Producers, technically yes as HRZ is mining atm under two toll agreements but my current focus as you have noted is the dev space as we're seeing institutional risk capital come down the curve looking of the next mines.

I haven't done a lot of work on it yet and don't own it but VAU maybe be cheap and reminds me of WGX in early 2023, production improving (VAU is expanding) and an onerous hedge book rolling off over the next 6-12mths, which coupled with a rising gold price gives 3 levers on a cashflow inflection. A producer like this is were I see the better opportunities remain in the producer segment.

I think people should also be on the look out for producers that look like WAF over the last year where cashflows + debt are used/taken on to build a second or third major mine. As the capex is sunk and production ramps up, this create another CF inflection/lift that drives re-rates the stock. Usually the stock will consolidate or underperform during the build phase which creates the opportunity. When its a second or more mine, taking on debt is a lower risk as there is existing cashflow that can help if the build/ramp up don't go smoothly.

Adding on VAU, the CF inflection is part of it. The growth guided by VAU should drag it up a tier which has a bigger multiple (note below Tier 3 is a depressed multiple zone). So the overlay is a higher multiple on expanding CFs. KOTH expansion adds 2.5mpta in mill capacity which at the head grade of ~1.2gpt adds ~95kozpa. Mt Monger will lift too so in ~1-2yrs time, VAU would be 500kozpa+.

A snap from my proprietary gold comp sheet. I note Tier 3 is a little thin on names and most he main names are VAU, WAF, PRU, WGX and RMS which are reinvesting biggly into their growth and long term mine plans or struggling to digest a big merger (WGX).

@BkrDzn Do you have a view as to whether today's Gold-Mining-and-Processing-Update.PDF from HRZ is as you'd expect, better or worse? They are creating cashflow, but there have been some delays and they do mention a couple of issues ("Cost performance in the June half has been impacted by the establishment of stockpiles, lower than expected grade performance in the early stages of mining at Boorara and higher strip ratio.")

They also mention that, "With continuous ore production and haulage now achieved at Boorara and grade control drilling at the operations well advanced, along with lowering strip ratios while grades improve, the operations are now well set-up for stronger cost performance and cash flow generation in the December half 2025." ...so flagging a softer current (June) Qtr and a stronger December Qtr.

I found this graphic particularly interesting:

That's a LOT of tenements with gold in them! However, to date, the revenue dollars are not huge, but it's still early days.

I'm assuming that the top number (row one) in the "Revenue Received (A$M)" column in the table above is supposed to be 4.951, not 4,951 as stated, because if that comma is correct, they are claiming to have generated almost $5 Billion dollars of revenue out of High Grade Ore Stockpile 1 at Boorara, which is not very believable for a company with a market cap under $200 million.

The share price hasn't reacted overly positively to this update, being either flat or up one tenth of a cent throughout the day so far:

Choppy, but the overall trajectory across the full 12 months is up, as you'd hope it would be. What sort of exit strategy would you suggest for HRZ if you don''t mind me asking @BkrDzn - And I know I've only been holding them for a week or two, but having re-read your report I'm thinking about whether it's best to plan to exit or reduce once they achieve part, most, or all of their potential, understanding that will take time to achieve. I'm trying to view them without factoring M&A into the picture, but obviously there are a plethora of possible outcomes, as well as twists and turns along the journey to be expected. I guess what I've started thinking about is whether they are spreading themselves a bit thin and trying to do too much in too many different places at the same time.

Using different toll treatment options is a positive, in that they are reducing trucking distance as well as establishing diversification of partner options, but I'm wondering if there are also negatives in that diversification. I guess it all depends on the competency of HRZ management and their ability to keep all of the plates spinning at the same time while keeping their eyes on the bigger picture and what they are trying to achieve longer term. I reckon I need to do more work on their management and their respective backgrounds and track records elsewhere to build greater conviction.

Disc: Holding, but not adding yet.

The research process is to update morning the following day so I can talk more once that is done and published.

Update is attached below. TL;DR is getting back on track and largely in line with expectations from a trajectory perspective.

HRZ Horizon Minerals RaaS Update 2025 06 19.pdf

That ',' is a error as you suspect. Higher front end cost element is frustrating but I think its made up for on the back end so best to assess cumulative metrics going forward. I think as mining, haulage and processing match up and run at steady stage, CF gen will be more consistent and HRZ will have more granular details on costings in absolute and on a unit basis.

Having some Boorara ore go through FMR is better as the cost is lower than Paddington and means you monetise the total ROM ore within the same timeframe rather than negotiating an extension of higher run-rate with Norton (who can be see you next Tuesdays).

I'm not sure what the best exit is and that will be different to each person. Also valuation is dynamic and moves as value is created in a company, a topic I highlighted with MEK over time. HRZ will have the same dynamism to consider as things progress. All I can further say is I own as the analyst and I can't sell except in very specific circumstances so would not be the best person to ask, thus the best guide I think is to see how yourself or others have traded similar set ups i.e. MEK.

Very helpful thanks @BkrDzn - I thought I'd replied to you already but I clearly hadn't, so sorry about that - the update is much appreciated. I wasn't overly surprised with MEK's CR, particularly after you had flagged it as a strong possibility in your view; And I had lightened my real life MEK position to top up AAR ahead of their FS release, meaning the largest to smallest positions in my 5-stock speccy PF are now AAR, MEK, HRZ, GG8 then NMG being the smallest.

I note NMG are in a TH "pending an announcement by the Company in respect of an update on Crown Prince gold project approvals" which they expect to release by Tuesday. Any thoughts on NMG @BkrDzn and their project approvals process, or not one you follow closely?

I half expect NMG to be taken over by WGX, but I don't know when. NMG got me very interested with their visible gold announcement back in March - with this image in particular. There's something to be said for DD instead of AC/RC drilling. More expensive, but when you get a nice clean core like this:

And this:

(Photos 1 & 2: Visible Gold in Quartz - Carbonate Vein intersected at 252m down hole in NGGRCDD974 within a broader 16m wide shear zone)

Source: VISIBLE GOLD IN DIAMOND CORE AT CROWN PRINCE.PDF [10th March 2025]

Then in May this grade control drilling showed decent gold at or just below surface:

Excerpt sourced from: High-Grade Gold Intercepts within Caprock Drilling.PDF [13th May 2025]

NMG is my smallest position in that 5-stock speccy portfolio, and I don't have high conviction in/on the company but I think they're worth a dice roll. I have higher conviction on MEK and AAR and I'm getting there on HRZ also now. I also have decent conviction on Gorilla Gold (GG8) as I like the story, where the assets and management came from, and their skin in the game, with two of the directors owning over 17% of the company between them and Simon Lawson's involvement as well. I also like how much drilling GG8 are doing, and how much gold they are finding. That's one small gold explorer that's going to keep putting money into drilling I reckon, which means the next positive results announcement could always come at any time. Like having ongoing lottery tickets in "Set For Life" - there's a draw every day so any given day could provide a nice surprise. That's how I look at GG8 anyway, not investing, more gambling, but better odds than the dogs or the horses, IMO anyway.

I reckon a portfolio of 5 such companies with money I can afford to lose is a reasonable way to go about it, as I don't need all of them to be winners, just two of them to 3-bag or better would do the trick. Or three of them to double. MEK has tripled already from when I first got into them at 5 to 6 cents/share (August through November 2024). MEK got up to 18.5 cps on the 12th, 13th and 16th of this month, and they're now at 15.5 cps after announcing a CR (placement) priced @ 15 cps on Thursday. Expected and accepted. Onwards and Upwards.

I don't have much views on NMG other than I not the biggest fan of the MD. I also don't think WGX has to do a deal. They effectively own a blocking stake on one side and the ore purchase deal on the other. Not sure why they'd have or need to stump up $250m+ based on the current gold resource and mineable inventory.

Thanks @BkrDzn - I'll try to do some more digging on NMG's MD and his past track record.