The house broker forecasts potential for underlying earnings (EBITDA) to reach nearly £90mln by 2025.
With the recently announced US$325mln senior debt facility, the nickel developer is expected to start production at Brazil’s Araguaia by 2023, with sales aimed at the growth-oriented stainless steel sector.
Meanwhile, the Vermelho project, also in Brazil, is forecast to produce 24,000 tonnes of nickel and 1,300 tonnes of cobalt in sulphate for consumption by the electric vehicle (EV) end market.
Demand growth for EVs is forecast to far exceed that of the stainless steel industry, the broker said.
“We see HZM as a medium risk, but strong growth prospect for greater exposure to nickel and (eventually) cobalt,” analysts commented.
“We expect further announcements on Araguaia Stage 1 funding in the coming six months, and also expect further nickel price momentum in the coming two years. Araguaia’s strong cash flow profile from Stage 1 should enable HZM to self-fund Stage 2 by Years 3-4 of production.”
Shares in Horizonte were trading 4% higher at 7.42p on Monday morning.