Over the past few weeks there has been a flurry of activity on both the mining front and with the processing plant and laboratory. While it may appear that these events just came to fruition the fact is they have been the result of steady research, hard fought negotiations, networking efforts, offers, rejections and counter offers. Through it all we have an operation that is coming together in a way that is attracting keen interest from large global mining investment players.

Optimization of Extraction & Processing

Carter Boggus our new processing plant engineer arrived in Peru two days ago. His first impression based on the data derived from current mineral recoveries was that we should add "tailings thickener technology" to our plant. With this equipment on board we can expect to bring the overall gold recovery rates up from the current 85-90% to as high as 99% thereby increasing our overall yield. Simply put, after the initial 15 hour cyanide agitation leaching treatment the tailings thickener process (over 48 hours) would continue to leach the remaining gold trapped in the ore. Clearly, extrapolating that extra 10-15% each month over a 12 month period will  add significant numbers to the company's bottom line.

 Environmental & Community Relations

Furthermore, Mr. Boggus will be instituting a method giving us the ability to neutralize the cyanide by a simple chlorine wash allowing us to eliminate the need for an on site tailing pond. This will have a quite dramatic threefold effect: 1: cutting our production costs; 2: protecting the environment and 3: strengthening community relations whose importance in the area can’t be over emphasized.

 The Benefits of owning our own Processing Capability

On another note, Gold Horizons Mining's senior joint venture partner is negotiating the purchase of an estimated 80,000 tons of 9 gram gold tailings from Intigold Mining SA.  Samples of the tailings have been taken to our laboratory for metallurgy testing. Intigold Mining SA is a large concern in Peru and has some 1 million tons in tailings available. Google "Intigold Mining" to see exactly their presence in the mining world. The costs to purchase the tailings, though not settled on as of yet, would be somewhere in the 0.30 to 0.40 cents on the dollar range. Clearly something we can work with considering the large scope of supply.

 

We are being courted by Mining Investment Groups

During the past year Gold Horizons Mining has been contacted by several financial groups from around the world with a clear desire to secure commitments from our mine to exclusively buy our gold output. One group in Dubai representing the largest gold refinery in the UAE has been extremely keen and persistent on locking up an exclusive contract for our entire output. I have been in discussions with them this past week whilst their senior representatives are in Madrid and expect to formalize a relationship that may include both exclusive rights on our product as well as direct investment in our project. Stay tuned for more on this in the next week .

 Below are some photos photos showing the near completion of our new laboratory installation and onsite offices. This is a very exciting and motivational time in the company's history and I am proud and extremely encouraged by the rapid progress in a wide range of activities that the company is making.

Sincerely, Scott J. Francis

Gold Horizons Mining Co. Ltd.

Chief Executive Officer


 

February 7th, 2014

Dear Shareholders

As highlighted in our previous shareholder letter we are in the exciting position of waiting on firm communications from a variety of interested professional investors and finance groups all of whom have been courting Gold Horizons Mining (GHM) with a view to exclusively buying our entire gold output.

24 hours is a long time in the mining business and I can now report that we have indeed received a “Letter of Intent” from an attorney in Madrid, Spain representing a highly credited investor group out of Dubai, United Arab Emirates.

 Scott has been in discussions with representatives of this group over the past few months. Their intention was to negotiate and purchase total exclusivity of all the gold and mineral from our mine as we process it.

The Letter of Intent came in this afternoon and is included with this letter albeit in Spanish but it can be translated via "Google translate" by copying and pasting. Of course when you use this tool it doesn’t perform a fluid translation but all the same it’s easy to get the meat off the bone, so to speak.

 Here's a basic, quick translation:

 The attorney JESUS ALVAREZ SAAVEDRA ABOGADO

 “Acknowledges after several meetings and discussions with Mr. Scott Francis that a firm offer has been made by an investment group who will be named later. This group has initially offered $500,000.00 USD plus whatever the negotiated cost of all the gold and mineral derived from our project is. They want exclusivity on all the gold and mineral mined. If we are interested in pursuing a negotiation the attorney will forward all relevant data as well as the name of the group.”

 Scott is signing off on the offer and has plans to be meeting this investor group in Peru in the coming weeks. He will negotiate a standard discount on the prevailing spot gold price on any given day. Having our mineral presold will dramatically cut cost as GHM will not require the security concerns of taking the processed mineral to market as well as negating the time and expense involved in delivery to auction.

Sincerely, Scott J. Francis

Gold Horizons Mining Co. Ltd.

Chief Executive Officer

RAFAEL REQUENAFALIN-13029(61)-3.jpg

February 6th, 2014

Dear Shareholders,

Construction of the processing plant laboratory is underway. We expect to have it completed in the next 10 days. The laboratory on site will streamline the time and expense of running samples of the mineral back and forth daily to the laboratory in the city of Arequipa. As I have indicated previously in order to offer our highly profitable processing services to local mines we must have the ability to test the samples prior to pre-purchasing the mineral from the miners. Having a laboratory on site achieves this goal.

Construction of an onsite office and sleep facility is underway at the mine and will also be completed in the next 10 days. This will allow GHM to meet with vendors on site as well as providing management, consultants and crew sleeping quarters on site cutting down the travel time from the city to the mine significantly.

Also view todays press release by clicking on link:

http://finance.yahoo.com/news/gold-horizons-mining-operations-moving-160602019.html

SincerelyScott J. Francis

Gold Horizons Mining Co. Ltd.

Chief Executive Officer

 

Click on Image below to see more images


 

October 16th, 2013

Click on Video to see plant operating 

Yuromayo Plant processes its first mineral!

To all of Gold Horizons Mining’s esteemed shareholders

I’d like to personally thank you for your patience and investment in the company and share with you the progress and great strides we have made this past year.

In November 2012 we broke ground on the Yuromayo processing plant. I am pleased to report the first 50-ton per day circuit has been completed. The operation is now running 24 hours a day, seven days a week and will continue doing so right through the expansion that will see the plant process 300 tons per day. We are currently processing 300 tons of mineral from our own Gloria mine. Our purpose here is two-fold. We are not merely processing the mineral to sell on the market; we are in fact monitoring the process to ensure it works efficiently assuring a minimum mineral recovery rate of 85%. We expect to harvest a few kilos of gold from this mineral. Depending on the concentration of gold here and once the plant is operating at maximum capacity, we expect to produce 8 to 20 kilos of gold per month.

As I drove to the plant last Saturday night and entered our private canyon I saw the plant lights glowing from a distance against the dark night sky, I could hear the humming of the mills churning away at the mineral and for the very first time felt a tremendous excitement well up inside of me. I felt such satisfaction in knowing that this endeavor was beginning to show the unmistakable signs of SUCCESS.

I will not mislead you; it has been very challenging to say the least!  I have been living in Peru for 19 months, relentlessly pushing forward on this project. During that time I have not once gone back to visit my home, family or friends and I have no plans to do so until I see this both the mine and the processing facility running at 100% capacity.

The hard work is about to payoff, but it is still too early to celebrate, as we have not yet begun selling gold daily in the marketplace. The Yuromayo plant itself will generate an operating profit of $900,000 per annum at present capacity. Fast forward to 200 tons per day it will net an operating profit eclipsing $5,000,000 per annum.

Numerous mineral samples have been reported as can be seen in the link below.

(http://goldhorizonsmining.com/assays/)

These assay results have exceeded expectations.

Why I am so excited about our processing plant!

Had I known two years ago what I know now, I would have focused on the processing plant first and then developed the Gloria mine. There are a few dynamics at play here, which have in fact created a perfect storm for Gold Horizons Mining.

Location

Our processing plant is the first commercial plant in the Arequipa region. Our nearest competitors are several hundred kilometers away, on the coast in Chala.  Arequipa is located between the Andes and the coast, nestled in the foothills of the Andes.  Just above Arequipa, in the highlands are the very rich gold producing areas such as Puno, Juliana, and Cusco.  As far as I can discern, there are no commercial processing plants in the highlands and these mines have few options but to transport their mineral to Chala for processing. The freight costs are an expensive proposition. Strategically located in between the mines and the Chala plants our processing plant is only 5 kilometers from the Pan American Highway. This provides us with a competitive advantage over the Chala plants who still employ expensive diesel operated generators as a power source as opposed to ours having the electric grid 1.5 kilometers away. We are currently in the process of connecting to the grid. These factors have had immediate effect as we are currently working with and negotiating with several mines and mining communities in the area. 

To date we have signed a half dozen letters of intent with mines in the aforementioned areas. The mineral concentrations from these mines are very rich.  2 to 5 ounces of gold per ton is typical in this region. Our fee to process this mineral increases as gold concentrations increase.  For example we charge over $350 per ton for mineral that has 2 ounces of gold/ton.  These rich concentrations of gold increase our profit margins several hundred percent.

The Peruvian Government cracks down on informal miners.

The government estimates 20% to 30% of Peru’s yearly gold production is produced by informal miners. The government has been cracking down on these informal miners for the past year and is determined to bring them into the system where they can be regulated and more importantly taxed. Several hundred tons of gold each year slip through the cracks and are being sold without the government getting it share of tax revenues.  The party is over.  Gold Horizons Mining has positioned itself ideally to assist these informal miners providing them with cost effective solutions to this new regulatory environment.

Another factor worth mentioning is that most of the informal miners (were/are) using illegal methods (mercury) to process their mineral. The Peruvian government has come down hard on this environmental time bomb. Because of the difficulties the informal minors must now navigate combined with our positioning and standing, we are able to purchase their mineral at a considerable discount to market and still be more cost effective than our competitors.

The Peruvian Government allies itself with processors to regulate mining industry.

It has become apparent of late that the Peruvian government is working with legal processing entities like our Yuromayo plant to better regulate the industry concerning mercury pollution generated by informal miners attempts at processing their own mineral and tax collection. The informal mining community has taken notice and this of course is of great benefit to our bottom line.

Previous Rights Offering

Earlier this year Gold Horizons Mining conducted a rights offering with its shareholders to raise funds to construct the Yuromayo processing plant as well as fund operations at the Gloria Mine facility. As you can clearly see in the link below, the funds were not spent frivolously but were put to effective use. There is no doubt the rights offering was value added to the company.

The funds received were put to work to construct the plant as well as continue developing the Gloria mine in anticipation of the plant beginning operations.

 

photo gallery of processing plant construction - click here

The majority of the funds raised were earmarked in the following way.

  • Purchasing the property for the plant
  • Building an access road (a few kilometers) from the highway to the property
  • Constructing the concrete foundation and retaining walls
  • Transporting the tanks and mills to the plant
  • Building the two ore bins
  • Purchasing all the electrical motors and steel balls for the mills
  • Hiring MBM Mining SAC to complete the fabrication and installation of the electrical motors
  • Hiring electrician to fully wire the plant
  • Purchasing two generators, 80 kw Caterpillar and 325 kw
  • Support mining and processing plant monthly operations and payrolls

In light of the success of the previous rights offering we recognize that we still have work to do.

What you may or may not be aware of in the mining business is that mining operations that don’t have their own processing facility must transport their mineral to a facility. Logically they wouldn’t have it processed then pay the costs to have the mineral disposed of and then pay a security company to ship the gold to market for sale. What actually occurs is that they sell their mineral at a discount to market to the processor. In our case the Yuromayo plant.

To take part in this very lucrative enterprise two components become necessary. The processing facility must have the onsite ability to test a broad sample of the mineral delivered to it to assess the concentration of gold in the mineral. Secondly and no less important the processing facility must have the cash flow to purchase the mineral from the miner.

Rights Offering

Gold Horizons Mining is now offering a second Rights Offering and is seeking to raise an additional 700,000 euros to be used for the following. 

  • Resume mining operations in both the Blanca shaft and the Julia Vein. 

Now that the Yuromayo plant is operating, a steady flow of 50 tons per day of mineral is required to keep the plant at capacity.

  • Payroll, explosives, and the purchase of some additional mining equipment we estimate will have us producing 50 tons per day within 120 days thereby completely satisfying the daily mineral needs of the Yuromayo Processing Plant.

Although operations at the Yuromayo Plant have begun we still need to complete the plant to bring it to full capacity of 300 tons/day. 

  • This includes completing the construction of the onsite laboratory and installing the lab equipment.  Currently we are working with an offsite lab in Arequipa to provide us daily analysis of our mineral in process.  This is costly, time consuming, and inefficient. 

Let me explain.  Our processing plant operates continuously, meaning that the plant is always adding new mineral to the reaction at the same pace as it discharges the processed mineral.  This requires constant sampling and analysis of the mineral being processed to insure that we are not discharging precious gold into the tailings pond.  

Currently the turn around time for our samples to be analyzed from the outside lab, which is 1.5 hours away from the plant, is eight hours.  Further more it is costly to be sending these samples everyday but until our onsite lab is completed we have no choice. Fuel and water make up approximately 60% of our processing plant cost.  In summary in we are holding the mineral in the agitation tanks for up to eight hours longer than necessary due to not having a lab nearby which increases our processing costs.

In addition to completing the lab we also have to pay within 3 to 4 days for the mineral we process from the local surrounding mines.  However we do not get paid until we have processed and sold the gold to a local mineral buyer and this takes several weeks before they issue the company a check.  In Peru credit and invoicing is NOT on a 60 or 90-day cycle.  Our accounts need to be zeroed out on a bi monthly basis.   Given the need to pay within 3 days for the mineral combined with paying our water and fuel bills bi monthly a processing plant needs to have plenty of cash on hand to pay its bills immediately.

While we have several letters of intent with surrounding mines, my experience has taught me that business is about good relationships and that does not happen overnight.

The mining business requires heavy front-end investment but offers tremendous reward. One place where we have a distinct advantage is that Gold Horizons Mining in only three years is up and operating. Anyone familiar with the mining sector can attest to the fact most start-ups haven’t even broken ground by year 5.

With geological reports, feasibility studies and test drilling, even a property that has the proven goods is about 7 years away prior to actually beginning exploration.

For the next 4 weeks beginning October 15, 2013 the company will be offering a 2nd rights offering on a first come first serve basis. Shares will be offered to shareholders of record only at a discounted price of 0.85 (eighty-five euro cents) per share will be included for each share purchased. The warrants expire December 31, 2014. The funds raised from the rights offering will be used to bridge the gap between keeping the plant funded while it operates until it has received the proceeds from selling the gold impregnated carbon to a local mineral buyer as the company has done in the past. 

Contact Michael at ir@goldhorizonsmining.com to place your order.

Thank you once again for your investment in Gold Horizons. I believe strongly that your investment in Gold Horizons Mining will pay off handsomely. I am here to make sure this happens.

Sincerely,

Scott J. Francis

Gold Horizons Mining Co. Ltd.

Chief Executive Officer