Horizonte Minerals buys Glencore's Brazil nickel project for $8m

Horizonte Minerals has reached an agreement to acquire Glencore’s Araguaia nickel project in north central Brazil for $8m (£5.2m).

Horizonte said the combination of Glencore’s nickel project with its own high-grade nickel project in Araguaia will create one of the world’s largest nickel saprolite projects in terms of size and grade.

The Brazil-focused nickel development company said it will pay £2m up front through the issue of Horizonte shares to Glencore, which is selling the project as part of its plan to dispose of non-core assets to pay down debt.

Horizonte’s chief executive officer Jeremy Martin said: “This is a game-changing transaction for Horizonte. We have been able to negotiate a unique transaction leveraging the current depressed commodity markets.

“The consolidation of the Araguaia district is a major achievement for Horizonte. The Enlarged Project is ideally placed in the commodity cycle to be advanced with the aim of commencing production within the next five years when the supply/demand fundamentals for nickel are expected to be more favourable.”

In addition, Horizonte said it has raised £1.55m via the placement of new shares with key cornerstone shareholders, which will be used to develop the enlarged Araguaia project.

At 1041 BST, Horizonte Minerals shares were up 5.5% at 1.64p. while Glencore shares were down 16% at 82p, hit by a downbeat broker note.