Horizon Minerals Ltd (ASX:HRZ) has poured first gold in its third toll milling campaign from trial mining at Boorara Gold Mine, which is 10 kilometres east of Kalgoorlie-Boulder in the Goldfields of Western Australia.
The company has launched a back-to-back campaign comprising the processing of around 45,000 tonnes from the Crown Jewel and Regal West trial pits with expected grades of 1.6-2 g/t gold.
With mining completed six weeks ahead of schedule, the company estimates production from the campaign to be 2,100- 2,600 ounces at 92% gold recovery.
This is expected to generate $5.3-$6.6 million in revenue at the current gold price of $2,550 per ounce.
“Strong net cash flow expected”
Horizon managing director Jon Price said: “With all mining and site production costs fully expensed last quarter, we look forward to the strong net cash flow expected from the final two milling campaigns and growing what is already a very healthy financial position for the company going forward.
“In the last six months, we have been mining, milling, drilling, consolidating and evaluating to support the larger-scale development and production profile.
“Boorara will provide the baseload feed and mill site and the satellite projects including Crake, Teal, Rose Hill and now Kalpini are being assessed to complement Boorara in the initial five-year production profile.”
Horizon’s Lydia Weeber and Jon Price with first gold poured from Crown Jewel.
Aim of trial mining and toll milling
The ultimate aim of the trial mining and toll milling from Boorara is to verify the tonnage and grade uplift potential when compared to the global resource model.
Results have demonstrated this potential and will inform an updated mineral resource estimate and maiden ore reserve as part of the consolidated feasibility study ahead of a development decision inclusive of construction of a standalone processing facility at Boorara.
With all mining and site production costs fully expensed, the remaining production costs comprise only haulage and toll milling expenditure.
A full production and cost reconciliation will be completed after the final milling campaign is completed in January 2021.
Currently, the company has cash at bank of $15 million and listed investments totalling $5 million
Resource estimate update
The completion of toll milling and subsequent mine to mill reconciliations will enable an updated mineral resource estimate to be compiled for Boorara in the March quarter of 2021.
This updated estimate will enable an updated mine optimisation and design to be completed for the compilation of a maiden ore reserve for Boorara in the June quarter of 2021 as part of a consolidated feasibility study and initial mine development plan.