Horizon Minerals (ASX: HRZ) Raises A$175M to Build 100,000oz Gold Producer- Buy the Dilution or Step Aside?

Horizon Mineral’s A$175m Raise Fuels Black Swan Gold Ambition

Horizon Minerals (ASX: HRZ) went into a trading halt this week to secure an A$175 million fully underwritten share placement at A$1.08 per share. That price is a 12.6 per cent discount to its last closing price of A$1.23. The funds will be used to develop the Black Swan Processing Hub near Kalgoorlie. A scoping study suggests the project could produce about 102,000 ounces of gold each year for five years, with first gold targeted for mid-2027.

For a company that was valued at roughly A$254 million before the capital raise, the growth plan looks attractive. However, the new shares mean existing investors will be diluted, and the project still needs to be delivered on time and on budget. Several key steps must go right for this plan to succeed.

What are the Best ASX Gold Stocks to invest in right now?

Check our buy/sell tips

Black Swan’s Infrastructure Edge Could Fast-Track Horizon Minerals to Mid-Tier Producer

What makes Horizon’s story different from most gold developers is that it does not need to build a processing plant from scratch. The company already owns a 2.2 million tonne per annum plant at Black Swan, picked up through its merger with Poseidon Nickel in early 2025. That plant has an estimated replacement value above A$150 million and is already connected to power and water.

Horizon Minerals just needs to refurbish and convert it to process gold instead of nickel. This is a much faster and cheaper path to production, and we believe it meaningfully reduces the timeline risk that often trips up pre-production companies.

The scoping study puts total pre-production capital at A$160.5 million, which lines up well with the A$175 million raise, giving the company a clear funding path to production.

Horizon Minerals is not just waiting around for Black Swan either. The company is already mining at Boorara and Phillips Find, with Boorara alone expected to generate around A$30 million in free cash flow at today’s gold prices. That ongoing income is a real advantage over peers who simply burn cash while they develop. And with 1.82 million ounces of gold resources across multiple deposits within trucking distance of the plant, there is plenty of ore to keep Black Swan fed well beyond the initial five years.

The Dilution Question. Is A$1.08 a Fair Price at A$5,000+ Gold?

The placement will issue about 162 million new shares across two tranches. The first tranche of A$55 million settles shortly, while the larger A$120 million tranche needs shareholder approval, expected around 7 April.

At today’s gold prices above A$5,000 per ounce, the project economics look strong. But here is the catch. The mine plan is based on a grade of 1.65 grams per tonne, which is on the lower side. At current prices, the margins are healthy, but if gold falls 20 to 30 per cent, those margins would shrink fast.

There is also a confidence question. About 74 per cent of the planned ore sits in higher-confidence measured and indicated categories, but 26 per cent is still classified as inferred, meaning less certainty around that portion. With roughly 16 months until first gold, there is execution risk around plant conversion and mining ramp-up to consider.

The Investor’s Takeaway

The bull case is straightforward. Horizon Minerals is a funded gold developer with access to infrastructure in one of Australia’s top gold regions. If it becomes a 100,000-ounce-per-year producer, a pre-raise market value of A$254 million does not look expensive by ASX standards, as long as the company delivers on its plans.

The risks are just as clear. The project has relatively low grades, there is meaningful dilution from the capital raise, and there is execution risk. Several things need to go right at the same time. The scoping study is encouraging, but it is still an early-stage study and not yet a final development plan.

In our view, Horizon Minerals may suit higher-risk gold investors who believe gold prices above A$5,000 per ounce will remain strong. More cautious investors may prefer to wait for key development milestones at Black Swan before investing.