Chinese bullion demand takes hit in risk to gold price rally
Total demand for bullion fell almost 6% from a year earlier in the first half to 524 tons, the China Gold Council said.
Horizon Minerals (ASX: HRZ) is going ahead with development of the Boorara gold mine in Western Australia, located only 10 km east of Northern Star Resources’ Super Pit gold mine, the state biggest.
The company said the board’s investment decision allows for an immediate start of pre-production works, with key technical and management roles already filled, including site senior executive and quarry manager.
The move is a significant milestone for the company, managing director and chief executive Grant Haywood said. He added the development will make Horizon Australia’s newest gold producer.
“We are seeking to unlock the significant latent potential within our extensive portfolio of development assets, which hosts a 1.8 million ounce mineral resource,” Haywood said.
Horizon said first contracts for mining and ore haulage services have been awarded, but payment will happen only when the first gold pour is sold and funds received.
The company will oversee management and technical services as construction of Boorara progresses. Horizon noted that key technical and management roles have already been filled, including site senior executive and quarry manager.
Mining at the open pit will go on for an initial period of 14 months, and processing for 19 months. First gold pour is expected in October this year, it said.
Boorara was trial-mined in 2016 and generated 30,239 tonnes of ore, grading 1.73 g/t gold. Processing added 13,095 tonnes of gold grading 0.68 g/t, which was stockpiled.
The pit’s latest mineral resource estimate comprises 10.5 million tonnes of gold grading 1.27 g/t, for 428,000 contained ounces.
Following the resumption of production at Boorara, the company said it aims to develop other projects in parallel to establish Horizon as a long-term, sustainable gold producer in a favourable gold price environment.
Record-high gold prices have sparked significant activity in the Australian bullion sector. Evolution Mining (ASX: EVN) in December agreed to buy an 80% stake in the Northparkes copper-gold mine in New South Wales from Chinese miner CMOC Group. That followed the high profile acquisition of Newcrest by gold giant Newmont (NYSE: NEM) for more than $15 billion.
Red 5 (ASX: RED) acquired in February Silver Lake Resources to build a mid-tier gold producer valued at $1.5 billion, and Perseus Mining (ASX, TSX: PRU) took over OreCorp in April.
Canada’s Karora Resources (TSX: KRR) (OTCQX: KRRGF) voted last week in favour of being acquired by Australia’s Westgold Resources (ASX: WGX). The deal creates a Western Australian gold producer with an annual output of over 400,000 ounces of the precious metal per year.
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