Horizon Minerals Limited (ASX: HRZ) has announced an encouraging update on its growth strategy and outlined key production and resource growth milestones for 2020 and beyond.
The company reported that an updated strategic plan is being implemented with a focus on near-term cash generation from gold production, reserve and resource growth, and further asset consolidation in the West Australian goldfields.
The Company said that its key objective is to develop a long-term production profile centred around Boorara gold project and expand production via satellite deposits in close trucking distance to the centralised processing facility.
HRZ reported that updated geological models and reserve/resource estimates for all projects will feed into the Feasibility Study due for completion in the December Quarter 2020 with the aim of delivering a minimum 4-5 year production plan underpinning a long-term processing solution.
The company announced that the 2020 reserve and resource drill program is in the final planning stages and includes infill and extensional drilling at core project areas including Boorara, Rosehill, Binduli and Teal.
Horizon’s West Australian assets
Horizon Minerals Limited is focussed on gold in the Western Australian goldfields. The company has assets covering 850km2 on major geological structures in close proximity to the city of Kalgoorlie-Boulder.
Boorara Gold Project
The company’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, Western Australia.
The Boorara 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.
Plans to enter production
The Company reported that its key objective remains to develop a long-term production profile centred around the base-load Boorara gold project complemented by higher grade open pit and underground satellite deposits in close trucking distance to a centralised processing facility.
An updated global Mineral Resource Estimate is expected in the June Quarter 2020.
Grade control drilling completed
HRZ said that an 18,000m grade control drilling was completed in December 2019 with results expected in the March Quarter 2020.
The company said that on completion, the aim is to mine up to three starter pits and process the ore at a third-party toll mill in close proximity.
HRZ said that the statutory approvals and toll milling negotiations with multiple potential milling partners are well advanced, enabling mining to commence in the June Quarter and milling in the September Quarter 2020.
Feasibility study by end of 2020
The company reported that the resultant mine and mill reconciliation data will then be used to compare to the global resource model ahead of the larger scale mine development assessment being undertaken as part of the Feasibility Study due for completion in the December Quarter 2020.
The company said that the production guidance and project economics will be provided on completion of the Stage 1 evaluation in the current March Quarter 2020.
HRZ said that further stages of Boorara mine development will be determined by the outcome of the mining, pit mapping and mill reconciliations of Stage 1. The company noted that Boorara resource model will be updated during this period and fed into the Feasibility Study.
Production pipeline
The company noted that a number of 100% owned projects have the potential to add significant mining inventory. HRZ said that three projects have been prioritised based on current resource status, grade and open pit and underground upside potential.
The Company reported that it has now commenced an internal and independent review of the geological models for Rosehill, Gunga West, and Golden Ridge projects and expects to provide a resource update on these projects in the March Quarter 2020.
Meanwhile, the company is planning further infill and extensional RC and diamond drilling in H2 2020 for the Crake project, part of the Binduli project area.
Horizon reported that it has developed priority resource growth and new discovery targets for drilling in 2020, which includes Boorara near mine (including Balagundi, Kanowna South, Golden Ridge, and Boorara South); Coote, Darter, and Honeyeater within the Binduli gold camp; Capricorn, Baden Powell, and Teal.
Resource growth through acquisitions and JVs
The company said that the staged development of Boorara is anticipated to provide early cash flow and improved geological confidence while assessment of a larger scale development is evaluated, including options for a stand-alone processing facility and collaboration with neighbouring companies.
The Company said that it will continue to assess further consolidation opportunities and seek to generate additional value from the non-gold projects and existing joint ventures. It may be noted that the current joint venture with Richmond Vanadium Technology (RVT) covering the 2.6Bt Richmond vanadium project in central north Queensland is in its second stage of earn in.
Upcoming milestones
The company has announced the upcoming planned milestones for the next four quarters.
March Quarter: Boorara infill drilling results, new geological model, mine optimisation, design and economic modelling results, drilling results from Rosehill, updated resource estimates for Rosehill, Gunga West and Golden Ridge.
June Quarter: Decision to mine stage 1 of Boorara and mine commencement, Richmond vanadium JV update, updated Mineral Resource Estimate
September Quarter: Aiming for first gold production and cash generation from Boorara, commencement of large-scale resource and reserve growth drilling program.
December Quarter: drilling results, resource and reserve update, consolidated Feasibility Study results including options for stand-alone or collaborative centralised processing plant.
Management comments
Horizon Managing Director Jon Price said: “The Company has now reset its immediate growth plan while maintaining our overriding objective of building an emerging mid-tier gold business centred in the heart of the West Australian goldfields.
This strategy is centred around the exciting Boorara gold project and existing satellite projects in close proximity. We now look forward to delivering on our promises, moving into production, generating cash to support our strategy, growing our resource base and building a long term sustainable production profile for the benefit of all stakeholders.”