Horizon Gold has delivered a volley of broad, high-grade gold hits from drilling outside the recently completed DFS mine plan at its Gum Creek gold project in Western Australia’s Mid-West/ Murchison region. The headline result from the company’s Kingfisher prospect is a cracking 23-metre intersection grading an impressive 5.26 grams per tonne (g/t) gold from 188m downhole, which included a richer 15 metre core going 7.65g/t gold.

Horizon’s latest reverse circulation (RC) drilling campaign tested three prospects, Kingfisher, Hawk and Swan, with the drill bit kissing the dirt on infill and extensional targets with the aim of growing the project’s already significant resource base.

At Kingfisher, other notable results that may cause pulses to quicken include a very wide 45m hit at 1.24g/t gold from 114m, a 12-metre section grading 2.81g/t gold from 74m and a spectacular one metre zone that tipped the scales at a stand out 23.4g/t gold from just 52m.

The company says the drilling at Kingfisher was designed to plug a gap in historical drilling data and test for extensions to the north. The program has now confirmed the continuity of mineralisation and highlighted the potential for further resource expansions along strike.

Horizon also put two RC holes into the Hawk prospect about 5km south-southeast of its proposed Gidgee mill site, extending known mineralisation down-dip and down-plunge to the north. Significant intercepts include 12 metres at 2.3g/t gold from 140m, featuring a higher-grade slice of 6 metres at 4.26g/t gold. Another hole returned 5 metres at 3.46g/t gold from 159m.

Shallow extensional drilling at the Swan deposit just 700m east of the old Gidgee mill also came up trumps also with a 16-metre intercept grading 1.84g/t gold from a shallow 45m, including 7 metres at 3.03g/t gold.

Impressive high-grade RC drilling results from Kingfisher, Hawk and Swan highlight the potential for resource expansion close to the proposed 2.4Mtpa processing plant. Follow up drilling is being planned prior to updating the respective resource estimations. Importantly, these resource additions sit outside those included in the recently released Definitive Feasibility Study and will potentially enhance project economics.

The results are significant as they fall outside the scope of the company’s recently tabled open pit Definitive feasibility study which already outlines a robust case for development at Gum Creek. That study showed a pathway for what could be WA’s next major gold mine development based on a maiden ore reserve of 18.2 million tonnes at 1.24g/t gold for 728,000 ounces.

The company’s fresh DFS anticipates average gold production of 88,000 ounces per annum over an initial 10-year mine life, peaking at 114,000 ounces in the second year, potentially generating a whopping $1.854 billion in pre-tax free cashflow based on an Australian dollar gold price of $5500 per ounce. The overall Gum Creek project is underpinned by a serious global mineral resource of 37.97 million tonnes grading 1.89g/t for 2.3 million ounces of gold.

With an all-in sustaining cost of A$2,995 per ounce outlined in the study and a spot price pushing $5780 today, Horizon’s project looks set to deliver healthy margins of more than A$2500 for every ounce pulled from the ground at the study price, with construction capex set at $350 million.

Finding additional high-grade ounces right next door to the existing proposed mine plan adds further strength to the argument that this is a project that will likely be built. Any new ounces that can be added to the mine plan have the potential to either extend the mine life or sweeten the up-front economics by potentially boosting the grade profile in the early years.

With follow-up drilling already being planned for all three prospects, Horizon looks to be on a lucrative mission now to prove up just how big its Gum Creek project could be.

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