Horizon Minerals Ltd (ASX:HRZ) has started a strategic review of its Nimbus Silver-Zinc Project in Western Australia to assess value creation options including divestment, joint ventures or standalone development.
The company has received several third-party expressions of interest and these are being reviewed to determine the optimal outcome for shareholders as Horizon maintains its primary focus on advance the gold business.
This review of Nimbus has been prompted by strong prices and encouraging market fundamentals for silver as well as for zinc.
Nimbus is a previous producing project and has a current mineral resource estimate of 12.1 million tonnes grading 52 g/t silver for 20.2 million ounces and 0.9% zinc for 104,000 tonnes.
Within this is a high-grade lode immediately below the historic Discovery Pit with a resource of 260,000 tonnes grading 774 g/t silver for 6.4 million ounces and 12.8% zinc for 33,000 tonnes of zinc.
“Assessing all options”
Horizon managing director Jon Price said: “With silver and zinc prices showing sustained increases in recent times, the company is now assessing all options to create value from this historically successful mining operation at Nimbus.
“We see significant opportunity to develop the high grades lodes at Nimbus either on a standalone basis or in joint venture with an expert group.
“There remains potential for the project to grow in scale and quality with further exploration beyond the current mineralised envelopes.
“Any strategic options we elect to pursue for Nimbus will take into account this growth and future development potential.”
The project lies 15 kilometres east of Kalgoorlie-Boulder in WA’s Goldfields, adjacent to Horizon’s Boorara Gold Project, and covers about 170 square kilometres.
Horizon’s project area location, resources and surrounding infrastructure.
After producing 3.6 million ounces of silver from processing 320,000 tonnes ore at a grade of 352 g/t silver, the project was placed on care and maintenance in 2007 and the plant has since been decommissioned, removed and the site rehabilitated.
Extensive geological, metallurgical and engineering feasibility work has been completed on the project but due to depressed silver prices in 2017, everything was put on hold.
With a recovery in prices, the company’s strategic review will include a detailed assessment of all previous feasibility study work completed to 2017.
A desktop study has been initiated to evaluate options for the next step in advancing the project and as part of this work, high-grade lodes will be evaluated for potential early-stage development and concentrate generation.
A number of processing flowsheets have also been evaluated to enable concentrate and final product recovery from the complex mineralogy of the ore bodies.
Considerable interest has been shown in the project from third parties with technical skillsets in developing this style of mineralisation.
Nimbus intends to release the results of the review, including the future course of action for re-developing the project, during the December quarter of 2020.