Trading in shares of the enlarged Horizonte Minerals (LON:HZM) began on AIM today following the company's acquisition of Teck Cominco Brasil from Teck Resources. Teck Cominco Brasil owns 100% of the advanced Araguaia nickel project in the Carajás mineral district of northern Brazil. Horizonte believe the combination of Teck's Araguaia project with Horizonte's Lontra project has the potential for a 100 million tonne resource with grades comparable to other world class projects in Brazil.
Chief executive Jeremy Martin said: "We are delighted that the acquisition has now been completed and that the enlarged group has commenced trading on AIM. The completion of this deal is a major milestone for the company, and marks the transformation of Horizonte into a leading exploration and development company in Brazil. The acquisition consolidates the Araguaia and Lontra nickel projects, creating the potential for a plus 100 million tonne resource with grades comparable to other world-class projects in northern Brazil, in an emerging new nickel district."
The purchase constituted a reverse takeover under AIM rules and involved a £5.13m cash raise in a share placing priced at 10p in order to fast-track the development of the combined nickel project as well as acquire the remaining 50% interest in the Lontra project not currently held by Horizonte. Separately, Horizonte has entered into a non-binding memorandum of understanding with one of its major shareholders, Anglo Pacific Group (LON:APF), which will see Horizonte accept US$0.5m in exchange for an option for Anglo Pacific to acquire a net smelter royalty (NSR) on production at Araguaia. The option is contingent on the completion of a positive, industry standard pre-feasibility study at Araguaia. If it takes up the option, Anglo Pacific would pay Horizonte a further US$12.5m and receive NSR at the rate of 1.5% of revenue on production at Araguaia up to 30,000 tonnes per annum, reduced by 0.02% for every 1,000 tonnes per annum above this rate. Above 50,000 tonnes per annum that rate will be 1.1% and fixed at this level.
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