Horizon Minerals (ASX: HRZ) has moved to undertake a strategic $35 million sale of the Lake Johnston project in Western Australia to Forrestania Resources (ASX: FRS).
Part of a pair of corporate moves the company completed this week, Horizon is divesting the non-core asset to help support the development of its Black Swan gold project in WA.
Horizon is looking to convert Black Swan’s historical nickel producing plant to process gold ores.
Significant Gold Holding
The company holds assets containing an estimated 30.55 million tonnes of gold at a grade of 1.84 grams per tonne for 1.8 million ounces of gold within its tenements across Kalgoorlie’s Goldfields region.
The majority of the new funds will support the purchase of long-lead items for the refurbishment of the Black Swan processing plant, which is currently the focus of a pre-feasibility study Horizon expects to complete this quarter.
Forestania will pay $30m in cash for Lake Johnston, along with $5m in shares, allowing Horizon to remain some upside exposure to the project.
Strengthened Balance Sheet
“The divestment allows Horizon to strengthen its balance sheet and bring in cash to continue to advance the Black Swan processing facility and surrounding gold projects,” chief executive officer Grant Haywood said.
The sale of Lake Johnston – which Horizon acquired earlier this year as part of its merger with Poseidon Nickel – comes just days after Horizon finalised its acquisition of the large Gordons Dam gold project, which is strategically located near the Black Swan processing facility.
Horizon is also currently undertaking a 30,000-metre drilling program at its Burbanks project, with the first 15,000m infill drilling aiming to improve resource confidence and the remaining 15,000m extensional drilling aiming to grow the resource.
The company also revealed it would accelerate additional drilling programs across its large land package, including Gordons Dam, in 2026.
