Horizon Minerals Limited (ASX:HRZ) has completed a stage-I feasibility study at the Boorara Gold Project near Kalgoorlie-Boulder in WA’s Eastern Goldfields, with results supporting the development of three starter pits.
These three pits include one within the Crown Jewel deposit as well as an east and west pit within the Regal deposits.
The study outlines a staged development with mining, which will precede processing by two months to build ore stockpiles, to take an estimated six months with the overall project to take an anticipated eight months.
Financially viable project
Findings of the study indicate a financially viable project highlighted by:
- Open pit mine design producing 159,000 tonnes at a fully diluted grade of 1.86 g/t for 9,500 ounces over a six month mine life;
- Toll milling at 91% metallurgical recovery produces 8,700 ounces recovered;
- Low up-front capital costs of $440,000;
- C1 Cost of A$1,570/ounce and All In Sustaining Cost of A$1,680/ounce; and
- Project generates A$5.8 million in free cash flow at a current gold price of A$2,350/ounce.
Development decision upcoming
A development decision is expected to be made during the current quarter and if this is positive, mining would begin in the June quarter ahead of toll milling in the September quarter.
The outlined capital expenditure of $440,000 includes contractor mobilisation, demobilisation and site establishment as well as water storage dam construction, associated pumps and pipework, and an upgrade to part of the existing road network suitable for road train use.
“Robust economic results”
Managing director Jon Price said: “The Boorara Stage I Feasibility Study has delivered robust economic results with strong projected cash margins and significantly reduced geological risk with grade control drilling completed ahead of a decision to mine.
“As with the successful Teal gold mine, the company has taken a conservative approach to both resource estimation and mine development parameters, adopting conservative cut off grades, dilution and ore recovery to reduce risk and underpin strong future cash generation.
“The key drivers for developing Stage I of Boorara are to leverage off the current high gold prices to generate cash and to de-risk the larger-scale development by confirming the tonnage and grade uplift demonstrated by the infill drilling and previous mining and milling reconciliations.”
Study parameters and outcomes
The study is based on the following key parameters:
- Gold price of A$2,000 per ounce;
- Open-pit mining operations and road haulage conducted by contractors;
- Ore processing through Golden Mile Milling’s 1 million tonnes per annum conventional carbon in leach Lakewood plant within close proximity; and
- Project implementation and oversight by Horizon’s own team in conjunction with contractors.
The key outcomes for the project include:
Depending on a development decision, a mining contractor will conduct the mining activities with technical and managerial oversight provided by Horizon.
Mining will be open cut using conventional truck and shovel operations and will initially be free dig near the surface.
About 6 metres of waste overburden will be removed followed by ore mark up from the recently completed grade control model.
Ore mining will then begin on a reduced bench height and smaller bucket size to minimise dilution and maximise ore recovery with total volume moved estimated at 0.52M BCM.
Ore mined will be trucked to the Lakewood processing facility where ore will be processed on a campaign basis under the supervision and control of a Horizon representative.
The ore will be mined in the range between 15-35,000 tonnes per month over a six month period.
This would be stockpiled on site with processing commencing two months after the mining at approximately 25,000 tonnes per month
Next steps
The immediate next steps are the finalisation of the mining proposal addendum and project management plan for submission to the Department of Mines, Regulation and Safety (DMIRS).
Additionally, mining and haulage contracts will be finalised in conjunction with project financing options for board approval early in the June quarter 2020.
Once this has been completed, mine development is anticipated during the June quarter and subject to the mobilisation of the mining fleet with the successful mining contractor.