Horizon Faces Funding Pressure Despite Capital Raise, Cash Burn Continues

Quarterly Cash Flow Overview

Horizon Minerals Ltd has disclosed a net cash outflow of $5.165 million for the quarter ending 31 December 2024, reflecting ongoing expenditures in exploration, evaluation, and corporate activities. Despite the deficit, the company closed the quarter with a healthy cash balance of $9.624 million, providing a buffer to sustain operations in the near term.

The cash burn primarily stems from payments related to exploration and evaluation, staff costs, and administration, underscoring Horizon's commitment to advancing its gold exploration projects. Operating cash flows remain negative, a common scenario for junior mining companies in the development phase.

Investing and Financing Activities

Investing activities contributed a modest net inflow of $169,000 for the quarter, contrasting with a net outflow of $382,000 year-to-date. This suggests some asset disposals or recoveries, although exploration expenditure remains a significant cash drain.

On the financing front, Horizon did not draw down on its $5 million Nebari convertible loan facility during the quarter, maintaining the facility as an available liquidity option. The loan terms include a 7% convertible coupon and a 36-month term, with conversion rights that could dilute shareholders but provide flexible funding.

Capital Raising and Funding Outlook

Importantly, Horizon completed a capital raising in January 2025, shortly after the quarter ended, to shore up its cash position. This move addresses concerns about the company's funding runway, which was estimated at approximately 1.8 quarters based on current cash outflows and cash on hand.

The company affirms its expectation to maintain current operating cash flows and continue meeting its business objectives, supported by the fresh capital injection. This proactive funding strategy mitigates immediate liquidity risks and supports ongoing exploration and development activities.

Strategic Implications

Horizon Minerals’ cash flow report highlights the typical challenges junior miners face balancing aggressive exploration with financial sustainability. The recent capital raising signals investor confidence but also raises questions about dilution and the timing of future funding needs.

With exploration expenditure continuing to weigh on cash flow, the company’s ability to convert resources into production or secure additional financing will be critical for its medium-term outlook. Market watchers will be keen to see how Horizon manages this balance amid fluctuating gold prices and operational milestones.