logo-loader

Horizonte attains key licence for Brazilian nickel project

Published: 10:24 08 Jun 2016 BST

Horizonte-examining-drill-core
Examining nickel mineralisation in drill core

“It’s a big milestone for us,” says Horizonte chief executive Jeremy Martin. Horizonte has just revealed that it has been awarded a preliminary license for the development of the Araguaia nickel project in Para State, Brazil.

Of all the licenses involved in getting a mine built and into production the preliminary license is what Martin refers to as “the big one.”

Two more permits will be required before production can actually officially commence, but the key now, continues Martin, is that the project has official recognition.

And it’s important not to underplay the significance of this. For the Para State authorities, well-used to mining in the richer Carajas region to the north, the prospect of over 1,000 new jobs in a poorer, less well developed area, is a key attraction.

As the announcement unequivocally states, the preliminary license “represents state government approval for the planned project.”

From Horizonte’s perspective this means that it can now proceed with greater confidence on the integrated pre-feasibility study that it has initiated at Araguaia, following the acquisition of significant additional resources from Glencore earlier in the year.

And perhaps even more notably from an investment perspective it lays down a marker that the company can indeed get things done in Brazil, and that major hurdles can be cleared.

“In the investment world people want to see if you can get your permits,” says Martin. After all, a good project without a permit is going nowhere.

But that’s not now the case with Araguaia, and not even with the Glencore ground, which is also set to be brought into the preliminary license once baseline studies have been completed.

What’s more, potential funding partners who might in the longer term end up helping Horizonte to get Araguaia built, can now see that this is a project that can move forward and that’s worth paying attention to.

It’s perhaps not helpful that nickel is at a 12-to-14 year low, but then again it may be that therein lies an opportunity.

After all, Martin’s aspirations for Araguaia are hardly modest. “We aim to make it best in class,” he says.

“We aim to show we sit at the lower end of the cost curve, the upper end of the grade curve, and that we have low capital intensity.”

With nickel at historic lows and the Horizonte share price somewhat hidebound because of it, some investors may take the view that now is as attractive an entry point as they’re ever going to get.

After all, within a few months the pre-feasibility study results will be out, the economics will be clear and the show will be on the road in terms of moving Araguaia up through the value curve.

The granting of the preliminary license is the first step in that process, but there’s likely to be plenty of activity and newsflow from here on in.

Shares in Horizonte rose by more than 11% on the news in early trade to 2.38p.

Oriole Resources outlines 2023 achievements and future exploration plans

Oriole Resources PLC (AIM:ORR) CEO Tim Livesey and chief financial officer Bob Smeeton join Proactive's Stephen Gunnion with details of the company's 2023 financial and operational performance. Livesey highlighted successful exploration programs in Cameroon, at the Bibemi and Mbe projects,...

37 minutes ago