Horizonte Minerals awarded power line licence for Araguaia Project

Francesca Morgan
Vox Newswire
10:27, 25th February 2021

Horizonte Minerals (HZM FOLLOW) said it has been awarded the construction licence package for the development of the power line for its 100% owned Araguaia Ferronickel Project.  

The Araguaia project is a high grade, low cost, long life asset located south of the Carajàs Mining District, north east Brazil. To date, the Company’s feasibility study has demonstrated robust economics with the Stage 1 process plant producing 14,500 tonnes of nickel per year. 

The approved package, granted by the Pará State Environmental Agency, Secretaria de Meio Ambiente e Sustentabilidade ('SEMAS'). includes the preliminary licence (Licença Prévia), the construction licence (Licença de Instalação), and the related fauna and flora licences.  

The Brazil-focused nickel firm said the package will allow it to implement a 120km, 230KV power line, and respective substation. The power line will connect Araguaia to the national power grid and will cover the full power requirement for the Project at nameplate capacity. 

“Araguaia is already fully permitted to start construction. The award of the power licence package is a critical step in our path to production, and further de-risks the Project by securing the full power requirement for commercial operation,” said CEO, Jeremy Martin. 

He added, “The power supply will be hydroelectric which is a key factor in the ability to produce a low CO2 per tonne of product, in line with other Brazilian ferronickel producers, placing Araguaia in the lowest half of carbon emitters globally for nickel production.” 

Shares in Horizonte Minerals have risen by over 10% in value since the start of the year. The stock was trading 1.90% higher this morning at 8.05p following the announcement. 

HZM price chart

Last week, Horizonte successfully completed a share placing as part of a c.£18 million fundraise which will help advance the Araguaia ferronickel project into construction. 

The net proceeds of the fundraise will be used to initiate specific early works and advance long-lead time items linked to the start of construction of the Company’s wholly owned Araguaia ferro-nickel project in Brazil, as well as for general working capital purposes. 

Horizonte said it continues to make “good progress” on its financing process for Araguaia. The Group is currently arranging a senior secured project finance facility of up to US$325m with a syndicate of banks to part-fund the project’s construction and development. 

As Horizonte unveiled its fundraise, the London Metal Exchange’s three-month nickel price rose to a seven-year high on Thursday. The institution noted that positive macroeconomic sentiment and the return of Asian trading’ had acted as catalysts for base metals prices. 

That day, Nickel prices on the London Metal Exchange reached their highest point since September 2014 off the back of battery demand predictions in 2021 with the battery metal reaching $US 18,612 ($24,057) per tonne, the highest price since it hit $US 19,380 in 2014. 

According to mineral consultancy Roskill’s nickel outlook to 2030, nickel is predicted to recover through 2021 as COVID-19 vaccines roll out and stimulus packages materialise. 

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