Horizon subsidiary Black Mountain will pay $1.5 million in cash to advance Penny’s Find and will hold a 50 per cent interest in the project.

Horizon has also inked a toll milling treatment agreement at Orminex’s Lakewood mill, which will commence in July next year.

The company stated that this was a “defined pathway” to acquire the remaining 50 per cent of Penny’s Find after the toll milling contract is completed.

The remaining 50 per cent of the project can be acquired in 2022 after Horizon completes 230,000 tonnes of contracted toll milling.

Horizon’s focus remains on developing a gold production business in the Kalgoorlie and Coolgardie regions, Horizon managing director Jon Price said.

“Horizon’s core focus remains firmly set on developing a stand-alone gold production business in the Kalgoorlie and Coolgardie region and this acquisition aligns with this focus and our strategy of further regional consolidation of advanced development assets in close proximity to our core assets,” he said.

“Penny’s Find has had considerable work completed in the past, including resource modelling, open pit mining, processing and environmental studies which enables rapid advancement of the underground deposit.

“We also see considerable growth potential below the current high-grade resource which remains open at depth.”

Penny’s Find has a JORC 2012 minerals resource estimate of 248,000 tonnes at 7.04 grams per tonne of gold for 56,000 ounces.

“We look forward to working with the highly experienced Orminex team completing the technical work required to advance the project into development next year initially via toll milling in 2021-2022 for early cash flow generation,” Price said.

“Beyond this, the project has the potential to provide further high grade satellite ore at the proposed standalone plant at Boorara.”

Orminex acquired the Penny’s Find project in May last year.