Horizonte Minerals Plc is to acquire the advanced Vermelho nickel-cobalt project in Brazil from the Brazilian national mining champion Vale for US$8mln, mostly in deferred payments.
Concurrently, Horizonte is raising up to £8.5mln in a placing of shares in the UK and Canada at 3.5p per Placing Share.
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The Vermelho project has a high grade scalable mineral resource with over 1mln tonnes of contained nickel and 43,000 tonnes of contained cobalt. The combination of Horizonte’s Araguaia nickel project, which is now in the advanced stages of development, with Vermelho looks set to create a real force in global nickel production.
Vermelho was approved by Vale in 2005 with nameplate annual production capacity of 46,000 tonnes of nickel and 2,500 tonnes of cobalt. Vale also conducted a feasibility study on the project, the results of which have been made available to Horizonte.
The initial payment is just US$150,000, with US$1,850,000 due on the second anniversary with the balance payable on sale of first commercial product; and,
The plan now will be to use the money raised in the placing to take Vermelho through a Preliminary Economic Assessment.
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"I am delighted to announce the acquisition of Vermelho which transforms Horizonte into a multi-asset company bringing together two large, advanced nickel assets located in an established mining region in the Para State northern, Brazil,” said Horizonte chief Jeremy Martin.
“The Vermelho project also contains a large cobalt resource which Vale planned to process alongside the nickel, which gives Horizonte exposure to an additional commodity stream, in light of the growing interest in both cobalt and nickel for use in the Electric Vehicle battery market."