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REG - Horizonte Minerals - Long-term power secured for Araguaia

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RNS Number : 9838G  Horizonte Minerals PLC  21 November 2022

NEWS
RELEASE

21 November 2022

 

HORIZONTE MINERALS PLC SECURES RENEWABLE LONG-TERM POWER FOR ITS ARAGUAIA
NICKEL PROJECT IN BRAZIL

LOCKING IN A 30% DISCOUNT TO THE FEASIBILITY STUDY POWER COST

 

 

Highlights:

 

·    Binding power purchase agreements executed covering the first 10
years of Araguaia production, ensuring the project will operate in the lowest
quartile of global nickel producers;

·    Fixed pricing of US$28.4/MWh and US$29.6/MWh, for years 0-5 and 6-10
respectively 1  (#_ftn1) , represents a price exclusive of transmission
charges ~30% lower than that used in the feasibility study; and

·    The power in Brazil is generated through renewable sources, in line
with Horizonte's target of being one of the lowest CO(2) nickel producers
globally.

 

Horizonte Minerals Plc (AIM/TSX: HZM) ("Horizonte" or the "Company") is
pleased to announce that it has entered into long-term power purchase
agreements ("PPAs"), thereby securing renewable power at a low cost for its
100%-owned Araguaia Nickel Project ("Araguaia" or "the Project") in Brazil,
where construction is underway and production remains on track to commence in
Q1-2024.

 

The PPAs have been awarded to a subsidiary of a global AAA rated energy
company and Casa dos Ventos Comercializadora de Energia S.A. ("CDV"). The PPAs
comprise three underlying contracts with all suppliers utilising renewable
power, delivering a fixed price of US$28.4 /MWh during years 0-5 and US$29.6
/MWh for years 6-10, excluding transmission costs and other charges. All
contracts are priced in US dollars, mitigating any foreign exchange risk, with
no inflation adjustments included. This favourable pricing represents an
estimated cost of approx. US$1,400/t Ni when transmission costs and charges
are included compared to approx. US$2,000/t Ni used as the basis for the
Feasibility Study, representing a cost reduction of around 30%.

 

The PPAs will supply 100% of the expected power demand during the ramp-up
period and the first five years of operations, in addition to over 60% of the
expected power demand for the following five years.

 

Jeremy Martin, CEO of Horizonte Minerals, commented: "Given that the
electrical power will represent roughly a third of Araguaia's operational
cost, we are very pleased to enter into these fixed-price power contracts
which are 30% lower than that used in the feasibility study ensuring that our
operational costs will be in the lowest quartile globally.

 

"Furthermore, in line with our target of becoming one of the lowest CO(2)
nickel producers globally, these PPA contracts demonstrate our ability to
achieve this objective. By leveraging the abundant hydropower available in
Brazil, we are able to not only differentiate ourselves against global peers
from a cost perspective, but also from an environmental standpoint.

 

"Given the PPA supplier's strong operating credentials, we see these contracts
as a major de-risking milestone for the Araguaia project."

 

 

ABOUT CASA DOS VENTOS

 

Casa dos Ventos Comercializadora de Energia S.A. ("CDV") is a Brazilian energy
company that develops, builds and operates renewable energy projects. The
company is one of the leading providers of energy solutions to support
consumers in their energy transition and holds the largest portfolio of wind
and solar projects under development in the country, with approximately 20 GW.

 

CDV is a signatory to the UN Global Compact and works in line with the 17
Sustainable Development Goals (SDGs) and best ESG practices, preserving local
biomes, developing social projects in the communities where it is present and
contributing to a low carbon economy.

 

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 it
will produce 29,000 tonnes of nickel per year. Vermelho is at feasibility
study stage and will 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.

 

 

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

 

 

 

 

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.

 

 1  (#_ftnref1) Represents the net cost to the company of the power supply,
fixed in USD, excluding transmission and other costs of BRL42.6 / MWh
(US$9.5/MWh) using 4.5 USD:BRL. This compares to transmission and other costs
of BRL36.2 / MWh (US$10.3/MWh) using 3.5 USD:BRL in the feasibility study.

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