Lake Johnston Out, Black Swan In: Horizon’s A$35 M Boost

Key Concepts

• Black Swan Processing Facility
• Lake Johnson Project
• Forestania Project
• Pre-feasibility Study (PFS)
• Engineering, Procurement, and Construction (EPC) contracts
• Capital Injection
• Drill Programs
• Holding Costs (Rents, Rates, Minimum Expenditure, Caretaker Costs, Insurance)
• Mine Life
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Return on Investment (ROI)

Summary

This transcript details a company's strategic decision-making regarding its assets, focusing on the divestment of the Lake Johnson project and the consolidation of efforts on the Black Swan project, with a particular emphasis on the Forestania acquisition.

Strategic Asset Allocation and Focus

The company has decided to divest the Lake Johnson project, despite its potential for lithium and existing nickel reserves estimated at approximately two years. The rationale behind this decision is that the project requires significant refurbishment and additional elements to become viable, representing "too much" work and capital investment for the company at this time. The company's primary focus is to "consolidate that area" and "focus 100% and deliver our black swan project."

The acquisition of Forestania is highlighted as a strategic move. Forestania offers a "good base load of gold resources" and its grounds are also prospective for nickel and lithium. The company chose Forestania because it already possesses "a bit of a critical mass" and has been actively consolidating the area.

Black Swan Project Development and Funding

A significant capital injection of $35 million is crucial for refurbishing and repurposing the Black Swan plant into a gold plant. The company is on track to deliver its Pre-feasibility Study (PFS) for the Black Swan plant in the current December quarter. Following the PFS, the company will proceed to detailed design and secure Engineering, Procurement, and Construction (EPC) contracts in early next year.

This funding is essential to "close the gap on the funding that we'll require" and will also enable the acceleration of drill programs. A "detailed and heavy exploration program" is planned for the first half of 2026.

Cost Savings from Divestment

Divesting the Lake Johnson asset is projected to result in significant cost savings. The company estimates saving "around $600 to $800,000 a year" by eliminating "holding costs associated with plants and also ground in WA." These holding costs include "usual rents and rates and minimum expenditure you need to spend on the ground," as well as "caretaker costs and quite high insurance costs" associated with holding a plant.

Key Catalysts and Future Outlook

The next major catalyst for the company is the release of the PFS study in the current December quarter. This study is expected to demonstrate the Black Swan plant's capability to operate at "1.5 million tons per annum" with a "minimum 5 year mine life." The PFS will provide crucial financial metrics to the market, including Net Present Value (NPV), Internal Rate of Return (IRR), and Return on Investment (ROI), thereby illustrating the company's potential.

In addition to the PFS, the company anticipates releasing production updates and drilling updates. Further details regarding the exploration program planned for early 2026 will also be communicated later in the quarter.

Conclusion

The company is strategically prioritizing its resources and capital towards the Black Swan project, leveraging the acquisition of Forestania for its existing gold resources and prospective nickel and lithium potential. The divestment of Lake Johnson is driven by a need to reduce capital expenditure and focus on core projects. Key upcoming milestones, particularly the Black Swan PFS, are expected to provide significant financial clarity and de-risk the project, paving the way for future development and exploration.