Horizon Minerals Ltd (ASX:HRZ) is divesting the non-core Gunga West Gold Project near Coolgardie in the Western Australian Goldfields after reaching agreement with FMR Investments Pty Ltd.
Significantly for Horizon, as well as a cash component of $400,000 the transaction includes access to FMR’s greenfields toll mill in Coolgardie on commercial terms for ore treatment of 200,000 tonnes beginning in 2023.
The divestment comprises seven mining leases, one prospecting licence and one miscellaneous licence making up the Gunga West project.
“In line with strategy”
Managing director Jon Price said: “The sale of Gunga West is in line with our strategy of divesting non-core assets and listed investments and we will continue to do so where it adds value for shareholders.”
FMR will pay $400,000 in cash on the following terms:
- deposit of $100,000 in cash;
- $300,000 in cash on completion; and
- access to FMR’s Greenfields toll mill in Coolgardie on commercial terms for ore treatment of 200,000 tonnes commencing in 2023.
Contract mining-toll milling model
“Proceeds from these sales will be used for development capital to advance the proposed sequence of underground mines using a contract mining-toll milling model delivering a greater return on investment,” Price said.
"Securing toll milling at the Greenfields Mill in Coolgardie is also a great result providing a processing solution for our Rose Hill project.”
Horizon acquired Gunga West as part of a larger asset swap of projects with Northern Star Resources Limited in an agreement signed in September 2019 that included the core Rose Hill, Brilliant North and Golden Ridge tenure.
Completion of the FMR agreement is expected in the next four weeks, subject to standard conditions precedent for a transaction of this nature including due diligence, Ministerial consent, any third-party assignments and provision of mining information.