Gum Creek DFS Confirms Path to WA's Next Major Gold Mine
Released
Released
Announcement PDF
22 July 2026
Gum Creek Open Pit DFS Confirms Pathway
for WA’s Next Major Gold Mine Development
Horizon Gold Limited (ASX: HRN) (‘Horizon’ or ‘the Company’) is pleased to announce the
Definitive Feasibility Study (‘DFS’ or ‘Study’) of its 100% owned Gum Creek Gold Project
(‘Project’) in Western Australia.
The Open Pit DFS confirms Gum Creek's potential to become Western Australia’s next
major gold project development, underpinned by low operating costs, a high-margin
production profile and strong growth potential from extensive underground mining
opportunities and sulphide ore deposits which currently sit outside the DFS scope.
HIGHLIGHTS
Average annual gold production target of 98kozpa over the first five years and 880koz
produced over a 10 year mine life, with first gold scheduled for H2 2028
Pre-production capital cost of A$350m, including mine development, process plant
and associated infrastructure (incl. contingency and commissioning)
Pre-tax free cash flow of A$1,854m, NPV5 of A$1,307m and IRR of 53.1%, based on a gold
price of A$5,500/oz, delivering a payback of 23 months from first production
Strong margins, with an All-in Sustaining Cost (AISC) of A$2,995/oz
Approvals process on track for a Final Investment Decision (FID) in Q2 2027
Significant upside to grow production and extend mine life by bringing free-milling
underground ore and sulphide deposits into the mine plan
________________________________________________________________________________
The Study is based on free-milling open pit mining delivering a robust Production Target
containing 962koz of mined gold (880koz recovered), underpinned predominantly by a
maiden Ore Reserve Estimate of 18.2 Mt at 1.24 g/t Au for 728koz contained gold.
Cautionary Statement
The Production Target (and forecast financial information derived from the Production
Target) referred to in this announcement is underpinned by 76% Probable Ore Reserve
ounces, 18% Indicated Resource ounces and 6% Inferred Resources ounces. The first 5 years
2
of the Production Target is underpinned by approximately 97% Probable Ore Reserve
ounces, and approximately 3% Inferred Mineral Resource ounces. There is a low level of
geological confidence associated with Inferred Mineral Resources and there is no certainty
that further exploration work will result in the determination of Indicated Mineral
Resources or that the Production Target itself (or the forecast financial information) will be
realised.
The Company believes it has a reasonable basis to disclose a production target that
includes some Inferred Mineral Resources, as the Inferred Resources are not a determining
factor in the viability of the Project. Importantly, the feasibility of the development scenario
outlined in the DFS does not hinge on the current Inferred Mineral Resources. Also, the
Inferred Mineral Resources do not feature as a significant proportion early in the mine plan.
To achieve the range of outcomes anticipated in the DFS, an estimated A$350m of initial
capital will be required. The Company believes the assumptions made are reasonable to
enable it to obtain the requisite funding required to develop the Project. Reference should
also be made to other disclaimers included in this announcement. Investors should note
that there is no certainty that Horizon will be able to raise that amount of funding when
needed (nor any certainty as to the form such capital raising may take, such as equity,
debt, hybrid and/or other capital raising, nor whether the production target, financial
forecasts or other forward-looking information in this announcement may be achieved). It
is also possible that such funding may only be available on terms that may be dilutive to
or otherwise affect the value of Horizon’s existing shares.
Managing Director and CEO Scott Williamson said:
"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.
Gum Creek is one of the most advanced undeveloped gold projects in Western
Australia, and this study underpins a clear pathway to production in 2028. We're
proud of the work our team has put into this DFS, and we look forward to progressing
towards FID in Q2 2027 as we advance Gum Creek towards production and continue
our exciting exploration across the belt."
Overview
The DFS, which was undertaken by an integrated Horizon and MineScope Services project
delivery team, provides a comprehensive estimate of production, capital and operating
costs and a detailed schedule for the engineering, procurement, construction,
commissioning and ramp-up of a 2.4Mtpa gold mining and processing facility at the Gum
Creek Gold Project.
It has assessed the technical, financial and environmental viability of the Project, which
delivers a Production Target of 25.1Mt at 1.19 g/t Au for 962koz which is predominantly
underpinned by a maiden Ore Reserve of 18.2Mt at 1.24 g/t Au for 728koz of contained gold
reported in accordance with the 2012 edition of Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012).
It is anticipated the Project will deliver an average gold production of 88koz per annum
over an initial 10-year mine life, peaking at 114koz per annum in year two, and delivering a
total of 880koz gold recovered over the Life of Mine (LOM) with an AISC of A$2,995/oz.
3
The DFS confirms that mining and processing at Gum Creek is technically, economically,
and environmentally viable at an average rate of 2.4Mtpa with supporting infrastructure.
A summary of key Project results and financial metrics is shown in Table 1.
Table 1: Key Project Results and Financial Metrics
Next Steps
Based on the compelling DFS outcomes, the Horizon Board has endorsed the DFS and
intends to proceed with a number of Project activities including:
Upgrade the existing camp to its previous capacity (>100 persons)
Completion of the Project approvals pathway aimed at allowing FID in Q2 2027
Progress detailed engineering and design
Key Financial Indicator Unit
A$5,500/oz
(Base Case)
Life of Mine (LOM) Years 10.0
Ore Mined (LOM) Mt 25.1
Strip Ratio (LOM) x 9.6
Gold Produced (LOM) koz 880.1
Mill Throughput (Average) Mt / year 2.4
Average Feed Grade (LOM) g/t 1.19
Plant Recovery (LOM) % 91.5
Gold Produced (Average) koz / year 88.0
Gold Sales Revenue (LOM) A$m 4,841
EBITDA (LOM) A$m 2,268
Free Cash Flow - Pre-tax (LOM) A$m 1,854
NPV5 (Pre-tax) A$m 1,307
IRR (Pre-tax) % 53.1
Payback (Pre-tax) Months 23
NPV5 (Post-tax) A$m 894
IRR (Post-tax) % 41.7
Pre-production Capital A$m 350
All-in Sustaining Cost (LOM) A$/oz 2,995
4
Early contractor involvement (ECI) with Engineering, Procurement, and
Construction (EPC) contractors;
Accelerate owner’s team appointments;
Advance major supply tenders; and
Progress activities to support the Project execution schedule.
Working closely with its financial advisor, the Company will seek to arrange appropriate
project finance for the Project. The production target profile and attractive financial
outcomes of the DFS are expected to support project financing interest and capacity. The
Company will consider a Final Investment Decision (FID) in parallel with Project financing
and regulatory approvals.
Plant construction activities are expected to commence at Gum Creek in Q4 2027 subject
to receipt of required environmental approvals and the completion of Project
implementation activities, which will significantly de-risk construction. Based on an
estimated 12-month construction period, first gold at Gum Creek is expected in H2 2028.
Mineral Resources, Maiden Ore Reserve and Life of Mine Production Target
A summary of the Mineral Resources1
, Maiden Ore Reserve and Life of Mine Production
Target used as the basis for the DFS is outlined in Table 2.
Table 2. Mineral Resources, Maiden Ore Reserve and Production Target
1
Refer to Horizon Gold Ltd ASX announcement titled “Gum Creek Project Gold Resource Update” dated 4 November 2025
Classification
Cut-off
(g/t)1
Tonnes
(Mt)
Grade
(g/t)
Au Metal
(koz)
Mineral Resources
Indicated Various 26.7 1.90 1,629
Inferred Various 11.3 1.86 672
Total Various 38.0 1.89 2,301
Open Pit Ore Reserves
Probable Various 18.2 1.24 728
Total Various 18.2 1.24 728
Open Pit Production Target
Indicated Various 23.2 1.21 905
Inferred Various 1.9 0.94 57
Total Various 25.1 1.19 962
5
Explanatory Notes:
1. Mineral Resources reported are inclusive of Open Pit Ore Reserves
2. The Mineral Resources and Ore Reserve estimate underpinning the Production Target in this
announcement have been prepared by competent persons in accordance with the requirements of the
JORC Code (2012);
3. Tonnes are reported as million tonnes (Mt) and rounded to the nearest 100,000; grade reported in grams
per tonne (g/t) rounded to the nearest tenth; gold (Au) ounces are reported as thousands rounded to the
nearest 1,000;
4. The total LOM Production Target is underpinned by 18% Indicated Resource ounces, 6% Inferred Resource
ounces, and the remaining 76% is underpinned by Probable Ore Reserves;
5. Mineral Resources are reported at a 0.4 g/t Au to 0.8 g/t Au lower cut-off for Open Pit and 1.5 g/t Au for
Underground and are inclusive of Ore Reserves;
6. Ore Reserves are reported using a A$4,500 gold price basis for cut-off grade calculations; and
7. Refer to Definitive Feasibility Study – Executive Summary, Appendix 2 – JORC Table 1 Section 3 for individual
deposit cutoffs.
Ore Reserve Estimate
The maiden Open Pit Ore Reserve Estimate for the Gum Creek Gold Project as at 22 July
2026 is 18.2 Mt at 1.24 g/t Au for 728,400 oz of contained gold, all classified as Probable,
across the seven open pit “Priority” deposits set out below. The Ore Reserve was estimated
by Auralia Mining Consulting Pty Ltd and is reported in accordance with the JORC Code
(2012). The November 2025 Mineral Resource Estimate of 37.97 Mt at 1.89 g/t Au for 2.30
Moz2
is reported inclusive of the Ore Reserve.
A summary of the Maiden Open Pit Ore Reserve presented in Table 3.
Table 3. Maiden Open Pit Ore Reserve
Note: Figures have been rounded.
2 Refer to Horizon Gold Ltd ASX announcement titled “Gum Creek Project Gold Resource Update” dated 4 November 2025
Open Pit Deposit Classification
Ore
Tonnes
(Mt)
Grade
(g/t)
Au Metal
(koz)
Eagle Probable 0.8 0.99 25
Hawk Probable 0.7 1.07 25
Howards Probable 5.8 0.99 186
Hyperno-Reliance Probable 0.3 1.23 12
Kingfisher Probable 1.5 1.51 71
Swan/Swift Probable 8.6 1.42 392
Wedge Probable 0.5 1.04 18
Total Probable 18.2 1.24 728
6
Figure 1. Feasibility Study mineral resources (labelled blue for Priority deposits &
grey for other deposits) & exploration targets over geology.
7
Figure 2. Gidgee Shear Zone – 3D view of Main Gidgee Mining Area looking down to the northeast showing DFS pit designs (blue),
existing haul roads (red) and MRE block models (coloured by Au g/t)
8
Processing
The processing plant has been designed to process 2.4Mtpa of gold ore from multiple
open pit deposits at a combined LOM gold feed grade of 1.19 g/t Au.
The DFS process design incorporates conventional three stage crushing, single stage
ball milling, gravity gold recovery, Carbon in Leach (CIL), elution and smelting with the
following metrics:
Total Gold Recovery: 91.5%
Gravity Gold Recovery: 29.8%
Bond Ball Work Index: 18.3 KWh/t
Grinding Size P80: 75 µm
The plant includes the following major equipment areas:
Primary jaw crusher;
Secondary and tertiary cone crushers;
Crushed ore screening;
Milling;
Cyclone classification;
Gravity separation and concentration, and intensive leaching of gravity
concentrate;
Leaching and adsorption of cyclone overflow;
Elution circuit and carbon regeneration; and
Services and reagents.
Future expandability has been incorporated into the plant’s design to allow:
Crushing circuit to process 3.0Mtpa, by installing larger model primary and secondary
crushers; and
Milling circuit to process 3.0Mtpa by reserving the ground footprint for a future second
mill, and additional leach and adsorption tanks. A larger hydro cyclone cluster has also
been selected with spare outlets for future use.
Capital Costs
The Study estimates pre-production capital expenditure at A$350m, including mine
development (incl. minimal pre-strip required at Howards), construction of a process
plant and associated infrastructure, plant commissioning costs and a A$30m
contingency. An additional A$63m of sustaining capital is expected to be incurred
across the remainder of the Project’s life of mine.
9
The pre-production period is defined as the period up to the completion of the process
plant commissioning phase and all costs incurred during this period are classified as
pre-production capital.
A breakdown of the pre-production capital, sustaining capital and contingency
estimates is shown in Table 4: Capital Cost Estimate.
Table 4: Capital Cost Estimate
Operating Costs
Operating costs have been estimated using a build-up on a ‘first principles’ basis for
contracted mining costs (on the LOM plan), processing, operating and general
administration costs.
Operating costs incurred during the pre-production phase have been capitalised.
CAPITAL COST ESTIMATE A$M
Pre-Production (Incl Contingency)
Mining 13.3
Process Plant 159.0
Non-Process Infrastructure 114.1
Owner's Costs 30.1
Commissioning 3.5
Contingency 30.4
Total 350.4
Sustaining
Mining 4.5
Non-Process Infrastructure 58.4
Total 62.9
10
Project Operating Costs by area and All-in Sustaining Cost (AISC) is summarised in
Table 5 below.
Table 5: Summary of Operating Costs and AISC
Figure 3 shows the AISC and the production target ounces mined per year and the
breakdown of the JORC Code (2012) estimate categories underpinning the production
target.
Figure 3. Annual Ounces Mined and AISC
OPEX SUMMARY A$M
A$/t
Milled
A$/oz
Sold
Mining 1,509 60.21 1,715
Processing 642 25.62 730
G&A 227 9.05 258
C1 Cash Cost 2,379 94.89 2,702
Royalties 195 7.76 221
Sustaining Capex 63 2.51 71
All-in Sustaining Cost (AISC) 2,636 105.16 2,995
11
Figure 4 shows the annual mine schedule by source and grade.
Figure 4. Mining Schedule by Source & Grade
Financial Analysis
The financial analysis was completed using a financial model that calculated all
mining, processing and G&A costs based on the Production Target physicals, and
financial metrics such as pre and post-tax revenues, net present values (‘NPV’) and
internal rates of return (‘IRR’). The analysis has been conducted using a selected gold
price of A$5,500/oz.
The Project delivers total pre-tax free cash flows of A$1,854m, pre-tax NPV5 of A$1,307m
and IRR of 53.1%, and post-tax NPV5 of A$894m and IRR of 41.7%.
12
Figure 5 shows the pre-tax undiscounted cash flows on an annual basis.
Figure 5. Annual Project Cashflows (Pre-tax undiscounted)
Sensitivity Analysis
NPV5 sensitivities for gold price, grade, operating costs, grade, metallurgical recoveries
and capital costs at relevant ranges on a pre-tax basis are shown in Figure 6.
Figure 6. Project NPV Sensitivity Analysis
13
Key financial outputs applying a range of gold prices are shown in Table 6.
Table 6. Scenario Analysis – Gold Price Assumptions
Environmental and Approvals
Environmental baseline studies have been conducted to identify the key
environmental and heritage risks for the Project, as well as to support environmental
approval applications for Project development.
There are currently no Native Title Claim Applications over the “Priority” deposit areas,
however an ethnographic survey was conducted in November 2025 with Senior
Aboriginal Heritage Consultants (Wati) of the determined Tarlka Matuwa Piarku
Aboriginal Corporation, who all have documented ‘connections to country’ and to the
Project area. The Wati supported mining and gave their approval to explore and mine
in the “Priority” deposit areas.
The Project has an approved Mining Proposal to recommence mining. This includes
the operation of the existing processing plant, tailings storage facility and support
facilities. It includes an associated native vegetation clearing permit, which authorises
the clearing of 100 ha within an application area of 2,023.2 ha.
While historical approvals remain valid indefinitely, for future mining a variation or
expansion will require a new Mining Development and Closure Proposal (MDCP) and
associated works approvals and clearing permits.
The approvals pathway for recommencement of mining will be confirmed by the
results of the remaining surveys, the final mine plans, community and regulatory
stakeholder engagement.
Base Case
Key Financial Indicator Unit A$4,000/oz A$4,500/oz A$5,000/oz A$5,500/oz A$6,000/oz A$6,500/oz A$7,000/oz
NPV5 (Pre-tax) A$m 335 659 983 1,307 1,631 1,955 2,279
IRR (Pre-tax) % 19.5 31.4 42.5 53.1 63.4 73.4 83.1
Payback (Pre-tax) Years 4.17 3.42 2.50 1.92 1.67 1.50 1.42
LOM Free Cash Flow (Pre-tax) A$m 569 998 1,426 1,854 2,283 2,711 3,139
NPV5 (Post-tax) A$m 210 440 667 894 1,121 1,347 1,574
IRR (Post-tax) % 15.1 24.7 33.5 41.7 49.7 57.3 64.8
Payback (Post-tax) Years 4.58 3.75 3.00 2.33 2.00 1.75 1.58
LOM Free Cash Flow (Post-tax) A$m 395 698 998 1,298 1,598 1,898 2,197
14
Project Funding
In July 2026, Horizon appointed leading independent financial advisory group, Orimco
Pty Ltd, to advise on project financing for the Project. Formal engagement with
Australian and international financial institutions will commence shortly after the
release of the Study.
The Company has formed the view that there is a reasonable basis to believe that the
funding required for the development of the Project will be available as and when
required. This view is based on the strong technical and financial outcomes of the DFS,
the robust global debt and equity appetite for high-quality gold development
projects, the Project’s location, the experience of the Company’s Board and
management team and its track record of equity raising.
Investors should note that there is no certainty that the Company will be able to raise
the necessary amount of funding when needed (nor any certainty as to the form such
capital raising may take, such as equity, debt, hybrid and/or other capital raising). It is
also possible that such funding may only be available on terms that may be dilutive
to or otherwise affect the value of the Company’s existing shares.
Project Development Schedule
This Study demonstrates that there are strong grounds to conclude that the Project
has the potential to become a commercially viable stand-alone gold mining
operation.
Accordingly, the Board of Horizon Gold Ltd has approved the progression of the
Project into the Execution Phase, advancing it towards a Final Investment Decision
(FID) in Q2 2027.
The key objectives to support the Execution Phase are outlined in the forward work
plan below (noting that there is no guarantee these will be achieved):
a. Safety - Deliver the project with zero fatalities and zero serious injuries.
Achieve LTIFR at or below 1.0 and TRIFR at or below 6.0 across all Works
Packages throughout the Execution Phase.
b. Environment - Complete all remaining biological surveys by Q1 2027,
submission and obtain regulatory approvals for the DFS by Q2 2027.
Complete all required heritage surveys prior to ground disturbance and
meet all rehabilitation obligations progressively throughout the Execution
Phase.
c. Key Appointments - Onboard a Project Director , Commercial Manager,
Engineering Manager and Approvals Manager during Q4
2026 and establish the full Owner’s Team to the level required to lead
Process Plant EPC procurement by Q2 2027.
15
d. Accommodation Village – Commence accommodation village early works
program in Q3 2026 including site survey, geotechnical investigation,
concept design and development approval for the new village prior to
construction in Q2 2027.
e. Site Early Works – Commencement of site early works in Q1 2027 to upgrade
the existing village with additional rooms and services, construction of new
site roads and upgrade to existing roads.
f. Engineering - Engage the Process Plant EPC contractor by Q2 2027 and
progress detail engineering to a level sufficient to support the Definitive
Estimate and commence long-lead equipment procurement on schedule.
g. Equipment and Material Procurement - Commitment to procure all long
lead items in Q2 2027, including, but not limited to, the ball mill, power
generators and switch gear, and deliver the items in accordance with the
construction schedule.
h. Contract Formation and Execution - Award all major Works Package
contracts through a competitive and documented tender process. Ensure
all contracts include appropriate risk allocation, performance requirements,
and safety and environmental obligations.
i. Construction, Commissioning, and Handover - Achieve EPC contractor site
mobilisation by Q4 2027, commence process plant commissioning in Q4
2028, and achieve a successful handover to the Operations team in Q4 2028.
j. Deliver the project within the approved scope, schedule, and budget.
16
Figure 7 provides a high-level schedule of the major activities undertaken during the
project Execution Phase.
Figure 7: Schedule of the major activities proposed to be undertaken during the project
execution phase (noting that timing may vary)
Opportunities
Several opportunities to further strengthen the Project have been identified, and
include;
Sulphide gold inventory
The DFS is based on mining and processing free-milling ore only. Separate from that
case, the current Mineral Resource Estimate includes 9.3 Mt of sulphide mineralisation
grading 2.3 g/t Au for 698,000 oz of contained gold3
. This part of the mineral resource
estimate includes the permitted Wilsons Underground deposit, which hosts 2.9 Mt at
4.31 g/t Au for 400 koz3
. Studies are ongoing to assess the economic potential of this
material and to evaluate refractory gold processing options that, if successful, could
unlock additional value in future stages of the project (although no forecast is made
of whether they will be successful).
Free milling underground mining
Infill drilling is underway at Kingfisher aimed at converting inferred resources at depth
to indicated status, supporting a clearer path toward future underground
development. The deposit already has underground infrastructure left by previous
owners, which materially reduces the capital required to restart mining underground.
Similar opportunity exists at Swan and Omega, where extensive underground
development is already in place and could support mining of higher-grade zones at
depth with lower upfront capital than a greenfield underground start.
3
Refer to Horizon Gold Ltd ASX announcement titled “Gum Creek Project Gold Resource Update” dated 4 November 2025
17
Current underground (free milling) Mineral Resources include:
Swan Underground: 1.73 Mt at 4.19 g/t Au for 233,700 oz4
Swift Underground: 848 kt at 2.52 g/t Au for 68,800 oz4
Kingfisher Underground: 1.04 Mt at 3.38 g/t Au for 113,500 oz4
These extensive Underground Resources are being assessed to identify whether they
may offer a capital-efficient route to access higher-grade material lifting the
production profile and extending production beyond the current 10-year LOM open
pit base case, subject to the outcome of economic analysis.
Early site works
Substantial infrastructure remains on site from previous mining operations, giving
Gum Creek a clear head start on development. This creates an immediate opportunity
to begin early site works in already approved areas, ahead of full project construction.
Key early works include:
Extension of the existing village – Expanding current accommodation capacity
so a larger workforce can be housed on site as activity ramps up.
Early field work for the new accommodation village – Completing surveys, site
preparation and related groundwork so the permanent village can be built
efficiently when required.
Upgrades to existing site roads – Improving access and haul routes to support
safe, reliable movement of people, equipment and materials as operations
expand.
By advancing these works early, Horizon can reduce schedule risk, improve readiness
for construction and first production, and make full use of the infrastructure and
approvals already in place.
Mining approvals & early production pathways
The Project’s approved Mining Proposal and associated clearing permit, valid until
2029, reduce the time and cost of moving into operations and opens a clear pathway
to consider low-capital early production.
With these permits already in place, Horizon can potentially pursue options that do
not require building a full process plant before first gold:
Toll-processing – Mine ore from approved ore sources and haul it to a third-
party plant, generating cash flow while deferring major plant capital.
4 Refer to Horizon Gold Ltd ASX announcement titled “Gum Creek Project Gold Resource Update” dated 4 November 2025
18
Joint-venture or partnership – Partner with an established producer to share
risk, access processing capacity or funding, and accelerate first production.
Either route supports a faster, lower-risk start, leveraging existing site infrastructure
and the broader approvals process to create optionality for early cash flow ahead of
full-scale development.
Built-in expandability to 3.0Mtpa
The process plant has been designed with expandability to a nominal throughput of
3.0Mtpa. This future-proofs the facility for the development of numerous deposits
within the Gum Creek tenure, allowing capacity to be increased if additional ore
sources are brought online (although no forecast is made of whether this will occur,
and this is not a production target). Building this flexibility in from the outset means
the plant can scale efficiently without a full redesign, supporting the aspiration of
longer-term growth across the project.
Ore Reserve Estimate – Summary of Material Assumptions
The following is provided in accordance with ASX Listing Rule 5.9.1 and contains a fair
and balanced summary of the information material to understanding the maiden Ore
Reserve Estimate for the Gum Creek Gold Project reported in this announcement. It
summarises the separate report prepared in accordance with ASX Listing Rule 5.9.2,
being the JORC Code (2012) Table 1 disclosure (Sections 1 to 4) appended to this
announcement, which should be read in full in conjunction with this summary.
Material Assumptions and Outcomes from the Feasibility Study
The Ore Reserve is based on a DFS completed to a Feasibility Study level under the
JORC Code (2012), which determined that a mine plan for the Project is technically
achievable and economically viable after consideration of all material Modifying
Factors. The DFS is based on conventional open pit mining of free-milling ore from
seven “Priority” deposits, processed through a new 2.4Mtpa gravity and carbon-in-
leach (CIL) plant. Key economic assumptions include a gold price of A$4,500/oz for pit
optimisation and cut-off grade determination (selected as the expected long-term
floor price at the time of the optimisation work), a gold price of A$5,500/oz for cash
flow modelling, a discount rate of 5% per annum, and a Western Australian state
royalty of 2.5% of product revenue. Capital and operating cost estimates were
developed on a ‘first principles’ basis, with pre-production capital estimated at
A$350m (including a A$30m contingency) and a life-of-mine All-in Sustaining Cost of
A$2,995/oz. On these assumptions, the DFS outcomes include average gold
production of 88,000 oz per annum over an initial 10-year mine life, pre-tax free cash
flow of A$1,854m, a pre-tax NPV5 of A$1,307m and a pre-tax IRR of 53.1%. Sensitivity
analysis was undertaken across gold price, grade, metallurgical recovery, operating
and capital costs and discount rate. The Project remains most sensitive to gold price.
19
Criteria Used for Classification
The Ore Reserve is classified entirely as Probable and is derived solely from Indicated
Mineral Resources within the pit designs for the seven “Priority” deposits. No
Measured Mineral Resources were available for conversion and no Proved Ore
Reserves are reported. Inferred Mineral Resources were treated as waste in the pit
optimisations and pit designs, and were excluded from the Ore Reserve. No Ore
Reserves were estimated for the non-priority deposits. The Competent Person
considers the confidence in the Modifying Factors applied, and the resulting
classification, to be appropriate for this style of deposit. Anthony Keers from Auralia
Mining Consulting Pty Ltd completed an internal review of the Ore Reserve estimate.
Mining Method and Mining Assumptions
Mining will be by conventional open pit methods using drill and blast followed by
excavator and truck load-and-haul, staged across multiple pits and cutbacks to
reduce the pre-stripping period. Pit optimisations were completed using Whittle
software on the supplied Mineral Resource models, followed by detailed pit design
and scheduling. Geotechnical studies support overall wall angles of 38° to 51°, varying
by deposit and weathering profile, with benches up to 20 m high, batter angles of 50°
to 70° and berms of 5 m to 7 m. Mining recovery of between 94.5% and 99.5% and
mining dilution of between 8.4% and 23.0%, derived from a minimum selective mining
unit of 2.5 m x 2.5 m x 2.5 m, were applied to the production schedule and Ore Reserve,
with rounded values applied in the optimisations.
Processing Method and Processing Assumptions
Ore will be processed through a new 2.4Mtpa plant comprising three-stage crushing,
single-stage ball milling, gravity gold recovery and intensive leaching of gravity
concentrate, carbon-in-leach cyanidation, elution and smelting to produce gold doré.
These are conventional, well-tested processes appropriate to the free-milling, non-
refractory
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