Horizonte Minerals PLC Update on Araguaia Nickel Project Construction (2643O)
October 02 2023 - 1:00AM
UK Regulatory
TIDMHZM
RNS Number : 2643O
Horizonte Minerals PLC
02 October 2023
NEWS RELEASE
2 October 2023
HORIZONTE MINERALS PROVIDES UPDATE ON ITS ARAGUAIA NICKEL
PROJECT CONSTRUCTION
Horizonte Minerals Plc (AIM/TSX: HZM) ("Horizonte" or the
"Company"), the nickel company developing two Tier 1 assets in
Brazil, announces today that it has made good progress in
completing the final detailed engineering and construction design
for Line 1 of its 100%-owned Araguaia Nickel Project ("Araguaia" or
"the Project"). This work, along with a comprehensive cost review,
has resulted in changes to the design and execution scope, which
are expected to increase the overall capital expenditure
requirement by at least 35% (of current capex budget) and delay
first production to Q3-2024.
Given the progress made to date with construction, the value of
the Araguaia Line 1 Project and the upcoming delivery of the
Feasibility Study on Araguaia Line 2, the Company continues to have
strong support from its major partners. The Company is working on a
plan with its various financial institutions together with the
cornerstone shareholders for a financing solution to complete
construction.
Construction work on site continues to progress well with all
key engineering drawings issued for construction. Ore stockpiling
activities commenced last quarter, and ROM build-up is progressing
to schedule. The rotary dryer is now in place, with all shells
aligned for final welding. Construction of the 126km, 230kV
transmission line is well advanced, with all pylons erected and
118km of conductor cable installed. Construction of the water
storage reservoir is also well advanced, with the initial sections
of the water abstraction pipeline positioned and foundations poured
for the river abstraction pump station.
To de-risk the operation, the final detailed engineering work
has added additional scope items linked to the major equipment
packages, made several enhanced design changes from the original
engineering study (including changes to the water abstraction
pipeline design and water storage reservoir), and has identified
the requirement for additional civil works and quantities.
Additionally, changes have been required with selected suppliers
who have not been able to deliver to the project timeframe, which
has added further cost pressures.
Accordingly, the Company engaged Reta Engenharia to undertake an
independent review of the remaining capital expenditure and
schedule, incorporating the change in scope, material and quantity
variations, increased project duration to first metal and
associated costs, and additional working capital requirements. The
Company has also undertaken a detailed review of the ramp up and
operational costs. The Company expects to publish an update by mid
Q4-2023 once this review is complete.
The results from the Feasibility Study on Araguaia Line 2 remain
on track to be published in Q4-2023. The combined production of
Araguaia Line 1 and 2 is expected to be 29,000 tonnes per
annum.
Jeremy Martin, CEO of Horizonte, commented:
"We continue to make solid progress with construction at
Araguaia Line 1 and are confident that the Project is now
significantly de-risked given the near-finalization of detailed
engineering and procurement, together with the detailed review of
the costs to project completion, ensuring successful delivery.
Despite the anticipated higher capital requirement, Araguaia
remains a Tier 1 asset that will deliver strong margins over its
28-year mine life once production commences next year. Moreover,
the imminent completion of the Feasibility Study on Line 2 will
demonstrate Araguaia's capacity to support an annual production of
29,000 tonnes per annum.
We appreciate the strong support provided by both local
stakeholders and cornerstone shareholders, as we work towards a
financing solution to complete construction."
Further updates will be provided in due course. This
announcement contains inside information for the purposes of
Article 7 of EU Regulation 596/2014, as retained in the UK pursuant
to the European Union (Withdrawal) Act 2018.
For further information, visit www.horizonteminerals.com or
contact:
Horizonte Minerals plc info@horizonteminerals.com
Jeremy Martin (CEO) +44 (0) 203 356 2901
Simon Retter (CFO)
Patrick Chambers (Head of IR)
Peel Hunt LLP (Nominated Adviser
& Joint Broker)
Ross Allister
Bhavesh Patel +44 (0)20 7418 8900
---------------------------
BMO (Joint Broker)
Thomas Rider
Pascal Lussier Duquette
Andrew Cameron +44 (0) 20 7236 1010
---------------------------
Barclays (Joint Broker)
Philip Lindop
Richard Bassingthwaighte +44 (0)20 7623 2323
---------------------------
Tavistock (Financial PR)
Jos Simson
Cath Drummond +44 (0) 20 7920 3150
---------------------------
ABOUT HORIZONTE MINERALS
Horizonte Minerals Plc (AIM/TSX: HZM) is developing two
100%-owned, Tier 1 projects in Pará state, Brazil - the Araguaia
Nickel Project and the Vermelho Nickel-Cobalt Project. Both
projects are high-grade, low-cost, with low carbon emission
intensities and are scalable . Araguaia is under construction and
when fully ramped up with Line 1 and Line 2, is forecast to produce
29,000 tonnes of nickel per year. Vermelho is at feasibility study
stage and is expected to produce 24,000 tonnes of nickel and 1,250
tonnes of cobalt to supply the EV battery market. Horizonte's
combined production profile of over 60,000 tonnes of nickel per
year positions the Company as a globally significant nickel
producer. Horizonte's top three shareholders are La Mancha
Investments S.à r.l., Glencore Plc and Orion Resource Partners
LLP.
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