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Horizon Minerals and Poseidon Nickel to Merge, Creating Western Australian Gold Miner
Oct. 28, 2024 09:20AM PST
Horizon will acquire 100 percent of Poseidon’s fully paid ordinary shares and unlisted options via a scheme implementation deed.
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Horizon Minerals ( ASX:HRZ) and Poseidon Nickel (ASX:POS,OTC Pink:PSDNF) said in a joint announcement on Friday (October 25) that they have agreed to merge via a scheme implementation deed.
The deal aims to create a new Western Australian mid-cap gold producer, consolidating Horizon’s large gold resource and Poseidon’s Black Swan processing infrastructure. All assets are located in the Kalgoorlie-Coolgardie districts.
Under the arrangement, Horizon will acquire 100 percent of Poseidon’s fully paid ordinary and unlisted options. Each Poseidon shareholder will receive 0.1156 Horizon shares for every Poseidon share held.
"There is strong alignment between Poseidon's strategy and that of Horizon, which is one of the core pillars underpinning this regional consolidation,” said Poseidon CEO Brendan Shalders. “Together we have greater capability to deliver on longer-term cashflow generation from cornerstone operations fitting for an emerging mid-tier gold producer."
Horizon’s Burbanks and Boorara gold deposits will serve as the cornerstone assets as the combined company aims to deliver a five year mine plan to fill Poseidon’s Black Swan processing plant.
Black Swan will be converted into a gold plant, a move that the companies believe has the potential to unlock latent value in Horizon’s portfolio and “open up the region for toll milling and further consolidation.”
When combined, Horizon and Poseidon's projects have a JORC mineral resource of 1.8 million ounces of gold at an average grade of 1.84 grams per tonne, plus 422,700 tonnes of nickel at an average grade of 1 percent.
Once the agreement is in place, Horizon shareholders will own 69.8 percent of the merged company, while the remaining 30.2 percent of the entity will be held by Poseidon shareholders.
Horizon announced plans to move forward with development at Boorara in July, with the first gold pour coming in October. It is projected to generate cashflow of AU$30 million at an AU$3,600 per ounce gold price over its life.
Meanwhile, the Black Swan processing plant has a 2.2 million tonne per year nickel sulphide concentrator. It is “ideally located as a central processing hub” for Horizon’s gold projects and other regional opportunities.
The concentrator will also unlock value for Horizon’s high-grade Nimbus silver-gold-zinc project, which reportedly contains 20.2 million ounces of silver, 78,000 ounces of gold and 104,000 tonnes of zinc.
“Outside gold, the merged nickel and silver assets enhance the respective asset values of both parties and retain full exposure for the combined shareholder group to crystalise value in any future sustained price upturn for these commodities,” commented Horizon Managing Director and CEO Grant Haywood.
The merger is expected to close in late January or early February 2025, subject to customary closing conditions.
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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
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