TIDMHZM
RNS Number : 1957I
Horizonte Minerals PLC
03 August 2023
NEWS RELEASE
3 August 2023
HORIZONTE MINERALS PROVIDES Q2-2023 UPDATE
CONSTRUCTION OF ARAGUAIA NICKEL PROJECT NOW 65% COMPLETE
HIGHLIGHTS:
-- Araguaia Nickel Project Line 1 construction activities
continued to make good progress with first metal production
on-schedule for Q1 2024
- Strong safety performance, no lost time injuries with close to 3.8 million hours worked
- Approximately 65% of the overall construction of Araguaia was
completed as of 30 June 2023, with physical site construction 53%
complete
- Several major milestones were achieved during the quarter
including the delivery of the Rotary Kiln and commencement of ore
mining
- US$329 million has been spent on the Araguaia construction out
of the budgeted capital requirement of US$537 million
-- Araguaia Nickel Project Line 2 Feasibility Study ("FS"),
which aims to double nickel production from 14,500 tonnes per annum
to 29,000 tonnes per annum, to be published later this year
-- Liquidity and funding sources of US$344 million as of 30 June 2023
-- Published fourth consecutive standalone Sustainability Report for 2022
-- A recent video of the project progress is available:
https://horizonteminerals.com/uk/en/videos_and_audio/
Horizonte Minerals Plc (AIM/TSX: HZM) ("Horizonte" or the
"Company") the nickel company developing two Tier 1 assets in
Brazil, reports that it is continuing to make good progress on the
construction of its 100%-owned Araguaia Nickel Project Line 1
("Araguaia" or "the Project"). The Company is targeting first metal
in Q1 2024. M anagement will be hosting a webinar today, 3 August
2023, at 14:00 BST to discuss Araguaia's construction progress.
As of 30 June 2023, approximately 65% of the overall Araguaia
Line 1 construction programme has been completed, physical site
construction was 53% advanced with ore stockpiling having now
commenced following the issuance of the mining permit during the
quarter. Additionally, a major milestone in the quarter was the
safe delivery to site of the rotary kiln, a key long lead item. The
11 steel sections will now be aligned and welded together before
being lifted into place for final installation on the kiln piers.
Off-site, construction of the 126km, 230kV transmission line is
well advanced with over 90% of the pylons erected and 42 km of
conductor cable installed. Construction of the water storage
reservoir has commenced. As of 30 June 2023, a total of US$329
million has been spent on the Araguaia construction out of the
budgeted capital requirement of US$537 million. As at quarter-end,
the Company had total liquidity and funding sources of US$344
million.
Jeremy Martin, CEO of Horizonte, commented: "We are pleased with
progress to date at Araguaia Phase 1, with around 65% of the
overall project completed as at quarter-end. We are targeting first
metal in Q1 2024.
"We are proud to have maintained a strong safety record to date
and the safe delivery of the rotary kiln to site was a significant
milestone during the quarter and a testament to the commitment and
dedication of our team.
"Whilst the key focus is the construction activities at
Araguaia, we are making good progress on the Line 2 Feasibility
Study which is scheduled to be published later this year. The
proposed expansion has the potential to double the annual nickel
production to 29,000 tonnes per year.
"With the progress made to date, we remain confident in our
ability to deliver our world-class project in a safe and
responsible manner, continuing to move closer to unlocking the full
value of Araguaia, and more broadly across Horizonte's portfolio of
Tier 1 assets, realising our objective of becoming a low-cost
nickel producer."
The FS for Horizonte's 100% owned Vermelho project in Brazil, is
currently on-going and is expected to be published in 2024.
Vermelho has a high-grade scalable resource with a long mine life.
Given Vermelho's geological characteristics, the ore has the
ability to be processed either through High-Pressure Acid Leach
("HPAL") or Rotary Kiln Electric furnace ("RKEF") technologies. As
part of the study and driven by the evolving market dynamics,
Horizonte is evaluating the optimal final nickel product that will
supply the critical metals market.
Management will be hosting a webinar today, 3 August 2023, at
14:00 BST to discuss Araguaia's construction progress. Investors
and analysts are invited to access the webinar by registering in
advance via 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 shortly after its conclusion.
ARAGUAIA LINE 1 CONSTRUCTION: FIRST METAL ON-SCHEDULE FOR Q1
2024
1. Health, Safety & Wellbeing
The lost-time injury frequency rate ("LTIFR") for Araguaia as at
June 30 2023 was 0.00 and the total recordable injury frequency
rate ("TRIFR") was 1.03 based on a 12-month rolling average [1] .
This compares favourably with a TRIFR of 3.7 for the same period
last year but is a decrease in performance compared to the previous
quarter and reflects three restricted work cases in the quarter
where an employee is unable to perform the full range of normally
assigned duties over the course of a day. As the construction
workforce has increased by 18% to over 3,300 people across the
project during this period, Horizonte has continued to focus its
efforts on embedding the critical risk controls within the growing
workforce whilst reinforcing risk management. The Company continues
to implement tools to increase engagement and participation by our
contracting partners in our safety systems and processes. For the
project to date, over 5,800 internal safety audits have been
conducted and over 7,500 safety plan observations have been
completed. In the quarter, extensive campaigns on hand safety were
conducted.
2. Construction activities
As seen in Figure 1, good progress has been made across the RKEF
processing site where overall project completion was approximately
65% advanced, with physical site construction 53% complete and
multiple work fronts are active. Araguaia's Rotary Kiln Electric
Furnace flow sheet is designed to produce 14,500 tonne-per-annum of
high-grade ferronickel (FeNi). The Araguaia processing site has
also been designed and optimised to allow for the build out of Line
2 with key fixed infrastructure sized to support both lines,
helping to reduce the overall cost of developing Line 2.
Figure 1 - An overview of the Araguaia processing site
Figure 2 shows the ROM pad along with the ROM bin and primary
crusher. The steel structure will house the crusher which is
already on site. Ore blended from the ROM stockpiles, will pass
through the primary and secondary crushers where it will be reduced
to less than 80 mm, before being transferred to the Homogenisation
shed.
Figure 2 - The ROM pad, ROM bin and primary crusher
Figure 3 shows the roof trusses being installed for the 193m
long Homogenisation shed that will be used to blend the crushed
ore. An overhead tripper conveyor will run the full length of the
shed capable of building two blended stockpiles, one of which will
be being built while the other is being reclaimed. Each stockpile
has a capacity of around 18,000t, enough for 3.5 days of furnace
feed.
Figure 3 - The Homogenisation shed
Figure 4 shows the four Rotary Kiln piers, the individual kiln
pieces and the steel erection of the electrostatic precipitator.
Having arrived at site in June following an 18,000km journey by
sea, river and road, the 11 pieces of the 802 tonne FLSmidth rotary
kiln will now be aligned using polar verification, welded together
into four sections before being lifted into place for final welding
and installation on the kiln piers. The kiln itself was designed
and built according to the highest industry-leading standards to
improve efficiency of the reduction process. Features include
having the lowest specific heat loss in its class as well as an
integrated electrostatic precipitator, delivering efficient
emission controls thereby having one of lowest particulate emission
levels in the industry.
Figure 4 - Rotary kiln piers, the individual kiln pieces, the
steel erection of the electrostatic precipitator and the electric
arc furnace
As seen in Figure 5, erection of the steel structure that
surrounds the electric arc furnace continues to make good progress
with the 4(th) of 5 floors now erected. This will house all the
associated equipment and infrastructure that is required to operate
the furnace within a temperature range of up to 1,550 (o) C.
Erection of the building is through a modular construction process,
lifting large pre-assembled sections of steel work, including
scaffolding and railings, into place. The calcine transfer system,
located on the left-hand side, takes the hot caline from the rotary
kiln and delivers it into the electric arc furnace. From there, the
ferronickel will be tapped & refined to produce a granulated
high-grade 30% FeNi product which will be transported via truck to
a bonded warehouse in the port of Vila do Conde.
Figure 5 - Electric arc furnace
Figure 6 shows construction of the electrical sub-station,
supplied by Vision. Here, electricity from the 230kV transmission
line will be received before being distributed across the site. Low
cost, renewable electricity will be transmitted along the 126km
powerline from the Xinguara Bay substation, the only major offsite
infrastructure required for the Araguaia project. To date, 240 out
of 260 pylons have been erected and 42km of the conductor cables
has been installed.
Figure 6 - Electrical sub-station
3. Commencement of ore stockpiling
As announced in early July, Araguaia's mining permit was
approved ("Autoriza o comissionamento da atividade de Extração
Mineral") enabling the Company to mine and stockpile ore in
anticipation of commissioning, thereby optimising the consistency
of the feedstock. The first mineralised ore has since been mined
and stockpiling has begun. Over the course of the next six months,
further stockpiles will be established, with sufficient ore to feed
the plant for the subsequent six months. Fagundes, a leading
Brazilian contract mining services company began pre-stripping
activities at the Pequizeiro pit in April and to date have removed
400kt of overburden.
Figure 7 - A view of the Pequizeiro pit
4. Water storage reservoir
Construction of the water-storage reservoir has commenced. The
next steps will be elevation of the main embankment, internal
drainage and jet grouting the main embankment wall. The reservoir
will provide a constant source of cooling water to the process
plant and act as a heat sink for the furnace. Over Araguaia's life
of mine, Horizonte expects 90% of water used in the process plant
to be recycled.
Figure 8 - Water storage reservoir
5. Environmental activities
With the onset of the dry season, management of dust from road
traffic has become an area of focus. In 2022 alone, Horizonte
invested over BRL 50M in state and municipal road upgrades -
including widening, capping, safety controls and bridge upgrades,
making what were previously poor quality roads, safe for increased
levels of activity - benefiting the Company and local communities.
In relation to the management of dust, the Company continues
implementing its commitments in the sections of roads most impacted
by Company activities. Beyond compliance, in the quarter this
included the commencement of sealing of roads adjacent to five
small rural villages. As the roads are state and municipal
infrastructure, intended to be maintained through the payment of
taxes for the benefit of all road users, the additional BRL 2M
commitment to road sealing is a corporate social responsibility
initiative of the Company.
6. Social activities
In the quarter, Horizonte continued to implement a range of
social programmes at Araguaia. In conformance with International
Finance Corporation (IFC) Performance Standard 5, the Company has
been advancing various initiatives in support of the families that
are directly impacted by the project. The first three houses for
resettled families are now complete and agronomic support is being
provided as part of the livelihoods restoration and enhancement
plan. Also in the period, the Company continued the sampling of
community water supply systems and sharing the results of the water
quality testing. None of the results were project impacted, however
valuable engagement occurred as the Company raised awareness on
'safe' water supply, hygiene and health. The programmes were well
received by the community participants.
7. Permitting
In the quarter and as previously announced, we were pleased to
announce the receipt of authorisation for the commencement of
mining at Araguaia. In Brazil, environmental licencing follows a
three-stage process: i) preliminary licence (LP), which is issued
following assessment and acceptability of the project proposal and
impact assessment; ii) installation licence (LI) allowing
construction and other preliminary development, such as
pre-stripping; and iii) operational licence, allowing the use and
operation of the constructed/developed infrastructure. With the
issuance of the mining authorisation, Horizonte has commenced
extraction and stockpiling of ore in preparation of
commissioning.
ARAGUAIA LINE 2: FEASIBILITY STUDY EXPECTED IN 2H 2023
In March 2023, Horizonte awarded the Araguaia Line 2 FS
contracts aiming to double nickel production to 29,000 tpa at
Araguaia through the construction of a duplicate RKEF processing
facility ("Line 2"). Good progress has been made to date and the
Company continues to target publication of the study results later
this year. Araguaia line 2 is expected to deliver greater
operational flexibility, lower capital intensity and increased
operating margins. The aim of the FS is to produce a NI 43-101
Feasibility Report supported by a AACEI Class 2-quality cost
estimate, and project execution plan.
PROJECT FINANCING ACTIVITIES
As of 30 June 2023, a total of US$329 million has been spent on
the Araguaia construction out of the budgeted capital requirement
of US$537 million.
As of 30 June 2023, US$140 million has been drawn down from the
senior secured project finance debt facility of US$346 million (the
"Senior Debt Facility"). As of 30 June 2023, the Company had total
liquidity sources of US$344 million comprised of US$206 million
undrawn on the Senior Debt Facility, a cash position of US$108
million, and US$30 million on the Cost Overrun Facility (which
remains undrawn to date). After quarter-end, the Company
successfully passed its cost-to-complete test, in accordance with
its lending terms, which assessed the Company's funding headroom to
carry-out the Araguaia Phase 1 project build to nameplate
production, enabling the draw down of an additional US$75m.
For further information, visit www.horizonteminerals.com or
contact:
Horizonte Minerals plc 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)
Ross Allister
David McKeown +44 (0)20 7418 8900
---------------------------
BMO (Joint Broker)
Thomas Rider
Pascal Lussier Duquette
Andrew Cameron +44 (0) 20 7236 1010
---------------------------
Barclays (Joint Broker)
Philip Lindop
Richard Bassingthwaighte +44 (0)20 7623 2323
---------------------------
Tavistock (Financial PR)
Emily Moss
Cath Drummond +44 (0) 20 7920 3150
---------------------------
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 high-grade, low-cost, with low carbon emission
intensities and are scalable. Araguaia is under construction with
first metal scheduled for 1Q 2024. When fully ramped up with Line 1
and Line 2, Araguaia is forecast to produce 29,000 tonnes of nickel
per year. Vermelho is at feasibility study stage and is expected to
supply nickel to the critical metals market. Horizonte's combined
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 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.
[1] Calculated per million hours worked
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END
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August 03, 2023 02:00 ET (06:00 GMT)
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