Horizon Minerals Ltd (ASX:HRZ) expects to start producing gold from the Phillips Find Project in Western Australia this year after executing a Joint Venture Agreement with BML Ventures Pty Limited.
The agreement between Horizon’s subsidiary Greenstone Resources Limited and BML will see two open pits developed and mined at the 100%-owned project 45 kilometres northwest of Coolgardie, in the heart of the Goldfields.
Toll Milling Agreement
An existing 200,000 tonnes Toll Milling Agreement with FMR Investments Pty Ltd will be utilised for the Phillips Find JV ore. All management, technical, operational and maintenance roles will be carried out by BML with oversight by Horizon.
A Mining Proposal (MP) has been submitted to the WA DMIRS and is under assessment with mobilisation and site establishment imminent along with pre-production work. Grade control drilling will also begin in preparation for operations.
Mining is expected to begin this quarter subject to the MP permit being approved while first gold production is planned for the December 2024 quarter, subject to permitting.
“Proven track record”
Managing director and CEO Grant Haywood said: “We are pleased to have partnered up with BML Ventures, who have a proven track record of delivering projects in the Eastern Goldfields of Western Australia.
"BML will be managing and sole funding the Phillips Find JV which greatly derisks the project for the company, particularly from a financial perspective.
“This agreement does not require any capital from Horizon and allows us to keep our focus on our Boorara startup. “The Cannon Project will be paused until sufficient cash flows are generated from our two production sites, Boorara and Phillips Find, to sole fund rather than joint venture.
"We look forward to generating cash over the next 19 months from two gold mining projects in this very strong gold price environment.”
Low risk for Horizon
This agreement provides a low financial risk JV structure for Horizon with BML to fund all project costs, with net cashflow after the asset recovery and repayment of costs to be split 50/50 between Horizon and BML.
The current Australian gold price also provides a favourable environment to deliver strong margins and cashflow generation from Phillips Find.
Processing at FMR’s Greenfields mill is expected to be undertaken for eight months under the Toll Milling Agreement.
Mining at Phillips Find is independent of mining at the company’s Boorara Project being treated at Norton Gold Fields’ Paddington mill, with production and cash flow to come from two production sources.
Horizon’s project locations, regional geology and surrounding infrastructure.
About Phillips Find
The project covers more than 10 kilometres of strike over prospective greenstone stratigraphy and includes the Phillips Find Mining Centre (PFMC) where around 33,000 ounces of gold has been produced between 1998 and December 2015 from three open pit operations - Bacchus Gift, Newhaven and Newminster.
The JORC 2012 mineral resource estimate for Phillips Find open pit is shown 730,000 tonnes at 2.3 g/t for 54,360 ounces with 41,650 ounces in the indicated category.
Of the three existing open pits, it is proposed to cut back the Newminster and Newhaven open pits over about 11 months.
The fleet will be 120-tonne excavators and 100-tonne rigid dump trucks with site facilities to be established by BML during the mobilisation phase.