Horizon pumps up cash flow and bank balance in September quarter

Horizon Minerals has pumped-up both its cash flow and bank balance from the company’s September quarter activities, finishing the period with an enviable $34.3 million in its coffers on September 30.

Horizon generated gold sales of $41.895 million during the September quarter, with the bulk of the revenue coming from its Boorara operations.

Gold sales from mining at Boorara delivered revenues of $35.8 million, with a further $6.1 million coming in the door via its Phillips Find JV with BML Ventures. A total of $12.2 million was received by the JV, split 50/50 between the two firms.

In addition to the sales of $41.895 million, the company received $3.636 million for its share of expected gold sales from BML by way of an advance under the terms of the JV.

Total revenue received of more than $45.5 million for the quarter generated an improvement in operational cash flow for the period of $6.039 million after production costs of $37.246 million and other associated staff, admin and corporate costs.

It resulted in an improvement over last quarter’s net cash result of just $327,000 outflows, after receiving the advance for expected gold sales.

Horizon is happy to pump dollars back into the ground too, spending more than $3.8 million during the quarter on exploration and evaluation, as the company continues to explore and drill for its next golden discovery.

Taking those exploration dollars into account, a $517,000 stamp duty payment relating to the acquisition of Greenstone Resources and $126,000 for plant and equipment, Horizon still delivered a positive outcome for the period with more than $1.5 million in positive cash flow, compared to last quarter’s negative cash flow.

Improvements at the Boorara operation include an uplift in the mined gold grade, lifting to an estimated 1.027 grams per tonne (g/t) from the previous 0.952g/t. Gold sales increased from 6446 ounces to 6549 ounces for the quarter, with the average realised price per ounce leaping from $5048 to $5472 due to the surging gold price, which seemingly makes a new all-time high every week.

The only reduction of note was the drop in ounces of gold mined at the site, coming in at 8874 ounces compared to the June quarter figure of 9125 ounces. A huge rally in the gold price more than covered the fall, resulting in an additional $3.3 million in quarterly revenue, boosting the number to $35.8 million, up from $32.5 million.

Phillips Find also delivered during the quarter, coughing up 2147 ounces of the precious metal at a respectable 1.67g/t, realising an average price of $5694 per ounce.

Horizon’s $6.1 million share of the Phillips Find pie, plus the tidy $3.636 advance on its share of expected gold sales, added near $10 million to Boorara’s solid numbers.

The company raised more than $17 million net during the quarter from its $18.2 million second-tranche conditional placement, from a $30 million total placement revealed to the market in May.

In the next few months, it plans to complete extensional and infill drilling at its Burbanks project, along with finalising its pre-feasibility-study (PFS) for the project.

The PFS will include mining and infrastructure studies, including costs for the refurbishment and repurposing of the Black Swan processing facility into a gold plant, with intentions to pump out the precious yellow metal in solid numbers and really ramp-up the gold frenzy currently taking place.

Phillips Find sits 45km west of Coolgardie and Boorara is 15km east of the Kalgoorlie-Boulder township, adjacent to Northern Star’s massive Super Pit gold mine, which has produced more than 60 million-ounces of gold.

The company’s two producing mines have added plenty of cash and with the Burbanks project expected to join the menu list soon, Horizon may well be entering into a transformational period.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au