ASX-listed Kalgoorlie gold miner, Horizon Minerals, has picked up a 50 per cent stake in the high-grade Penny’s Find underground satellite gold deposit in WA’s Eastern Goldfields for $1.5 million cash.
As part of the transaction that sets up a 50:50 joint venture, the company has also agreed to fund the proposed development of the historic gold mine about 50 kilometres north-east of Kalgoorlie to the tune of an additional $1 million.
Vendor Orminex Ltd will be free carried for the period it takes Horizon to spend the $1 million, after which both parties will then contribute equally to expenditure relating to the JV.
Perth-based Horizon also secured an exclusive right from Orminex to acquire the remaining 50 per cent of the Penny’s Find project on sale terms to be agreed towards the end of 2022, once the contracted toll milling of 230,000 tonnes of its ore has been carried out.
Penny’s Find hosts an indicated and inferred mineral resource of 248,000 tonnes of ore going 7.04 grams per tonne for 56,000 ounces of contained gold based on a previous owner’s estimate. Open-cut mining at Penny’s Find was completed in 2018, with 18,350 ounces of gold recovered from the treatment of 140,000 tonnes of ore that averaged a grade of 4.5 g/t gold.
According to the company, there is already a toll processing contract in place for Penny’s Find with Golden Mile Milling, or “GMM” at its Lakewood mill, 7km west of Horizon’s flagship Boorara gold project 10km east of Kalgoorlie. GMM is the same outfit currently toll milling Boorara ore sourced from three trial open pits that were mined this year.
Horizon says mine development work at Penny’s Find is well advanced and approvals have been obtained for underground mining to kick off in the first half of calendar 2021.
Horizon’s core focus remains firmly set on developing a stand-alone gold production business in the Kalgoorlie and Coolgardie region and this acquisition aligns with this focus and our strategy of further regional consolidation of advanced development assets in close proximity to our core assets.
Penny’s Find has had considerable work completed in the past, including resource modelling, open-pit mining, processing and environmental studies which enables rapid advancement of the underground deposit. We also see considerable growth potential below the current high-grade resource which remains open at depth.
The company indicates the acquisition of the Penny’s Find project aligns with its regional consolidation and growth strategy that involves picking up advanced satellite deposits within trucking distance of a proposed brand-new gold processing plant facility at Boorara.
In the case of Penny’s Find, toll treatment of its ore is designated to generate initial gold production – and near-term cash flows – for Horizon, with the contract period in place for roughly 18 months between July 2021 and the end of 2022. Beyond that, it says, “the project has the potential to provide further high-grade satellite ore at the proposed stand-alone plant at Boorara”.
To that end, further resource extension drilling is planned from underground as the mine develops.
Horizon intends incorporating Penny’s Find as the fifth satellite deposit in its all-encompassing Boorara feasibility study, which is also set to evaluate the Binduli/Crake, Teal, Rose Hill and Kalpini satellite gold resources and is scheduled for release in the June 2021 quarter.
The Boorara measured, indicated and inferred resource of 16.45 million tonnes grading 0.96 g/t for 507,000 ounces of contained gold remains the cornerstone of the company’s overarching proposed project development.
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