Proactive Investors - Run By Investors For Investors

Feasibility study for Horizonte’s Araguaia nickel project anticipates US$1.6bn in cash flows over the life of mine

The study shows Araguaia generates robust returns at current nickel prices
Feasibility study for Horizonte’s Araguaia nickel project anticipates US$1.6bn in cash flows over the life of mine
Araguaia will produce 14,500 tonnes of nickel per year

Horizonte Minerals Plc (LON:HZM) has revealed the results of a feasibility study at the Araguaia nickel project in Brazil's Pará State.

The study shows that over a 28-year mine life Araguaia will generate US$1.6bn in cash flows, with the potential to go even beyond that.

READ: Horizonte Minerals says completing aero survey for power line to Araguaia is ‘another big milestone’

The feasibility study worked to a design that allows for future construction of a second rotary kiln electric furnace process line, with the potential to double production capacity from 14,500 tonnes per year nickel up to 29,000 tonnes.

The study showed Araguaia to have a post-tax net present value of US$401mln and an internal rate of return of 20.1%.

 Cash costs are expected to be US$3.72 per pound of nickel, or US$8,193 per tonne, making Araguaia a low-cost producer.

If the market consensus mid-term nickel price of US$16,800 per tonne is used in the modelling then the post-tax NPV increases to US$740 million, and the IRR to 28.1%.

The capital cost estimate stands at US$443mln, including US$65.3mln of contingencies.  

The outlook for the nickel market is robust, with demand growing at around 5% over the next three to five years from both the traditional stainless-steel sector as well as new demand from growth in the electric vehicle battery market.

 

 

View full HZM profile View Profile

Horizonte Minerals PLC Timeline

Related Articles

Araguaia mine
Fri
Broker share price targets range from 8p to 21p per share
1542615822_nickel.jpg
November 19 2018
Amur has already delineated a substantial resource at Kun-Manie
1542052159_handshake--bus.jpg
November 12 2018
Tantalex is focused on the exploration and development of lithium, cobalt, tantalum properties in Africa
Copyright © Proactiveinvestors.com, 2019. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use