TIDMHZM
RNS Number : 9362X
Horizonte Minerals PLC
16 August 2018
NEWS RELEASE
16 August 2018
Q3 2018 ARAGUAIA OPERATIONAL UPDATE
16 August 2018 - Horizonte Minerals Plc, (AIM/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 GBP8.9 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 tonnes[1].
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.
* *S * *
For further information visit www.horizonteminerals.com or
contact:
Horizonte Minerals plc
+44 (0) 20 7763
Jeremy Martin (CEO) 7157
Numis Securities Ltd (NOMAD
& Joint Broker)
+44 (0) 207 260
John Prior / Paul Gillam 1000
Shard Capital (Joint Broker)
+44 (0) 20 7186
Damon Heath / Erik Woolgar 9952
Tavistock (Financial PR)
Jos Simson / Gareth Tredway +44 (0) 20 7920
/ Barney Hayward 3150
[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
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 INFORMATION
Except 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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