Horizon Minerals Ltd (ASX:HRZ) will acquire the remaining 50% of the high-grade Penny’s Find gold project from Labyrinth Resources Ltd for A$500,000 in cash at settlement and A$250,000 in fully paid ordinary shares in Horizon.
Horizon entered into a 50:50 joint venture with Labyrinth in July 2022 and completed a reverse circulation (RC) and diamond drilling program and compiled an updated mineral resource estimate.
Since then, Labyrinth has made several acquisitions in Canada and has agreed to divest its remaining 50% interest in the JV.
Horizon will acquire the remaining 50% for A$500,000 in cash at settlement and A$250,000 in fully paid ordinary shares in Horizon at settlement at a deemed price based on the 10-day VWAP and escrowed for six months.
Further terms
Horizon will assume future deferred payment obligations including:
➢ Mining start payment of $200,000;
➢ First gold payment $200,000; and
➢ Contingent non-commencement of mining payment of $100,000.
A net smelter royalty of 5% is payable on the first 50,000 ounces produced from M27/156 and thereafter a 2.5% net smelter royalty.
The agreement is subject to standard conditions precedent for a transaction of this nature including ministerial consent, any third-party assignments and provision of mining information with settlement expected in the March quarter of 2022.
Commenting on the divestments, Labrynth CEO Matt Nixon said: “The sale of Labyrinth’s 50% interest in Penny’s Find to joint venture partner Horizon delivers a positive outcome for both parties and, most importantly, for shareholders."
What’s next
Horizon will continue the work it is doing at Penny’s Find, 50 kilometres northeast of Kalgoorlie in the Western Australian goldfields.
The company will:
➢ continue to evaluate the underground deposit of Penny’s Find;
➢ complete further infill and extensional drilling; and
➢ assess development options including near term development and toll milling and/or inclusion of the project in the consolidated Feasibility Study.