Horizon Minerals has raised $6 million in a combined debt and equity funding package for its Boorara gold project in Kalgoorlie, Western Australia.
The package includes a $4 million loan facility from a German investor and a $2 million equity placement.
The working capital, combined with the company’s cash reserve of $2.2 million, will allow Horizon to accelerate development of its Boorora gold project east of Kargoolie in Western Australia in a bid to start gold production in 2020.
The first stage of Boorora development will involve the mining of three starter pits over six months and the toll treating of around 160,000 tonnes of ore that will produce 8,700 ounces of gold.
At a current Australian dollar gold price of $2,400 per ounce, Horizon expects to generate approximately $5.4 million from the first stage of Boorara gold project after all costs including debt and interest repayment.
Horizon managing director Jon Price said his company hoped to leverage the high Australian gold prices in 2020.
“A balance of debt and equity in these extremely volatile market conditions minimises dilution to our shareholders while enabling the Company to bring Boorara into production rapidly to capitalise on the high Australian dollar gold price, accelerate a resource growth and exploration drilling program and complete the feasibility study in 2020,” he said.
Boorara’s deposits have a total resource of 16.45 million tonnes grading 0.96 grams per tonne for 507,000 ounces of gold.
Horizon has a number of assets near Boorara deposit and through its merger with MacPhersons Resources, holds a resource base of 1.15 million ounces of gold covering a total area of 1,100 square kilometres.
Horizon also raised $2 million by placing 25 million ordinary shares at $0.08 per share, representing an 8 per cent premium to the company’s last closing price of $0.074 a share on March 10.