with the first milling campaign scheduled for July 2020.
The company said that the Boorara ore will be processed in monthly campaigns under Horizon supervision to enable mill grade reconciliation data to be compared against the Reserve and Resource models.
HRZ announced a gold production guidance of 8,500 – 9,000 ounces at an average 91.5% metallurgical gold recovery and an All In Cost using toll milling of $1,640 – $1,690 per ounce.
Horizon said that at current A$2,600/oz gold price, Boorara Stage 1 is anticipated to generate A$7.1 million in free cash flow within Financial Year 2021.
Horizon’s 100% owned Boorara Gold Project is 10 kilometres east of Kalgoorlie’s Super Pit gold mine located on the eastern edge of the city of Kalgoorlie-Boulder in the Goldfields of Western Australia.
The project contains over 1.5 kilometres of gold mineralisation striking north-west at 330 degrees. The project is divided into three project areas, namely Royal (Southern), Crown Jewel (Central) and Regal (Northern) deposits.
The Boorara deposit has a JORC 2012 Mineral Resource Estimate of 16.45 Mt at 0.96 g/t gold for 507,000 oz of gold at a 0.5 g/t lower cut-off grade.
The company had recently completed a positive Feasibility Study on the Boorara project, after which the development of the Boorara Stage 1 gold mine has now commenced. The company reported the feasibility Study results for the project as below.
Boorara Stage 1 development
The company announced that Boorara Stage 1 would comprise free milling oxide and transitional material with grade control drilling completed on 4m X 10m in the north and 5m X 10m in the central areas.
Mining comprises three starter pits; Regal East, Regal West, and Crown Jewel.
HRZ said that locally-based contractor Hampton Transport Services Pty Ltd was awarded the mining and haulage contracts to complete the works.
This includes total mining volume of 520,000 BCM over a six month mine life; ore mining of 159,000t at a fully diluted grade of 1.86g/t Au; and ore haulage on existing roads to the third-party processing plant.
The company said that the site establishment and fleet mobilisation is now complete with open cut mining underway in the Regal East pit using conventional truck and shovel operations.
The company said that all staff will be resident in Kalgoorlie-Boulder and will observe strict safety and COVID-19 operational guidelines to minimise and reduce risk to employees, their families, and the local community.
Mining to commence soon
The company announced that following the removal of approximately 6m of waste overburden in some areas of the Regal East pit, ore mining will commence on a 2.5m flitch height to minimise dilution and maximise ore recovery.
HRZ said that ore and waste mining will be conducted on day shift only under the control of in pit mining geologists with the main ore zone enabling visual geological control in addition to grade control drilling flitch plans and ore markups.
First ore this month
The company said that the first ore is expected from Regal East in the current month. HRZ said that Regal West and Crown Jewel pits are planned to be developed in parallel to enable optimal cycling of mining and drill and blast activities.
The company said that ore will be hauled on existing roads to Golden Mile Milling’s Lakewood processing plant with an Agreement in place for treatment of the ore mined. HRZ said that treatment will be completed on a monthly campaign basis under Horizon supervision.
First gold expected in July
The company said that first ore delivery to the mill is anticipated in June 2020, with the first gold production scheduled for July 2020.
The company said that it expects gold production to reach between 8,500 ounces and 9,000oz with an average recovery of 91.5% and all in costs using the toll milling ranging between A$1,600-1,690/oz.
Horizon reported that at current A$2,600/oz gold price, Boorara Stage 1 is forecast to generate A$7.1 million in free cash flow within Financial Year 2021.
Horizon Managing Director Jon Price said: “The commencement of mining at Boorara is a significant milestone for the Company enabling gold production and cash generation in 2020 at a time of record high Australian dollar gold prices.
We welcome our local mining partners Hamptons and the Lakewood processing team who have been extremely proactive in responding to the COVID-19 pandemic and ensuring strict safety and health guidelines are observed across the operation.
We are all now fully focussed on safe and efficient mining operations at Boorara, generating cash to self-fund the resource growth drilling program and the completion of the larger scale and longer-term production profile as part of the consolidated Feasibility Study.”