Barry FitzGerald writes his legendary Garimpeiro resources column weekly for Stockhead

Proving up a gold resource base of more than 1 million ounces is usually a major re-rating event for a gold junior.

Achieving that benchmark alerts the market to the potential for a junior to make the transition to producer status.

A recent example of all that is Breaker (ASX:BRB). Since announcing it cracked 1 million oz at its Bombora discovery in WA, its shares have powered 63 per cent higher to 36c.

But what does it all mean for the juniors out there that were “born’’ with a 1 million oz-plus resource like Horizon Gold (HRN)?

Not a lot is the answer.

Horizon was spun out of nickel group Panoramic in December 2016 in a $15m IPO at 40c a share to pick up the running at Gum Creek — a gold project near Meekatharra in WA with an existing gold resource of 1.25 million oz grading a handy 2.25g/t gold.

Horizon — owned 51% by Panoramic — has been trading back at 20c for a market cap of $15m or $A12 a resource oz, making it one of the cheapest – if not the cheapest – of the gold juniors based on that metric.

So having 1m oz-plus in the bag is no guarantee of a strong market rating like that afforded to juniors when they cross the “critical mass’’ threshold of 1m oz for the first time.

In Horizon’s case, the market wants to see growth in the free milling gold at Gum Creek as distinct from the refractory or difficult-to-treat gold, and confirmation that the emerging story of a high-grade underground opportunity has legs.

Horizon has been making progress on both fronts and it will have the advantage, when a production comes to being made, of having lots of infrastructure associated with Gum Creek’s previous life as a gold producer.

The half a dozen or so treatment plants owned by others in the region also give it toll treatment options.

But as Horizon’s 20c share price reflects, the market is not too excited just yet on Gum Creek’s gold journey:

Horizon Gold shares (ASX:HRN) over the past year
Horizon Gold shares (ASX:HRN) over the past year

Zinc and copper

If Horizon only had the gold story to tell, it would be the end of this story.

But is has just added an exciting zinc-copper leg to its extensive Gum Creek tenements after some nice structural and stratigraphic reinterpretation work led to the recent drilling of the Altair prospect.

Long known as a copper prospect based on near surface copper anomalism, Altair now has zinc thrown in to the mix.

A single hole at the prospect recently returned 55m grading 3.32% zinc and 0.52% copper from a depth of 184m which included a 9m zone grading 6.69% zinc and 1% copper from 213m.

Importantly, the 55m intersection was from a position well below the depth of all historical drilling at Altair.

Real opportunity

Peter Harold, Horizon’s non-executive chairman, said that while it was early days, there was now a real opportunity to add a base metal element to the known gold prospectivity of Gum Creek.

“This a very exciting development for Horizon given the potential strike length and the positive outlook for the zinc and copper prices,’’ Harold said.

Horizon is wasting no time in testing Altair’s big-time potential with a follow up drilling program.

Harold told Garimpeiro a drilling rig would soon start the first of a planned six step-out holes from the discovery hole. It will establish the orientation and extent of the mineralisation.

Things could get exciting if the step-out holes can match the thickness and grade of the discovery hole.

In the meantime, progress in confirming the potential for a high-grade underground gold operation will not hurt either for the lightly capitalised stock.