Melody Gold has exercised its option to process gold surface materials at Horseshoe Metals’ Horseshoe Lights project, initiating a three-year exclusive licence that promises early cash flow to accelerate copper development.
- Melody Gold granted exclusive 3-year licence to process gold surface materials
- Agreement covers multiple gold stockpiles and tailings but excludes copper materials
- Monthly tonnage-based payments plus fixed monthly fee to Horseshoe Metals
- Recommissioned camp supports both gold processing and copper DSO operations
- Substantial mineral resources confirmed at Horseshoe Lights and Kumarina projects
Strategic Partnership Unlocks Gold Surface Material Value
Horseshoe Metals Ltd (ASX, HOR) has taken a significant step forward by announcing that Melody Gold Pty Ltd has exercised its option to process gold surface materials at the Horseshoe Lights Copper-Gold Project in Western Australia. This move activates a three-year exclusive licence agreement, enabling Melody Gold to retreat up to 500,000 tonnes per annum of gold-bearing surface stockpiles and tailings, generating early cash flow for Horseshoe Metals.
The agreement covers a broad range of gold surface materials, including subgrade stockpiles, rehandle stockpiles, leach vats, and flotation tailings, all adjacent to the historic open pit. Importantly, Horseshoe Metals retains rights to copper and mixed copper-gold surface materials, as well as all subsurface mineralisation, preserving its core copper development ambitions.
Operational Readiness and Financial Structure
To support this initiative, Horseshoe Metals has recommissioned its 20-person camp and infrastructure at Horseshoe Lights, facilitating both Melody Gold’s processing activities and the company’s planned direct shipping ore (DSO) copper operations. The financial arrangement includes monthly tonnage-based payments calculated on recovered gold equivalent value per tonne, alongside a fixed monthly payment of A$50,000 once processing commences.
Director Kate Stoney emphasised the strategic importance of this development, noting that unlocking value from gold surface materials will provide vital early cash flow to accelerate the redevelopment of the Horseshoe Lights copper asset. The partnership with Melody Gold, a Perth-based specialist with strong Chinese industry connections, brings both expertise and operational capacity to the project.
Resource Base and Project Outlook
Horseshoe Lights boasts a substantial mineral resource base, with over 12.85 million tonnes of measured and indicated material grading around 1% copper and containing significant gold and silver credits. The gold surface materials targeted by Melody include historic stockpiles and tailings from mining phases dating back to the 1980s and 1990s, offering a valuable opportunity to extract residual gold and precious metals.
Additionally, Horseshoe Metals provided updated resource estimates for its Kumarina Project, highlighting a combined measured, indicated, and inferred copper resource of approximately 835,000 tonnes at 1.3% copper. These resources underpin the company’s broader strategy to develop multiple copper-gold assets in Western Australia.
Implications for Horseshoe Metals and Investors
This agreement represents a pragmatic approach to monetising existing surface gold materials while maintaining focus on the company’s copper development goals. The early cash flow generated through Melody Gold’s processing activities is expected to support ongoing exploration and the ramp-up of DSO copper sales, potentially enhancing Horseshoe Metals’ financial flexibility and project momentum.
While the financial terms are structured to provide steady income, the actual recovery rates and operational execution remain to be proven as processing ramps up. Investors will be watching closely for updates on production performance and cash flow contributions in the coming months.
Bottom Line?
Melody Gold’s processing licence unlocks near-term value and cash flow, setting the stage for accelerated copper development at Horseshoe Lights.
Questions in the middle?
- What recovery rates will Melody Gold achieve from the diverse gold surface materials?
- How will the cash flow from gold processing impact Horseshoe Metals’ copper exploration budget?
- Could this partnership lead to further collaboration or expansion of processing rights?