Horizon Gold Ltd (ASX:HRN, OTC:HZGLF) has confirmed a financially robust development pathway for its 100%-owned Gum Creek Gold Project in Western Australia, with a definitive feasibility study targeting first production in the second half of 2028.
The open-pit study outlines average production of 98,000 ounces of gold per annum during the first five years and total recovered production of 880,000 ounces across an initial 10-year mine life.
Based on a gold price of A$5,500 per ounce, Gum Creek is forecast to generate A$1.85 billion in pre-tax free cash flow, a pre-tax net present value of A$1.31 billion and an internal rate of return of 53.1%.
Pre-production capital is estimated at A$350 million, including mine development, a new processing plant, supporting infrastructure and contingency. The project has an estimated all-in sustaining cost of A$2,995 per ounce and a 23-month payback period from first production.
Board advances project toward investment decision
Horizon’s board has endorsed the DFS and approved Gum Creek’s progression into the execution phase, targeting a final investment decision in the second quarter of 2027.
Planned work includes completing the approvals pathway, progressing detailed engineering, engaging engineering, procurement and construction contractors, appointing key members of the owner’s team and advancing major equipment and supply tenders.
Plant construction is expected to begin in the fourth quarter of 2027, subject to financing and environmental approvals, followed by an estimated 12-month construction period.
"The completion of this Definitive Feasibility Study is a defining milestone for Horizon Gold, confirming Gum Creek as a robust, simple and technically de-risked development project ready to advance quickly toward a Final Investment Decision," managing director and chief executive Scott Williamson said.
"Gum Creek is one of the most advanced undeveloped gold projects in Western Australia, and this study underpins a clear pathway to production in 2028. We're proud of the work our team has put into this DFS, and we look forward to progressing towards FID in Q2 2027 as we advance Gum Creek towards production and continue our exciting exploration across the belt."
Open-pit plan underpinned by maiden reserve
The DFS is based on conventional open-pit mining of free-milling ore from seven priority deposits and processing through a new 2.4-million-tonne-per-annum gravity and carbon-in-leach plant.
The production target comprises 25.1 million tonnes at 1.19 g/t gold for 962,000 contained ounces, of which around 880,000 ounces are expected to be recovered.
It is predominantly supported by a maiden probable ore reserve of 18.2 million tonnes at 1.24 g/t gold for 728,000 ounces.
The processing plant is designed for average gold recoveries of 91.5% and includes the capacity to expand to 3 million tonnes per annum as additional ore sources are developed.
Underground and sulphide upside
The current DFS excludes several opportunities that could increase production or extend the project’s operating life.
These include 9.3 million tonnes of sulphide mineralisation grading 2.3 g/t gold for 698,000 ounces, including the Wilsons underground deposit, which hosts 400,000 ounces at 4.31 g/t gold.
Horizon is also assessing higher-grade, free-milling underground resources at Swan, Swift and Kingfisher, where existing underground infrastructure could reduce the capital required to restart mining.
The company is investigating toll treatment, joint venture and partnership opportunities that may provide lower-capital pathways to early production ahead of the full-scale project.
Next steps
Horizon will now progress Gum Creek through the execution phase, with a final investment decision targeted for the second quarter of 2027.
Near-term priorities include completing remaining environmental and heritage surveys, securing regulatory approvals, advancing detailed engineering and engaging an EPC contractor for the proposed processing plant.
The company also plans to expand the existing accommodation camp, begin site and road upgrades, appoint key project personnel and advance procurement of long-lead equipment, including the ball mill, power generators and switchgear.
Horizon is working with financial adviser Orimco to assess project funding options, with formal engagement with Australian and international financial institutions expected to begin following the DFS release.
Subject to financing and approvals, major construction is scheduled to start in the fourth quarter of 2027, paving the way for first gold in the second half of 2028
About Horizon Gold
Horizon Gold is focused on developing the Gum Creek Gold Project, around 115 kilometres southeast of Meekatharra in Western Australia.
The project covers about 720 square kilometres of the Gum Creek greenstone belt and hosts a mineral resource of 37.97 million tonnes at 1.89 g/t gold for 2.30 million ounces.
Gum Creek has previously produced more than 1 million ounces of gold and retains existing roads, an airstrip, accommodation and other infrastructure from earlier mining operations.