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Horizonte Minerals highlights significant progress at Araguaia project

The firm said it has completed a value engineering phase at the Brazilian nickel project to optimise operational performance, while capital and operational expenditure remain in line with a feasibility study following a comprehensive review

Horizonte Minerals PLC - Horizonte Minerals highlights significant progress at Araguaia project

Horizonte Minerals PLC (LON:HZM) said it has made “significant progress” with key workstreams required to commence construction at its Araguaia nickel project in Brazil.

In an operational update, the AIM-listed firm said it has completed a value engineering phase at the project with improvements made to plant design and flow sheet to optimise operational performance, while capital and operational expenditure remain in line with a feasibility study following a comprehensive review.

READ: Horizonte Minerals says it is well funded to advance Araguaia project towards construction

Horizonte also said an operational readiness plan is “well advanced” with all key permits in place for commencement of the construction phase while key environmental and social programmes are underway in preparation for this stage.

Meanwhile, the company said the project finance process is continuing to progress with several key milestones delivered and that it is also building out operational and corporate teams to support the transition to construction.

Horizonte also highlighted that nickel is currently trading at around US$16,300 per tonne compared to the Araguaia base case modelled at US$14,000, resulting in what it said were “enhanced project economics”.

"Horizonte has made significant progress with the key workstreams required to commence construction at Araguaia, despite the challenges posed by the Covid-19 pandemic over the last 10 months”, Horizonte chief executive Jeremy Martin said in a statement.

“We continue to engage with a number of prospective investors, have recently negotiated a non-binding, term sheet with a major cornerstone equity investor, have reached an advanced stage with offtake agreements, received initial approval for a financing facility of up to [US$32mln] from Banco da Amazônia and are advancing workstreams with a syndicate of five international banks for the principal project finance package ... In parallel, we have spent the past eight months undertaking a phase of value engineering to upgrade the Feasibility Study completed in 2018 and optimise certain aspects of the project to a level where it is implementation ready.  This work has included development of a detailed Project Execution and Operational Readiness Plan”, he added.

The CEO continued: “These workstreams have further de-risked the project and give us clear visibility on how we will deliver a successful, tier-one nickel project. Critical to the project's delivery is the growth of our teams. The high calibre of the individuals we have been able to attract is testament to the quality of our projects, the growth trajectory of the company, and the culture of best practice that we have worked hard to develop over many years of operating in Brazil.”

Shares in Horizonte were 4.5% lower at 6.6p in early deals on Friday.

Quick facts: Horizonte Minerals PLC

Price: 7.6399 GBX

AIM:HZM
Market: AIM
Market Cap: £123.16 m
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