Horizon Minerals Limited (ASX:HRZ) has executed a binding agreement for the acquisition of a 50% interest in the high-grade Penny's Find gold project in the Western Australian goldfields for $1.5 million cash from Orminex Ltd.
- The asset is located 50km northeast of Kalgoorlie on a granted Mining Lease, aligning with Horizon's regional consolidation strategy and aim to build a stand-alone production business
- Penny's Find is a high-grade, underground mining and toll treatment opportunity with near term cash flow potential and longer-term exploration upside which will be included in the consolidated Feasibility Study as a fifth higher-grade satellite operation
- The project has a current JORC 2012 Mineral Resource Estimate of 248,000t at 7.04g/t Au for 56,000 ounces with 147,000t at 8.06g/t Au in the Indicated Category
- Mine development work well advanced and statutory approvals in place for underground mining in the first half of 2021
- Horizon will sole fund the first $1 million in pre-development expenditure with the joint venture partners funding the project on a 50:50 basis thereafter
- Toll treatment agreement in place at the Lakewood Mill commencing in July 2021
- Defined pathway for Horizon to acquire 100% of Penny's Find through the exclusive right to acquire the remaining 50% on completion of the toll milling contract
- Acquisition and development work funded from existing cash reserves of over $15m
- Agreement subject to standard conditions precedent for a transaction of this nature including Ministerial consent, any third party assignments and provision of mining information with Settlement expected in the current quarter
Commenting on the Penny's Find acquisition, Horizon Managing Director Mr Jon Price said:
"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."
"We look forward to working with the highly experienced Orminex team completing the technical work required to advance the project into development next year initially via toll milling in 2021-2022 for early cash flow generation. Beyond this, the project has the potential to provide further high grade satellite ore at the proposed standalone plant at Boorara."
About the Penny's Find gold project
Penny's Find is located approximately 50km north-east of Kalgoorlie in the Eastern Goldfields of Western Australia (Figure 1) in close proximity from the Company's 100% owned Kalpini gold project and comprises granted mining lease M27/516 and associated miscellaneous and general purpose leases covering approximately 91 hectares.
Open pit mining at Penny's Find was completed in 2018 with 18,350 ounces recovered from the treatment of 140,000t grading 4.5g/t Au with an overall gold recovery of 92.4%. Empire Resources Ltd ("Empire") then commenced work on updating the underground mining resource and assessing mine optimisation and design.
Orminex Limited acquired 100% of the project in May 2019 from Empire and completed further underground mine evaluation and design work, gained statutory approvals for mine development and independent assessment of further drilling required to improve geological confidence and convert current Inferred resources into the Measured and Indicated Category for inclusion in the reserve generation studies.
Mineral Resource and supporting information
Penny's Find has 56,000 ounces of gold at high grades contained within the previously announced underground mineral resource reported by Empire (refer ASX announcement entitled "Penny's Find Gold Mine New Underground Resource Estimate" dated 13 December 2017) ('Empire Announcement'). Horizon and Orminex are not aware of any new information or data that materially affects the information in the Empire Announcement and considers that all material assumptions and technical parameters underpinning the mineral resource disclosed in the Empire Announcement continue to apply and have not materially changed.
The underground 2012 JORC compliant Mineral Resource Estimate totals 248,000t grading 7.04g/t Au for 56,000oz 1 (refer Table 1 below*) and extends from the base of the completed open pit (approximately 85m depth) to at least 250m below surface and remains open at depth (Figure 2*).
This underground resource only reports fresh mineralisation and is defined by a 1.5g/t Au lower cut-off wireframe model. It also reflects only those parts of the mine's total resource which have the potential to be economically viable for extraction by underground mining methods.
The high-grade gold mineralisation at Penny's Find is hosted by quartz veins at the contact between sediments and basalt. Metallurgical test work has shown fresh mineralisation to be free milling with a high gravity recoverable gold component and a total gold recovery which has historically exceeded 92%.
The resource estimation was calculated by DataGeo Geological Consultants ('DataGeo') and incorporated results from all appropriate drilling with the most recent being diamond drilling reported to the ASX by Empire on 6 November 2017.
*To view tables and figures, please visit:
Jon Price Managing Director T: +61 8 9386 9534 E: firstname.lastname@example.org Michael Vaughan Media Relations - Fivemark Partners T: +61 422 602 720 E: email@example.com
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