REG - Horizonte Minerals - Corporate Update

Horizonte MineralsAnnouncement

15/04/2024 07:00

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RNS Number : 5290K  Horizonte Minerals PLC  15 April 2024

NEWS
RELEASE

15 April 2024

 

CORPORATE UPDATE

Horizonte Minerals Plc (AIM/TSX: HZM) ("Horizonte" or the "Company") announces
that, after a period of discussions to restructure the group's debt in
conjunction with seeking a fully funded solution for its 100%-owned Araguaia
Nickel Project ("Araguaia" or the "Project") and actively engaging existing
and new potential investors, the Company has been unable to secure interest in
the full financing needed to complete the Project or in a group acquiring the
Project. In the absence of a financing solution, Horizonte must now consider
alternative options for the Company's subsidiaries in the interest of its
secured creditors, which may include raising financing at the subsidiary
level, a sale of the Project whilst in care and maintenance, the liquidation
of the assets of the Project, or other options available under Brazilian laws.
The Company does not believe that any of these options are likely to recover
any value for the Company's shareholders.

 

Since the end of November 2023, the new management team has stabilized the
business and undertook a comprehensive audit of the cost to complete and
business plan to critically assess the current viability of the Project. The
results of this audit demonstrated Araguaia's project fundamentals as a robust
1(st) quartile operating cost asset, but also highlighted a significant
increase of the cost to complete compared to previous estimates. Following an
extensive engagement and global roadshow where over 150 parties, including
over 39 which entered into non-disclosure agreements ("NDA's") were approached
across both debt and equity, the Company has been unable to secure the full
financing needed to complete the project at this time. The majority of
investors who conducted detailed due diligence on the Project, after signing
NDA's, cited the unfavourable nickel market environment as the reason for
declining to pursue the opportunity further. Despite nickel's long-term
outlook being strong, investor sentiment has been dampened by low spot prices
and near-term uncertainties which include the supply surplus from Indonesia,
and the consequent downward shift in the cost curve, risks to global nickel
demand and market dynamics of Class I and Class II nickel products.

 

Discussions with secured creditors, and existing and new potential investors
on alternative scenarios will continue to be held with a view to a potential
restructuring solution to attempt to achieve some recovery value to our
creditors. These include raising financing at the subsidiary level, or
disposing of the Project whilst in care and maintenance, thereby maintaining
the prospect of the Project as a going concern, liquidation of the assets of
the Project, or the consideration of other options available under Brazilian
laws to attempt to achieve the best possible recovery to the Company's
creditors while minimising potential liabilities. As at 10 April 2024, the
Company had a cash balance of US$16.2 million (excluding cash that is
segregated for the development of the Vermelho Project).

 

Furthermore, given the lack of more favourable scenarios to deal with the
Company's liabilities, the Board is continuously reviewing the options
alongside their professional advisers.

 

Karim Nasr, Interim CEO of Horizonte, commented:

 

"The Board and management are extremely disappointed by the results of our
effort to attract financing into the Company. While we received commendation
on the quality of the project and of the comprehensive work put together by
the Company's team, and supportive attitude of the Company's creditors and
Cornerstone Shareholders, the lack of prospects in a recovery of the
Ferro-Nickel market considering Indonesian supply dynamics have impeded the
confidence of investors in earlier stage projects with high capital intensity,
including Horizonte.

We regret the impact this outcome will have on our many stakeholders. I want
to thank everyone involved, especially the Horizonte team, for their efforts
through this very challenging period."

 

 

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

 

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

 Patrick Chambers (Head of IR)                         +44 (0) 203 356 2901

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

 Ross Allister

 David McKeown

 Bhavesh Patel

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

 Thomas Rider

 Pascal Lussier Duquette

 Andrew Cameron

 Barclays (Joint Broker)                               +44 (0)20 7623 2323

 Philip Lindop

 Richard Bassingthwaighte

 

 

 

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 any planned acquisition of equipment, 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 ability of the Company to
complete a positive feasibility study regarding the Vermelho Project 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, 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 any planned acquisition of equipment 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, the ability of the Company to complete a positive feasibility study
regarding the Vermelho Project 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, including without limitation, the annual information form of
the Company for the year ended December 31, 2022, and the Araguaia and
Vermelho Technical Reports available on the Company's website
https://horizonteminerals.com/. 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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