Fuelled by rising commodity prices, ASX-listed Horizon Minerals’ high-grade Nimbus silver-zinc project near Kalgoorlie is back in play, with all options on the table, according to the company, and a few sniffs from interested third parties having already been received.
The Perth-based, Kalgoorlie-focused company, which this month launched a massive 70,000m aircore, RC and diamond drilling campaign at its adjacent flagship Boorara gold project, has kicked off a strategic review of Nimbus designed to maximise value from the historic mine.
It is considering the merits of divestment, joint venture or stand-alone development possibilities.
Horizon picked up Nimbus, located 15km east of Kalgoorlie-Boulder, from previous owners Polymetals Mining almost nine years ago, and with the silver price having surged by 33 per cent to A$37 an ounce in the past six months, it now appears to have been an astute buy.
Between 2003 and 2007, Polymetals produced 3.6 million ounces of silver from the processing of 320,000 tonnes of ore averaging a whopping grade of 352 grams per tonne silver at Nimbus. And between 2015 and last year, the treatment plant was decommissioned, then removed and the mine site rehabilitated.
Nimbus still hosts an unexploited mineral resource of 12.1 million tonnes grading 52 g/t silver and 0.9 per cent zinc for 20.2 million ounces of contained silver and 104,000t of contained zinc, respectively.
The total resource contains high-grade lodes that lie immediately beneath the historic Discovery open pit. The resource estimate for the high-grade lodes currently stands at 260,000t going an eye-watering 774 g/t silver and 12.8 per cent zinc for 6.4 million ounces of contained silver and for 33,000t of contained zinc.
With silver and zinc prices showing sustained increases in recent times, the company is now assessing all options to create value from this historically successful mining operation at Nimbus.
We see significant opportunity to develop the high-grade lodes at Nimbus either on a stand-alone basis or in joint venture with an expert group. There remains potential for the project to grow in scale and quality with further exploration beyond the current mineralised envelopes. Any strategic option we elect to pursue for Nimbus will take into account this growth and future development potential.
The strategic review of Nimbus will take in a detailed assessment of all previous geological, metallurgical, and engineering feasibility study work completed to 2017 when the project was put on hold due to lower commodity prices.
Blessed with a location in close proximity to a wealth of existing infrastructure in the wider Kalgoorlie-Boulder region, the deposit remains open at depth and along strike with significant potential to increase existing silver-zinc resources with further drilling, according to Horizon.
Revised processing flowsheets for Nimbus concentrate production will have to factor in complex mineralogy that includes the presence of mercury in the supergene and oxide zones.
Underpinned by higher silver prices, the high-grade lodes will be evaluated for potential development and concentrate output as part of the new review work.
Horizon says it has also already received several expressions of interest from third parties to either acquire or farm in to Nimbus and will look at all available options for the silver-zinc project that offer value for shareholders, while it continues to advance the Boorara gold project.
The company expects to provide an update on progress regarding Nimbus in the December quarter.
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