Horizon Minerals (ASX:HRZ) is drawing down US$3 million in funding to advance its Cannon Underground Gold Project in Western Australia towards a Financial Investment Decision (FID).
The company reports it has met the conditions precedent to draw down the US$3 million, which is part of a US$5 million convertible loan facility and general security deed executed with Nebari Partners on 23 November 2022.
Tranche one, which comprised US$2 million, was drawn down on 29 November 2022 to enable the deferred payment to acquire the Cannon Project.
Horizon reports all conditions precedent for tranche 2 have been satisfied, including shareholder approval and approval from the Nebari Investment Committee. As a result, funds under tranche two have been received by Horizon and are available for use.
The company also says it has secured all necessary approvals to begin developing the underground mine. These approvals include a Mining Proposal and Mine Closure Plan from the WA Department of Mines, Industry Regulation and Safety (DMIRS), along with a groundwater licence and work approvals for dewatering and pipeline construction from the Department of Water and Environmental Regulation (DWER).
Horizon reports formal mining and processing contracts, along with joint venture (JV) negotiations, are well underway with its preferred partner, FMR Investments. Once negotiations are complete, Horizon’s board will make a formal FID for the development of the Cannon Project.
Commenting on Cannon’s development, Horizon Minerals’ incoming Chief Executive Officer (CEO), Grant Haywood, says: “We are very pleased to receive the funds from Nebari in line with the agreed terms of our loan agreement on competitive commercial terms.
“This now leaves Horizon with the start-up capital and approvals needed to advance the Cannon Gold Project into development and production in the second half of 2023″
This now leaves Horizon with the start-up capital and approvals needed to advance the Cannon Gold Project into development and production in the second half of 2023.”
Horizon reports a Feasibility Study for Cannon was released on 29 March 2022, which demonstrated ‘positive’ economic results. The company also secured a 200,000-tonne processing allocation with FMR investment through the Greenfields Plant.
Additionally, Horizon plans to implement its goal of bringing a sequence of underground projects into production, starting with Cannon. This will be followed by the Penny’s Find and Rose Hill projects, which are currently under evaluation.
The company says it now has a strategy of generating continuous cash flow from all its JORC resources through contracts and JVs, underpinned by a high Australian dollar gold price to support the ‘large-scale’ exploration programs and future mine development across its core assets.
Horizon Minerals is an ‘emerging’ mid-tier gold producer aiming to become Western Australia’s next standalone gold producer. The company hosts over 1 million ounces of gold across its portfolio of assets within Western Australia, including the Boorara, Kalgoorlie Regional, and Coolgardie Regional projects.
In addition to these projects, Horizon is also developing the Cannon, Penny’s Find, and Rose Hill projects. Cannon lies 10km east of Boorara and was acquired by Horizon in October 2021.
Nebari is a US-based manager of privately offered pooled investment vehicles including Nebari Natural Resources Credit Fund I, LP, and Nebari Gold Fund I, LP.
Write to Harry Mulholland at Mining.com.au
Images: Horizon Minerals Ltd
