Horseshoe Metals (ASX: HOR) has been approved for early participation in the Mining Rehabilitation Fund, releasing its existing environmental bond. This will provide an additional $1,024,000 in available cash for the company.
The cash boost will be allocated to the company's highly prospective projects including Horseshoe Lights, where Horseshoe Metals is currently testing for potential massive sulphide copper-gold mineralisation.
A downhole electromagnetic survey (DHEM) started last week, with results due in August.
Five holes are planned to be used for the DHEM survey to test for off-hole conductors that may represent massive sulphide copper/gold mineralisation, with depths of up to 706 metres to be tested, targeting the Narracoota Formation that hosts both Horseshoe Lights and Sandfire Resources' (ASX: SFR) DeGrussa copper gold mine.
The Horseshoe Lights Project is located 75 kilometres west-northwest of DeGrussa.
Adding to the prospectivity of the area, the Narracoota Formation is largely untested beneath the overlying Ravelstone Formation.
Horseshoe Metals has successfully applied for early participation of the new Mining Rehabilitation Fund (MRF) established by the Western Australian Government's Department of Mines and Petroleum.
At present the company has a cash backed Unconditional Performance Bond in respect to the Horseshoe Lights Copper/Gold project. The value of the Bond is $1,066,500.
The annual MRF levy charge for the company's participation is around $43,000. The company's bond will be retired shortly, releasing $1,066,500 which is currently held as a cash-backed security by the Horseshoe Metals bankers.
This represents a net gain of around $1,024,000 to Horseshoe Metals.
The $1 million cash boost is very positive outcome for Horseshoe Metals in the current difficult capital markets.
Funds will be allocated to two projects, including Horseshoe Lights.
The search for massive sulphide copper-gold mineralisation may have just begun at Horseshoe Lights, but anticipation is building for the DHEM results due out next month - with the key that the project is within the Narracoota Formation - which hosts Sandfire Resources' DeGrussa copper gold mine.
One week ago Proactive Investors said: "The highly anticipated results are expected to be available in August, and if there are any indications of massive sulphides then there is the potential for a positive re-rating in the stock from the current $0.05 level."
Since this was published, Horseshoe Metals is now 40% higher at $0.07 on solid volume.
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