Horizonte Minerals (LON:HZM, TSE:HZM) will significantly improve the scale and economic viability of its plans for the development of a major nickel project in Brazil, following the acquisition of sizeable additional resources from Glencore (LON:GLEN).
Glencore’s Araguaia nickel project lies in close proximity to Horizonte’s existing Araguaia deposit, and the combination of the two will create, according to the company, the world’s largest nickel saprolite development project in terms of size and grade.
Horizonte’s Araguaia project contains 72mln tonnes of ore in the indicated category, grading 1.33% nickel.
Glencore’s resource base is markedly larger at 105 mln tonnes measured and indicated, also grading 1.33% nickel.
“This is a game changing transaction for Horizonte,” said chief executive Jeremy Martin.
He noted that a path to development was already clear for Araguaia, following the decision to use a rotary kiln electric furnace processing route in earlier studies.
Work to integrate the Glencore project into those wider plans will now get underway, but Martin said he expects the project to be lower cost than many comparable operations.
The transaction is subject to shareholder approval as the terms call for a payment in shares greater than the company is currently authorised to make.
The total transaction cost will be US$8mln, made in staged payments.
To keep it going the company raised £1.55mln via a placing of shares at 1p.