Horizon Gold DFS Confirms 880,000oz Project With 53% IRR and A$1.3B Pre-Tax NPV
Horizon Gold Confirms High-Margin Economics at Gum Creek
Horizon Gold (ASX: HRN) has released the Definitive Feasibility Study (DFS) for its 100%-owned Gum Creek Gold Project in Western Australia, confirming robust economics for a 10-year open pit operation with 880,000 recovered ounces at an All-in Sustaining Cost (AISC) of A$2,995/oz. Against a base case gold price of A$5,500/oz, the study delivers pre-tax free cash flow of A$1,854 million, a pre-tax NPV5 of A$1,307 million and a pre-tax IRR of 53.1%, positioning the project for a Final Investment Decision in Q2 2027 and first gold in H2 2028.
Gum Creek’s Financial Case: The Margin Story
| Metric | Value |
|---|---|
| Gold Price Assumption (Base Case) | A$5,500/oz |
| Life of Mine | 10 years |
| Average Annual Production (First 5 Years) | 98,000oz |
| Peak Annual Production (Year 2) | 114,000oz |
| Total Gold Recovered (LOM) | 880,000oz |
| Pre-Production Capital | A$350 million (including A$30 million contingency) |
| All-in Sustaining Cost | A$2,995/oz |
| Pre-Tax Free Cash Flow (LOM) | A$1,854 million |
| Pre-Tax NPV5 | A$1,307 million |
| Pre-Tax IRR | 53.1% |
| Pre-Tax Payback (From First Production) | 23 months |
| Post-Tax NPV5 | A$894 million |
| Post-Tax IRR | 41.7% |
At an AISC of A$2,995/oz versus the base case gold price, Gum Creek delivers a pre-tax margin of approximately A$2,500/oz—a robust cushion that supports the 23-month payback and positions the asset as a high-return development opportunity in the current WA gold landscape.
Managing Director and CEO Scott Williamson
“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.”
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What a Definitive Feasibility Study Actually Means
A Definitive Feasibility Study is the highest-confidence engineering and economic assessment before committing capital to mine construction. It sits above Scoping and Pre-Feasibility studies in the project development hierarchy, incorporating detailed engineering, metallurgical testwork, geotechnical investigations, environmental approvals planning and capital/operating cost estimates to an accuracy level of ±10–15%.
The DFS also delivers a maiden Ore Reserve Estimate of 18.2 Mt at 1.24 g/t Au for 728,000 contained ounces, all classified as Probable Ore Reserves and reported in accordance with the JORC Code 2012. Ore Reserves represent the economically mineable portion of the broader Mineral Resource base—the subset that has been tested through rigorous mine design, scheduling and financial modelling to confirm commercial viability.
For Gum Creek, the Production Target over the LOM is underpinned by 76% Probable Ore Reserves, 18% Indicated Resources (predominantly from non-priority pits) and 6% Inferred Resources across all pits, with the first five years of production underpinned by approximately 97% Probable Ore Reserves. The remainder of the Production Target is supported by Indicated and Inferred Mineral Resources. There is a low level of geological confidence associated with Inferred Mineral Resources, and no certainty further work will convert them to Indicated Resources or that the Production Target itself will be realised.
All-in Sustaining Cost (AISC) is an industry-standard metric capturing the near-complete cost to produce an ounce of gold—mining, processing, general and administrative (G&A) costs, royalties, and sustaining capital expenditure—but excluding pre-production capex and exploration. The gap between AISC and the prevailing gold price is the operating margin, which at Gum Creek equates to approximately A$2,500/oz pre-tax at the base case price assumption.
The Investment Case: Margins, Scale and Infrastructure
Three factors de-risk Gum Creek as an investment proposition: proven economics, production scale, and the advantage of existing infrastructure from prior operations between 1987 and 2005 (during which time the site produced more than one million ounces).
Existing site facilities include an operational airstrip, haul roads, an existing 50-person camp expandable to over 100 persons, and potable water supply—materially reducing capital requirements compared to a greenfield project. Mining approvals remain in place: an approved Mining Proposal valid until 2029 and an associated clearing permit authorising 100 hectares of disturbance, streamlining the restart pathway and removing a layer of permitting risk.
The processing plant design incorporates built-in capacity for future expansion to 3.0 Mtpa—above the base case 2.4 Mtpa nameplate—providing growth optionality if additional ore sources are brought online (although this is not a production target and no forecast is made whether that scenario will eventuate).
Growth levers beyond the DFS base case include:
- Free-milling underground ore: Extensive existing underground development at Swan (1.73 Mt @ 4.19 g/t Au for 233,700 oz), Swift (848 kt @ 2.52 g/t Au for 68,800 oz) and Kingfisher (1.04 Mt @ 3.38 g/t Au for 113,500 oz) could add higher-grade, capital-efficient production. These Resources sit outside the current DFS scope but represent a clear pathway to extend production and lift average head grades through relatively low-cost underground access.
- Sulphide gold inventory: 9.3 Mt @ 2.3 g/t Au for 698,000 oz of sulphide mineralisation, including the permitted Wilsons Underground deposit (2.9 Mt @ 4.31 g/t Au for 400,000 oz), is subject to ongoing refractory processing studies. If economic flowsheets are developed, this material could unlock material additional value.
- Reserve growth from non-priority pits: Completing biological surveys at the nine “Other” deposits could support conversion of approximately 234,000 oz into the Ore Reserve. This would lift total Reserves toward the 962,000 oz Production Target level, reducing reliance on Indicated and Inferred Resources in the mine schedule.
- Early production optionality: The existing Mining Proposal and clearing permit open pathways to low-capital early production via toll-processing or joint-venture arrangements, allowing cash generation ahead of full plant construction.
These factors position Gum Creek not as a fixed 10-year, 880,000-ounce asset, but as a platform with clear expansion levers—the DFS represents a floor, not a ceiling.
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Funding and the Road to Final Investment Decision
Horizon does not have the capacity to fund development from internal cash reserves; external funding via a debt and equity mix will be required and determined before Final Investment Decision. The company appointed Orimco Pty Ltd in July 2026 as financial adviser to arrange project finance. Formal engagement with Australian and international financial institutions is expected to commence following DFS release.
The board has formed the view there is a reasonable basis to believe requisite funding will be available when needed, supported by the DFS outcomes, the project’s 100% ownership structure, debt-free balance sheet, approximate A$200 million market capitalisation, WA jurisdiction, and board experience in mine development and equity raising. However, no certainty exists that funding will be secured in the required quantum or form (equity, debt, hybrid or other structures), nor that it will be available on non-dilutive terms to existing shareholders.
Key milestones toward FID and first production:
- Early works and approvals progressing through 2026–27
- Complete biological surveys by Q1 2027
- Engage Process Plant EPC contractor and commit to long-lead items by Q2 2027
- Final Investment Decision – Q2 2027
- Process plant construction commences Q4 2027 (~12-month build)
- First gold – H2 2028
This timeline provides investors with a clear catalyst calendar to monitor project de-risking and execution.
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