Horizonte Minerals Plc, (AIM: HZM, TSX:
HZM) ('Horizonte' or 'the Company') the
nickel development company focused in Brazil, is pleased to provide
an update on its operations covering its 100% owned flagship
Araguaia nickel project ('Araguaia'). Horizonte is a multi-asset
company focused on its objective of becoming a nickel producer.
Highlights
- Final results of the Araguaia 43-101 Feasibility Study (‘FS’)
are being prepared and expected to be announced to the market in
October 2018;
- Optimisation around the plant layout, engineering design and
process flow sheet now complete and resulting in considerable
opportunities;
- Plant design has been modified to accommodate the potential
expansion of a second Rotary Kiln Electric Furnace ('RKEF') process
line in the future after the first line is fully commissioned,
providing flexibility to double the output of the
operation;
- Final Araguaia capex estimate is currently being prepared for
internal review;
- Water permit has been obtained for full-scale operation at
Araguaia;
- Brazil’s environment agency (SEMAS) visited Araguaia in late
July 2018, a key part of construction licence approval process;
and,
- Company cash position of £8.9 million as at 30 June 2018.
Horizonte CEO, Jeremy Martin,
commented:
“I am pleased to provide an operational update
on our progress on a number of key workstreams as we move towards
completion of the Feasibility Study on our 100% owned Araguaia
nickel project, representing an important milestone in the
transition of the Company from an explorer to a developer. There
has been a considerable amount of work involved in the optimisation
of the plant layout and design where we have been able to
successfully reduce the overall plant footprint, close-couple the
equipment packages leading to a reduction in the overall material
quantities (cut and fill material, concrete and steelwork).
Additionally, we have now designed the plant in such a way to allow
the potential to include a second RKEF process line in the future
allowing for an increase in the annual nickel production.
“As the various feasibility workstreams are
coming together, we have also been working hard on the social,
infrastructure and licensing aspects of the project that will allow
us to move to the development stage in 2019.
“From a markets perspective, recent talk of
tariff related barriers has negatively affected the prices of a
number of commodities during the last couple of months. However,
the nickel price, given its strong fundamentals, has been more
resilient in relation to the wider metals market. LME inventories
continue to be drawn down and the demand side driven by the
stainless-steel market and EV battery sector continues to show
strong growth, this bodes well for the longer-term fundamentals of
nickel.
“The Company has a strong cash position to allow
us to deliver the key milestones going forward. It is an exciting
time for the Company and we look forward to updating the market on
the Company’s developments as we move through the next phase of
development at Araguaia, in addition to providing updates on the
Vermelho Ni-Co project.”
Araguaia Nickel Project Feasibility
Study Update
The FS for Araguaia is designed around an open
pit mining operation targeting 900,000 tonnes per annum of ore
feeding a central processing RKEF smelting facility, and designed
to produce 14,500 tonnes of nickel per annum contained in 52,000
tonnes of ferronickel.
The current mineral reserve supports a 28-year
mine life with a two-year construction period. Work on the ground
is nearing completion, with the following work streams either in
near final form or complete:
The FS results are expected to be available for
announcement to the market in October 2018.
Geology and Mining
Snowden Mining Industry Consultants ('Snowden'),
who are conducting the geology and mining sections of the study,
have optimised the mine plan and schedule such that the study will
be in a position to publish mineral reserves sufficient for more
than 25 years of mine life. Snowden has also completed an update of
the mining costs with respect to the latest economic conditions in
Brazil.
In addition, further geotechnical work has been
completed that supports the study and the detailed engineering.
Infrastructure and Process
As previously reported, the de-risked RKEF
technology will be deployed and detailed engineering work has been
completed for the plant. The Plant design has been optimised and
modified to accommodate a second RKEF process line in the future
after the first line is fully commissioned, providing flexibility
to double the output of the plant and increasing overall
revenue.
The higher cost equipment items are being
sourced from suitably qualified engineering firms around the world
in a bid to identify high quality, cost-effective vendors. A
detailed operating cost and capital cost estimate is well advanced
with the updated plant layout and the selected large equipment
items.
Detailed designs for roads, the powerline, river
abstraction and a cooling dam have been complete and costed. This
includes detailed surveys of the various routes, and development of
early works packages with firm quotations from vendors for
construction.
All logistics challenges have been identified
and engineered including those around sourcing of coal, energy and
consumables, which have been costed with quotations and proposals
from prospective vendors.
Significant effort has been expended on risk
management and risk mitigation that covers sovereign, climate,
logistics, geographical, and geological risk factors. This work has
resulted specific changes to designs, and operational plans so that
the project risks are minimised while still delivering tier 1
economics.
The Project implementation schedule is well
advanced, taking into account the updated engineering and current
operating regime in Brazil.
Financial
Operating ('OPEX') and capital cost ('CAPEX')
work for the FS is in the final stage. All CAPEX items have now
been received from equipment vendors together with material and
installation costs from Brazilian suppliers. Savings have also been
pursued by optimising plant layout as well as sourcing from
appropriate vendors.
Social & Environmental
Status
The company is on track with its programme of
licence applications and approvals for and construction permit
requests for a number of key environmental and regulatory parts of
the overall project effectively de-risking the permitting component
of the project. Milestones in this area include:
- Successfully obtained the water permit for full-scale operation
of the Araguaia project;
- Submission of the Fauna and Flora inventories as well as the
vegetation suppression request in early 2018; and,
- In July, we welcomed a team from the environmental agency
(SEMAS) to the Araguaia project. This is an important step in the
process for the approval of the construction licence.
We have also signed an agreement, with SENAI’s
Institute of Innovation to research potential uses for Araguaia
slag. SENAI operates a network of 208 certified laboratories in the
country and this particular research has already commenced with
testing of slag produced from Araguaia’s pilot-plant process at the
SENAI Institution in Belem.
Agreement has also been reached with Brandt
Medio Ambiente consulting Llc. to undertake environment studies and
permitting for the energy Transmission Line. This commenced in June
2018.
Nickel and Cobalt Market
Developments
Nickel has continued its strong performance this
year rising to US$14,823 per tonne by the end of June, up 18% since
the start of the 2018. The average price for the period, at
US$14,465 per tonne, was also the highest quarterly average since
the three months to end December 2014.
Global demand for nickel has been reported to be
increasing by 7.3% this year, while supply rises 6.8% to 2.210
million tonnes1. Analysts in the sector have also stated this year
that they expect the global nickel market deficit to widen to
88,000 tonnes, from 72,000 tonnes in 2017.
Of significance for the Company is that long
term analyst forecasts are pricing nickel above the current levels.
These forecasts are being driven by both traditional uses for
nickel in stainless steel, as well as the new drivers; super-alloys
and the battery sectors.
This bodes well for Horizonte as we look to
benefit from the growth in both end markets, through the
development of the advanced stage Araguaia ferronickel project and
the Vermelho nickel-cobalt project, which was acquired in December
2017.
This announcement contains inside information
for the purposes of Article 7 of EU Regulation 596/2014.
For further information visit
www.horizonteminerals.com or contact:
Horizonte Minerals plc |
|
Jeremy Martin (CEO) |
+44
(0) 20 7763 7157 |
|
|
Numis Securities Ltd (NOMAD & Joint
Broker) |
|
John
Prior / Paul Gillam |
+44
(0) 207 260 1000 |
|
|
Shard Capital (Joint Broker) |
|
Damon
Heath / Erik Woolgar |
+44
(0) 20 7186 9952 |
|
|
Tavistock (Financial PR) |
|
Jos
Simson / Gareth Tredway / Barney Hayward |
+44
(0) 20 7920 3150 |
About Horizonte Minerals:
Horizonte Minerals plc is an AIM and TSX-listed
nickel development focused in Brazil. The Company is developing the
Araguaia Project as the next major ferronickel mine in
Brazil. With the Vermelho nickel-cobalt project being
advanced with the aim of being able to supply nickel and cobalt to
the EV battery market. Both projects are 100% owned.
Horizonte shareholders include; Teck Resources
Limited, Canaccord Genuity Group, JP Morgan, Lombard Odier Asset
Management (Europe) Limited, City Financial, Richard Griffiths and
Glencore.
CAUTIONARY STATEMENT REGARDING FORWARD
LOOKING INFORMATIONExcept for statements of historical
fact relating to the Company, certain information contained in this
press release constitutes "forward-looking information" under
Canadian securities legislation. Forward-looking information
includes, but is not limited to, the ability of the Company to
complete the Acquisition as described herein, statements with
respect to the potential of the Company's current or future
property mineral projects; the success of exploration and mining
activities; cost and timing of future exploration, production and
development; the estimation of mineral resources and reserves and
the ability of the Company to achieve its goals in respect of
growing its mineral resources; the ability of the Company to
complete the Placing as described herein, and the realization of
mineral resource and reserve estimates. Generally, forward-looking
information can be identified by the use of forward-looking
terminology such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes",
or variations of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "might" or
"will be taken", "occur" or "be achieved". Forward-looking
information is based on the reasonable assumptions, estimates,
analysis and opinions of management made in light of its experience
and its perception of trends, current conditions and expected
developments, as well as other factors that management believes to
be relevant and reasonable in the circumstances at the date that
such statements are made, and are inherently subject to known and
unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of
the Company to be materially different from those expressed or
implied by such forward-looking information, including but not
limited to risks related to: the inability of the Company to
complete the Acquisition as described herein, exploration and
mining risks, competition from competitors with greater capital;
the Company's lack of experience with respect to development-stage
mining operations; fluctuations in metal prices; uninsured risks;
environmental and other regulatory requirements; exploration,
mining and other licences; the Company's future payment
obligations; potential disputes with respect to the Company's title
to, and the area of, its mining concessions; the Company's
dependence on its ability to obtain sufficient financing in the
future; the Company's dependence on its relationships with third
parties; the Company's joint ventures; the potential of currency
fluctuations and political or economic instability in
countries in which the Company operates; currency exchange
fluctuations; the Company's ability to manage its growth
effectively; the trading market for the ordinary shares of the
Company; uncertainty with respect to the Company's plans to
continue to develop its operations and new projects; the Company's
dependence on key personnel; possible conflicts of interest of
directors and officers of the Company, the inability of the Company
to complete the Placing on the terms as described herein, and
various risks associated with the legal and regulatory framework
within which the Company operates. Although management of the
Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements.
1 Source: Japan’s Sumitomo Metal,
https://www.reuters.com/article/sumitomo-mtl-min-nickel/japans-sumitomo-metal-says-global-nickel-deficit-to-widen-this-year-idUSL4N1TG3WV
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