Horizon Minerals Ltd (ASX:HRZ) has laid out a plan for future gold production in the Kalgoorlie region of WA, including at the Cannon Underground Gold Project, detailing the steps that will be required to achieve the all-important milestones.
The roadmap focuses on four main areas – the development of the Cannon and Pennys Find underground mines, development of the Kalpini open pit and both short-term development and feasibility studies at the Boorara project.
Targeting record gold prices
“Horizon has a large resource endowment that we are working towards development and bringing cashflow into the business in this record gold price environment,” Horizon Minerals CEO Grant Haywood said.
“We have worked diligently on progressing negotiations and approvals for our projects to provide a sequence of development assets with the aim to be in sustainable gold production.
“This work will increase the optionality within our combined portfolio upon completion of our planned merger with Greenstone Resources.
“This will introduce several new, high-grade, near-term mining opportunities in the Coolgardie region.
“Developments will be sequenced to maximise near-term cash flow from low-capital projects to support the development of our long-life cornerstone assets.”
Underground development
There is still much to be done before gold production can begin.
For the Cannon underground development, the dewatering pipeline has just been completed for the fully permitted Cannon and Gold Ridge mines.
A pumping system was also installed in the Cannon pit and the dewatering process initiated. It’s expected to take about three months to dewater the pit.
The company has also received tenders from three underground contracting parties – pricing data will be received within the next month, allowing HRZ to update the project economics with the latest contract pricing and gold price improvements.
Horizon is targeting first ore production from Cannon in the December quarter of this year.
After Cannon
At Pennys Find, HRX is advancing a pre-feasibility study (PFS) inclusive of a maiden ore reserve for the deposit, expected to be complete in the June quarter.
For Kalpini, pit optimisations have had some success, demonstrating substantial cash flows via toll treatment at a gold price of A$2,800 per ounce, as the spot price reached new records overnight for the precious metal.
As for Boorara, the short-term work by AMC Consultants has resulted in further pit optimisations, again offering favourable toll treatment options at the current gold price.
The long-term outlook for Boorara will focus on heap leach and carbon in leach processing methods, with the aim of building a larger, long-term development.
Horizon is in early discussions with several potential joint venture partners and open pit contractors to potentially fast-track the open pit production from the newer areas, including Boorara, Kalpini and Monument, potentially providing an early source of revenue.
Next steps toward production
From here, Horizon Minerals will focus its attention on achieving the following:
- Finalise tenders and negotiate with the preferred underground mining contractor or potential partner for the Cannon underground development ready for Final Investment Decision (FID).
- Finalise the 200,000-tonne mill allocation with FMR Investments’ Greenfields mill with an executed Toll Milling Contract.
- Finalise the mine designs for the short-term open pit at Boorara and Kalpini to allow mining contractors to estimate pricing, complete studies and provide scope for potential FID later this year.
- Negotiate mining and haulage contracts for Boorara, Kalpini and Monument.
- Complete mineral resource estimates for Pinner and Monument and optimise for open pit potential.
- Seek outstanding mining approvals for Kalpini, Pinner and Monument. Pinner and Monument approvals advanced with flora & fauna and Native Title already completed and materials characterisation work underway.
- Seek additional mill allocation in the Kalgoorlie / Coolgardie region.
- Complete work on the proposed merger with Greenstone Resources to enhance the long-term production profile with development-ready high-grade projects
- Provide regular updates to keep the market fully informed of progress to gold production