REG - Horizonte Minerals - Araguaia remains on Schedule and on Budget

Horizonte MineralsAnnouncement

15/12/2022 07:00

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RNS Number : 7624J  Horizonte Minerals PLC  15 December 2022

NEWS
RELEASE

15 December 2022

 

CONSTRUCTION OF ARAGUAIA NICKEL PROJECT REMAINS ON SCHEDULE AND ON BUDGET

 

CONSTRUCTION HIGHLIGHTS:

 

·    Strong safety performance with zero lost time injuries ("LTI's")
after over 990,000 hours worked

·    Construction is on-schedule with overall project progress
approximately 28% complete

·    Construction is on-budget with approximately 75% of capital
expenditure, over US$415m, awarded to date

·    Conditions related to the Senior Debt facility have been satisfied
and first draw down has recently been completed

·    Ten-year renewable power contract secured at globally competitive
prices, providing a foundation for future production costs in the lowest
quartile globally

 

Horizonte Minerals Plc (AIM/TSX: HZM) ("Horizonte" or the "Company") reports
that it is continuing to make good progress on the construction of its
100%-owned Araguaia Nickel Project ("Araguaia" or "the Project") in Brazil
which remains on-budget and on-schedule to commence production in Q1-2024.

 

As of 30 November 2022, approximately 28% of the total Project construction
programme has been completed. Earthworks are significantly advanced and due to
be concluded in January 2023. The detailed engineering works are 87% complete
and due to be concluded during Q1 2023. Approximately 75% of capital
expenditure has been awarded to date, amounting to over US$415 million, and
the key long lead items are running to schedule with the furnace shell due on
site in late December and the rotary kiln due to be delivered in early Q1
2023.

 

Horizonte's Management will host a webinar on Thursday, 15 December 2022, at
10:00am GMT to discuss the construction progress. Investors and analysts are
invited to access the webinar by registering in advance through the following
link:
https://www.investormeetcompany.com/horizonte-minerals/register-investor.
Questions may be submitted at any time during the live presentation. A
recording of the webinar will be available on the Company's website.

 

Jeremy Martin, CEO of Horizonte, commented: "We are very pleased with the
construction progress achieved to date which places us in a strong position to
deliver the project on-budget and on-schedule, and most importantly with a
strong safety track record. We are also very pleased to have drawn from the
Senior Debt facility, a core part of the overall funding package of Araguaia.

 

"Araguaia is expected to bring significant social and economic benefits to our
host communities and local stakeholders and we were pleased to see our efforts
recognized at the Brazilian Association of Human Resources awards held, in
early December, by winning the ESG category for our local professional
training program - Transforming Horizons.

 

"Overall, it has been a transformational year for the Company and I would like
to thank our employees, contractors and key stakeholders for their strong
efforts thus far to progress Araguaia's construction. I firmly believe that
our collective efforts will enable us to quickly unlock significant value at
Araguaia as we move closer to producing first nickel."

 

 

 

CONSTRUCTION PROGRESS SUMMARY

 

Health and Safety

The lost-time injury frequency rate ("LTIFR") at Araguaia in October 31, 2022
was 0.00 and the total recordable injury frequency rate ("TRIFR") was 1.45
based on a 12-month rolling average, which are calculated per million hours
worked. We have continued our focus on embedding the critical risk controls
with our growing workforce and reinforcement of the Horizonte Golden Rules. To
complement these activities, we continued to implement tools to increase
involvement and participation by our contracting partners in our safety
systems and processes. Year to date over 1,600 internal safety audits have
been conducted and over 1,550 safety plan observations have been completed.

 

In the quarter, the Company conducted a campaign of occupational hygiene
monitoring where worker exposure to particulates, gases, noise and vibration
were monitored. These activities, combined with routine medical surveillance,
ensure that our workforce remain fit and healthy.

 

Construction activities

As seen in Figure 1, the reinforced primary crusher wall has now been
completed, the next stage is to contour and hydroseed the pad sides and
install the reinforced concrete base where the primary crusher will be
mounted.

 

Figure 1: Reinforced primary crusher wall completed.

 

As seen in Figure 2, civil works are making good progress, where the electric
arc furnace foundations have been successfully completed and the furnace
baseplate, which is already on site, is due to be mounted in the coming weeks,
marking the beginning of the electro-mechanical instillation phase. A
timelapse video of the furnace foundation concrete pour totalling 2,707m(3) of
concrete can be found here:
https://horizonteminerals.com/uk/en/videos_and_audio/

 

Figure 2: Showing the complete furnace foundation with the calcine transfer
system foundation to the left of the furnace with the form work being prepared
ahead of main concrete pour

 

To date, 510 deep pile foundations, sunk to a depth of 18 meters, have been
installed across the plant site, including for the rotary kiln support column
foundations, calcination area, secondary crusher and homogenisation building,
as seen in Figure 3.

 

Figure 3: Piling of the main steel supports for homogenisation building

 

The construction of the main 125 kilometre, 230kV powerline to power the
process plant, is advancing along four work fronts. Pre-assembly of the tower
structures is ongoing with drilling and concreting of the tower foundations
progressing to schedule. Construction of the main substations at the mine site
and connection point has commenced.

 

As shown in Figure 4 the furnace baseplate sections arrived on site with
welding now complete, and the furnace shell is due to be delivered to site by
the end of the year.

 

 

Figure 4: Store yard showing the furnace base plates and the steel beams (in
blue) for the main furnace building structure

 

Environmental activities

In the Company's second quarter of active construction, environmental programs
remained focussed on avoidance and mitigation of impacts. Fauna protection
programs included active relocation of animals ahead of clearing for
construction activity. To date over 140 individuals of 55 species have been
rescued through this program. The Company's teams also continued collecting
plant propagules (seeds, seedlings and similar) to ensure species and genetic
diversity is maintained in the nursery plant generation programs. The
biodiversity conservation centre construction and plant nursery expansion are
now largely complete.  The nursery is expected to deliver 50,000-60,000
native tree seedlings per year for rehabilitation and the generation of new
green corridors.

 

As part of the Company's activities towards net positive impact on
biodiversity, Horizonte commenced afforestation of pasture affected creek
lines that had been impacted by long term agriculture and over-grazing.
Associated with the Company's biodiversity objectives, a study of invasive
plant species was completed, forming part of the ongoing update of Horizonte's
Biodiversity Action Plan.

 

Social activities

In December 2022, Horizonte was proud to be recognised at the Brazilian
Association of Human Resources awards as the winner in the ESG category for
our local professional training program - Transforming Horizons. The program,
conducted in partnership with Brazil's leading national industrial training
provider, Serviço Nacional de Aprendizagem Industrial (SENAI) has delivered
over 20 accredited training courses (12 completed to date), with over 200
graduates, 32% of whom are female and 14% are youth. In just seven months
since inception, the Company has already employed 28 graduates at Araguaia.

 

POWER PURCHASE AGREEMENTS

In November, binding power purchase agreements were executed covering the
first 10 years of Araguaia's production, locking in globally competitive
prices, 30% below the Feasibility Power cost assumption. Representing
approximately a third of Araguaia's operational cost, these competitive
electricity prices will help establish the Company in the lowest cost quartile
globally. Further, in line with the Company's target of operating in the
lowest quartile of CO(2) emissions, Horizonte will leverage the abundant
hydropower available in Brazil. Through this, Horizonte is able to not only
differentiate itself against global peers from a cost perspective, but also
from an environmental standpoint.

 

PROJECT FINANCING ACTIVITIES

As announced on 8 December 2022, Horizonte satisfied all conditions precedent
for the first utilization under the previously announced senior secured
project finance debt facilities of US$346.2 million (the "Senior Debt
Facilities") and is now in receipt of the first tranche of funds from the
Senior Lenders.

 

This milestone demonstrated that the Company has made significant progress on
the Project development schedule and that is has been able to satisfy to the
Senior Lenders that the Company has:

·    made significant progress with construction, and in line with the
schedule;

·    awarded all of the key material contracts, including equipment
supply, Engineering Procurement and Construction Management (EPCM), port
access and power supply;

·    have a long-term offtake in place for 100% of Araguaia's production
from line 1 with a high quality counterparty in Glencore; and

·    have built out a high-quality team to deliver the Project.

Following the Company's announcement on 4 October 2022 regarding a proposed
equity fundraise of approximately £61.7 million, Horizonte was pleased to
announce an oversubscribed and upsized fundraise of approximately 70.5 million
on 5 October 2022, which was finalised on 8 November 2022 following admission
to AIM and the TSX of the newly issued shares.

 

 

 

For further information, visit www.horizonteminerals.com
(http://www.horizonteminerals.com) or contact:

 

 Horizonte Minerals plc                                                     info@horizonteminerals.com (mailto:info@horizonteminerals.com)

 Jeremy Martin (CEO)                                                        +44 (0) 203 356 2901

 Simon Retter (CFO)

 Patrick Chambers (Head of IR)

 Peel Hunt LLP (Nominated Adviser & Joint Broker)                           +44 (0)20 7418 8900

 Ross Allister

 David McKeown

 BMO (Joint Broker)                                                         +44 (0) 20 7236 1010

 Thomas Rider

 Pascal Lussier Duquette

 Andrew Cameron

 Tavistock (Financial PR)                                                   +44 (0) 20 7920 3150

 Emily Moss

 Cath Drummond

 Adam Baynes

 

 

ABOUT HORIZONTE MINERALS

Horizonte Minerals plc (AIM & TSX: HZM) is developing two 100%-owned, Tier
1 projects in Pará state, Brazil, the Araguaia Nickel Project and the
Vermelho Nickel-Cobalt Project. Both projects are large scale, high-grade,
low-cost, low-carbon and scalable. Araguaia is under construction with first
metal scheduled for early 2024, when fully ramped up with Line 1 and Line 2,
is forecast to produce 29,000 tonnes of nickel per year. Vermelho is at
feasibility study stage and is expected to produce 25,000 tonnes of nickel and
1,250 tonnes of cobalt to supply the EV battery market. Horizonte's combined
near-term production profile of over 60,000 tonnes of nickel per year
positions the Company as a globally significant nickel producer. Horizonte's
top three shareholders are La Mancha Investments S.à r.l., Glencore plc and
Orion Resource Partners LLP.

 

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Except for statements of historical fact relating to the Company, certain
information contained in this press release constitutes "forward-looking
information" under Canadian securities legislation. Forward-looking
information includes, but is not limited to, the ability of the Company to
complete the acquisition of equipment as described herein, statements with
respect to the potential of the Company's current or future property mineral
projects; the ability of the Company to complete a positive feasibility study
regarding the second RKEF line at Araguaia on time, or at all, the success of
exploration and mining activities; cost and timing of future exploration,
production and development; the costs and timing for delivery of the equipment
to be purchased as described herein, the estimation of mineral resources and
reserves and the ability of the Company to achieve its goals in respect of
growing its mineral resources; the realization of mineral resource and reserve
estimates and achieving production in accordance with the Company's potential
production profile or at all. Generally, forward-looking information can be
identified by the use of forward-looking terminology such as "plans",
"expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or statements that
certain actions, events or results "may", "could", "would", "might" or "will
be taken", "occur" or "be achieved". Forward-looking information is based on
the reasonable assumptions, estimates, analysis and opinions of management
made in light of its experience and its perception of trends, current
conditions and expected developments, as well as other factors that management
believes to be relevant and reasonable in the circumstances at the date that
such statements are made, and are inherently subject to known and unknown
risks, uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of the Company to be materially
different from those expressed or implied by such forward-looking information,
including but not limited to risks related to: the inability of the Company to
complete the acquisition of equipment contemplated herein, on time or at all,
the ability of the Company to complete a positive feasibility study regarding
the implementation of a second RKEF line at Araguaia on the timeline
contemplated or at all, exploration and mining risks, competition from
competitors with greater capital; the Company's lack of experience with
respect to development-stage mining operations; fluctuations in metal prices;
uninsured risks; environmental and other regulatory requirements; exploration,
mining and other licences; the Company's future payment obligations; potential
disputes with respect to the Company's title to, and the area of, its mining
concessions; the Company's dependence on its ability to obtain sufficient
financing in the future; the Company's dependence on its relationships with
third parties; the Company's joint ventures; the potential of currency
fluctuations and political or economic instability in countries in which the
Company operates; currency exchange fluctuations; the Company's ability to
manage its growth effectively; the trading market for the ordinary shares of
the Company; uncertainty with respect to the Company's plans to continue to
develop its operations and new projects; the Company's dependence on key
personnel; possible conflicts of interest of directors and officers of the
Company, and various risks associated with the legal and regulatory framework
within which the Company operates, together with the risks identified and
disclosed in the Company's disclosure record available on the Company's
profile on SEDAR at www.sedar.com (http://www.sedar.com) , including without
limitation, the annual information form of the Company for the year ended
December 31, 2021, the Araguaia Report and the Vermelho Report. Although
management of the Company has attempted to identify important factors that
could cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.

 

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