Horizonte Minerals (AIM:HZM) intends to reduce construction activities at Araguaia

Horizonte Minerals Plc (AIM/TSX: HZM), a company specializing in nickel development, has announced its ongoing collaboration with senior lenders and key investors to secure financing for its Araguaia Nickel Project.

This follows the announcement made on October 2, 2023, and is being conducted alongside the review of the project’s capital costs and schedule.

In an effort to efficiently utilize resources and funds during negotiations with principal shareholders and lenders, Horizonte intends to scale back construction activities at Araguaia. The company will prioritize essential operations while maintaining a strong commitment to safety.

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As of November 10, 2023, the Araguaia Project reported total available funds of US$169 million. This includes US$131 million yet to be drawn from the Senior Debt Facility, contingent on meeting certain conditions, and a cash reserve of US$38 million. This funding is expected to support operations until mid-December 2023, with the potential for extension to late Q1 2024, subject to successful discussions with suppliers, implementation of cost-saving strategies, or securing additional financing.

Over the past week, Horizonte has facilitated site visits for major shareholders and lender representatives, who are conducting due diligence as part of the funding process. The completion of their internal reviews is anticipated in early Q1 2024, with funding expected to be finalized by the end of Q1 2024. The company aims to secure financing that meets the project’s completion costs, allowing continued access to the Senior Debt Facility.

CEO Jeremy Martin commented, “We are making headway in our discussions with major shareholders and lenders regarding the project’s funding.

While these talks are underway, we are concentrating our financial and human resources on crucial tasks. Our goal is to be ready to fully resume construction activities once funding is secured, benefiting both stakeholders and the community. Despite the anticipated increase in capital, the Araguaia project remains a top-tier nickel venture, expected to produce high-quality, cost-effective, low-impurity FeNi over a 28-year mine life.”

The commencement of production at Araguaia is dependent on the outcome of these funding discussions. Horizonte will continue to provide updates on its financing progress as necessary.

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