Horizonte Minerals awarded construction licence for Araguaia project

Brazil-focussed nickel development company Horizonte Minerals has been awarded the construction licence for the development of its 100%-owned Araguaia Ferronickel Project, it announced on Monday.

The AIM-traded firm said the award of the construction licence - or ‘Licença de Instalação (LI) in Portuguese - was granted by SEMAS, the Brazilian Pará State Environmental Agency.

It said the granting of the LI provided it with the permits required to construct the Araguaia rotary kiln electric furnace (RKEF) processing plant and associated infrastructure.

The LI approval represented a “major de-risking” step for Araguaia, which was now fully permitted to commence construction.

Receipt of the permit followed release of the feasibility study (FS) results in October, and the filing of the 43-101 FS report on SEDAR in December.

“I am very pleased to announce the award of the construction licence (LI) for Araguaia as this is a major milestone for the company,” said Horizonte chief executive Jeremy Martin.

“Subject to funding, the company is now in a position to commence construction with the necessary environmental permits approved, including water abstraction permits issued in 2018 together with the newly issued LI.

“The LI allows development to commence on the RKEF process plant and associated infrastructure.”

Martin said the award of the LI was delivered on time and on budget, with the Horizonte team working closely with SEMAS, other state agencies and local communities.

“Consistent with our objective to provide long-term sustainable value for our shareholders, employees and communities, we developed integrated solutions focused on environmental protection, water efficiency and socio-economic development.

“The LI award follows on closely from the completion of the FS, demonstrating that Araguaia is a Tier 1 asset with the potential to be a low-cost supplier of nickel in the form of high-grade ferronickel to the stainless-steel industry.

“Over the initial 28-year mine life, Araguaia is expected to generate cash flows after taxation of $1.6bn and sits on the lower half of the global cost curve.”

The LI and FS results, combined with the positive fundamentals around the nickel market, positioned Horizonte well for 2019, with the construction-ready Araguaia project to supply the ferronickel market and Horizonte’s second project - the Vermelho nickel cobalt project - being advanced to supply the electric vehicle battery market, Jeremy Martin explained.

“We look forward to updating the market over the coming months, at what is an exciting time for the company.”