Horizon Minerals has announced a binding toll milling agreement (TMA) with FMR Investments for the treatment of 200,000 tonnes (t) of gold ore from its Cannon underground project in WA.
The processing is scheduled to commence in the December 2024 quarter at FMR's Greenfields Mill.
This TMA stipulates that Horizon will oversee contract mining and the transportation of ore from Cannon to the Greenfields Mill, which has a capacity of one million tonnes (mt) per annum and is situated 67km from the project.
The processing of the agreed 200,000t of ore will span eight months.
This agreement includes competitive treatment rates and requires Horizon to pay processing costs upfront before the value of the refined gold is transferred from FMR's metal account to Horizon at the Perth Mint.
Should Horizon fail to meet the delivery schedule, it risks losing the allocated tonnes for that month from the total of 200,000t.
Horizon has confirmed the existence of an ore reserve at Cannon, with projected economics already factored into the TMA.
This site is fully environmentally permitted, and pre-production activities including dewatering the open pit for underground mining are in progress.
The flexibility of the TMA allows Horizon to process ore from other deposits, including those from its current resources or potential acquisitions through the proposed merger with Greenstone Resources, given adequate notice to FMR.
The company noted that AMC Consultants has been engaged to review the Cannon Ore Reserve and is expected to update the key financial outcomes by the June 2024 quarter.
Horizon is also finalising tenders for underground mining and haulage contractors for the Cannon project.
Looking ahead, Horizon's focus will be on completing the merger with Greenstone Resources, aiming to bolster its long-term production profile with development-ready, high-grade projects.
Horizon CEO Grant Haywood said: “We are very pleased to have converted our 200,000 tonne allocation with FMR into a formal Toll Milling Agreement, and look forward to working closely with them as ore deliveries will commence later this calendar year.
“This agreement is in addition to our 1.4mt ore sale agreement with Paddington announced a week ago. Together this will see us generating cash flow from two fronts in this fantastic gold price environment before the end of 2024.”
