Horizon Minerals has acquired the remaining 50 per cent of ASX-listed Labyrinth Resources’ high-grade Penny’s Find gold project in WA’s Eastern Goldfields for a package of $500,000 in cash and $250,000 in shares. Horizon now owns 100 per cent of the high-grade gold project and associated tenements via its wholly owned subsidiary Black Mountain Gold.
Additional terms of the deal include Horizon assuming obligations for future deferred payments of up to $400,000 relating to potential mining outcomes.
Should Horizon bring the project into operation it will need to outlay a net smelter royalty of 5 per cent payable on the first 50,000 ounces produced from the mining lease and a 2.5 per cent net smelter royalty thereafter.
Open pit mining by ASX-listed Empire Resources in 2018 produced 18,300 ounces at a grade of 4.47 g grams per tonne gold from the project.
The intention to scoop up the remaining 50 per cent was announced on December 20 last year, however execution of the deal was delayed due to legacy access and compensation agreements that needed updating.
Horizon earnt its initial 50 per cent stake in the project back in March 2021 when it officially entered a joint venture agreement with Labyrinth Resources under its previous banner Orminex.
Initial terms of the entry included a $1.5m cash payment to Orminex and Horizon to sole fund the first $1m in pre-development expenditure with the JV partners to fund the project equally thereafter.
The deal also included an option for Horizon to earn the remaining 50 per cent.
At the time Penny’s Find held a total resource estimate of 248,000 tonnes grading 7.04 grams per tonne gold containing a total of 56,000 ounces.
The acquisition of Penny’s Find aligns with Horizon’s regional consolidation strategy that aims to build a stand-alone production business with the additional ounces augmenting the company’s total gold base of 1.15 million ounces.
The explorer is targeting an updated resource for Penny’s Find during the September quarter and a development decision for the mine within the final quarter of the year.
The acquisition is another of Horizon’s successful consolidations surrounding Northern Star Resources’ Golden Mile gold mine of over 28 million ounces.
Horizon was born from the merger of Interim and Macphersons in 2019 resulting in the formation of one entity with the 448,000-ounce Boorara deposit as its cornerstone and a solid selection of surrounding projects.
Since then, the company has continued to consolidate, build and develop its assets within the area.
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By Matt Birney
