Horizon Minerals Faces Execution Risks as Phillips Find Moves to Production

Phillips Find Moves into Production Phase

Horizon Minerals Limited (ASX: HRZ) has reached a significant operational milestone with the commencement of ore processing from its Phillips Find Gold Project, located in the prolific Western Australian goldfields near Coolgardie. This development signals the transition from exploration and development into active gold production, a critical step for the company’s growth trajectory.

The project is operated under a joint venture agreement with mining specialists BML Ventures Pty Limited, who have taken on full responsibility for management, technical, operational, and maintenance roles. Importantly, BML is funding all project costs, which significantly reduces Horizon’s financial exposure during this phase. The JV structure stipulates that net cash flow, after asset recovery and repayment of costs, will be split evenly between Horizon and BML, aligning incentives and sharing rewards.

Mining Progress and Ore Processing

Mining activities are well advanced, with over 800,000 bank cubic metres (BCM) extracted from the two open pits, Newminster and Newhaven. The first ore parcel, approximately 40,000 tonnes, is currently being hauled to the Greenfields mill under an existing toll milling agreement executed in May 2024. Processing is scheduled to begin imminently and will continue for about two weeks, marking the first step towards gold production and revenue generation.

Managing Director and CEO Grant Haywood expressed optimism about the progress, highlighting the company’s commitment to executing its strategy on schedule. He noted that the team is now fully staffed and making solid headway, with first gold pours and revenue expected shortly. This milestone is particularly timely given the favourable gold price environment, which enhances the potential value creation for shareholders.

Strategic and Financial Implications

The low-risk joint venture model with BML Ventures allows Horizon to advance Phillips Find without the immediate capital burden typically associated with mine development. This approach mitigates financial risk while enabling Horizon to benefit from the upside of production. The 50/50 profit-sharing arrangement after cost recovery ensures that Horizon will receive a fair share of returns once the project moves into steady-state operations.

Looking ahead, the focus will be on the successful completion of the initial processing campaign and the ramp-up to sustained gold production. The company’s ability to maintain operational momentum and manage costs will be critical in translating this milestone into meaningful cash flow and earnings growth.

Regional Context and Infrastructure

Phillips Find is strategically located within a well-established gold mining region, supported by existing infrastructure such as the Greenfields mill and accessible road networks. This regional advantage reduces logistical complexity and capital expenditure, further supporting the project’s economics. The proximity to other significant gold deposits in the area underscores the potential for resource expansion and longer-term value creation.

Overall, Horizon Minerals’ update on Phillips Find represents a pivotal moment in its development journey, moving the company closer to becoming a significant gold producer in Western Australia.