Horizon Gold Unveils A$1.3 Billion NPV Definitive Feasibility Study for Gum Creek Gold Project in Western Australia

Gum Creek’s Production Outlook and 10-Year Economic Forecast

The DFS details a 10-year mine life at Gum Creek with a Production Target of 25.1 million tonnes at an average grade of 1.19 grams per tonne gold, containing 962,000 ounces of mined gold and 880,000 ounces recovered. The study projects an average annual production of 88,000 ounces over the mine life, peaking at 114,000 ounces in the second year. During the initial five years, the project aims for an average of 98,000 ounces annually, providing strong early cash flow to support financing and capital recovery.

The processing plant is designed for an average throughput of 2.4 million tonnes per annum with an expected recovery rate of 91.5%, ensuring efficient gold extraction. The All-in Sustaining Cost (AISC) is estimated at A$2,995 per ounce over the mine life, positioning Gum Creek as a low-cost operation within the gold industry. This cost structure, combined with production forecasts, underpins the project's robust margin and financial returns.

Capital Investment and Pre-Tax Financial Performance at A$5,500/oz Gold

The DFS estimates pre-production capital costs at A$350 million, covering mine development, processing plant, infrastructure, contingencies, and commissioning. Assuming a gold price of A$5,500 per ounce, the project is projected to generate pre-tax free cash flow of A$1.854 billion over its life, highlighting strong returns on invested capital. The pre-tax NPV at a 5% discount rate is A$1.307 billion, with a pre-tax IRR of 53.1%, demonstrating solid economic fundamentals.

The payback period is estimated at 23 months from first production, indicating swift recovery of initial capital. This rapid payback supports project financing by showing the ability to service debt and return capital to equity holders promptly. Post-tax metrics include an NPV5 of A$894 million and an IRR of 41.7%, reflecting taxation impacts. These financial projections are based on the A$5,500 per ounce gold price assumption; actual results may vary with gold price fluctuations and operational factors.

Ore Reserve and Resource Base Supporting Production Targets

The Production Target is primarily supported by a maiden Ore Reserve Estimate of 18.2 million tonnes at 1.24 grams per tonne gold, containing 728,000 ounces, reported under the JORC Code 2012. Approximately 97% of production in the first five years derives from Probable Ore Reserves, significantly reducing geological risk early in the mine life.

Horizon Gold cautions that the 10-year Production Target includes 76% Probable Ore Reserve ounces, 18% Indicated Resource ounces, and 6% Inferred Resource ounces. While the company believes it has a reasonable basis for including Inferred Resources, these carry lower geological confidence and do not guarantee project viability or realization of the Production Target.

Underground and Sulphide Ore Exploration Potential Beyond DFS Scope

The DFS highlights extensive underground mining prospects and sulphide ore deposits outside the current study’s scope, representing material expansion potential. Incorporating these resources could increase gold production and extend mine life beyond the 10-year base case. Horizon Gold views integrating free-milling underground ore and sulphide deposits as key for future value creation and production growth.

This exploration upside is notable as the DFS focuses on conventional open pit mining of free-milling ore. The additional resource inventory offers pathways for staged development or accelerated production as operational experience grows and economics improve. This potential supports Horizon Gold’s view of Gum Creek as a robust, long-term development opportunity with scope for growth beyond the current feasibility study.

Approvals Process and Final Investment Decision Targeted for Q2 2027

The Horizon Gold Board has approved the DFS and plans to progress toward a Final Investment Decision in Q2 2027. The company is advancing a thorough approvals process to secure environmental and regulatory permits ahead of FID. Approvals activities are on schedule to meet this milestone, demonstrating commitment to de-risking prior to capital commitment.

Subject to approvals, plant construction is expected to start in Q4 2027, with a 12-month build period leading to first gold production in H2 2028. Concurrently, Horizon Gold is advancing detailed engineering, upgrading camp facilities for over 100 personnel, and engaging early with EPC contractors to mitigate construction risks and adhere to the delivery timeline.

Project Financing Strategy and Engagement with Financial Advisors

Horizon Gold is collaborating with financial advisors to secure suitable project financing for Gum Creek’s development. The DFS’s strong production profile and financial outcomes are anticipated to attract financing interest and support debt capacity. Project financing, typically secured against mine cash flows, will be considered alongside regulatory approvals and the FID.

The company has not disclosed specifics on financing structure, size, or partners. Investors should note there is no guarantee Horizon will raise the estimated A$350 million on favorable terms. Funding could involve equity, debt, hybrids, or other instruments and may dilute existing shareholders. Project success depends on securing financing and regulatory approvals under acceptable conditions.

Horizon Gold’s Strategic Position in Western Australia’s Gold Sector

Horizon Gold Limited is a gold exploration and development company focused on Western Australia, a globally recognized premier gold mining jurisdiction. The company wholly owns the Gum Creek Gold Project, one of the most advanced undeveloped gold assets in the region, situated within an established gold belt with strong infrastructure, skilled labor, and regulatory familiarity. This location offers access to essential resources for large-scale mine development and operation.

Significant exploration and development efforts have culminated in the DFS completion. Managing Director and CEO Scott Williamson stated, "The completion of this Definitive Feasibility Study is a defining milestone for Horizon Gold, confirming Gum Creek as a robust, simple and technically de-risked development project ready to advance quickly toward a Final Investment Decision." The company aims to progress Gum Creek toward production while pursuing exploration across the broader belt to build a pipeline of future projects, balancing near-term cash flow with long-term growth.

Open Pit Mining and Process Plant Design for 2.4 Million Tonnes per Annum

The DFS is based on conventional open pit mining of free-milling ore, delivering a straightforward mining and processing operation designed for 2.4 million tonnes per annum capacity. The mine has a strip ratio of 9.6:1 (waste to ore) over its life, typical for open pit gold mines. The approach emphasizes operational simplicity and technical de-risking using proven mining and processing technologies to minimize complexity and execution risk during development and ramp-up.

The process plant design includes infrastructure to achieve the targeted 91.5% gold recovery. The DFS was developed by a combined Horizon and MineScope Services team, providing detailed estimates of production, capital and operating costs, and schedules for engineering, procurement, construction, commissioning, and ramp-up. The choice of conventional open pit mining and processing reflects a de-risked strategy favoring proven methods preferred by financiers.

Financial Sensitivity to Gold Price and Market Variables

The DFS financial analysis is based on a gold price of A$5,500 per ounce, a critical assumption driving revenue. At this price, the project delivers strong financial metrics including a pre-tax NPV of A$1.307 billion and IRR of 53.1%. However, actual economics will be sensitive to gold price fluctuations; declines below A$5,500 per ounce would reduce NPV, IRR, and cash flow, while higher prices would enhance returns.

Other factors affecting financial outcomes include capital cost inflation, operating costs, plant recovery rates, and foreign exchange. The A$350 million capital estimate includes contingencies for cost overruns, but significant escalations beyond this could impact returns. Mining and processing operations inherently carry variability, and actual costs and production may differ from forecasts. Investors should carefully evaluate sensitivity to these variables.

Mining Industry Context and Gum Creek’s Competitive Position

The Gum Creek Gold Project fits within the global gold mining industry where new primary resource development requires significant capital and strategic focus. With an estimated A$350 million pre-production capital cost and average annual production of 88,000 ounces, Gum Creek is a mid-tier development project. Its AISC of A$2,995 per ounce aligns with efficient, larger-scale gold mines, supporting competitive cash generation compared to peers.

The project’s timing coincides with ongoing consolidation and development in the Australian and global gold sectors. Horizon Gold positions Gum Creek as "Western Australia's next major gold project development," reflecting its significance to regional gold mining capacity. Its location, robust economics, and advanced development status make it a notable asset among ASX-listed gold companies, attracting investor attention as it progresses toward FID and financing.