viewHorizonte Minerals PLC

Horizonte Minerals gets strong valuation on Vermelho project

  • Construction permit granted for Araguaia ferronickel mine
  • Feasibili​ty study estimates value (NPV) at US$401mln
  • Building starts once funding of US$443mln is arranged
  • Vermelho project has NPV of US$1.7bn following PFS 
Araguaia mine
First production is scheduled for 2022

What Horizonte does


The Araguaia ferronickel project is in Para State, Brazil.

Phase 1 will see the production of 14.5kt/year of nickel in ferronickel form, with the potential to increase that to 29kt/year through additional capex spending of US$199mln.

The first production should be in 2022 with the mine scheduled to run for 28 years.

Capital expenditure for phase I was estimated at US$443mln in last year’s feasibility study with cash costs of US$3.77/lb.

That feasibility study showed Araguaia to have a post-tax net present value of US$401mln and an internal rate of return of 20.1%.

Cash costs are expected to be US$3.77 per pound of nickel, or US$8,193 per tonne, making Araguaia a low-cost producer.

Horizonte has also published a first resource for the Serra do Tapa nickel deposit that sits 90km to the north of Araguaia.

In the Measured and Indicated category, Serra do Tapa contains 70.3mln tonnes grading 1.22% nickel, which has boosted Horizonte’s total tonnage by 30%.

A significant portion of high-grade saprolite within the deposit is amenable to the Rotary Kiln Electric Furnace process route to produce ferro-nickel, potentially providing a further high-grade feed source for the Araguaia project, said the junior.


Vermelho, a nickel-cobalt project in the eastern part of the Carajás mining district, was acquired by Horizonte in December.

A pre-feasibility study in October projected a 38-year mine life, with total cash flows over that time estimated at some US$7.3bn after tax.

The PFS established a base case valuation of US$1.7bn (net present value) and estimated an internal rate of return of 26%.

At full production, the mine would produce an average of 25,000 tonnes of nickel and 1,250 tonnes of cobalt each year, via a high-pressure acid leaching process.

Cash costs were modelled at US$8,020 per tonne of nickel which puts Vermelho in the bracket of low-cost producers, meanwhile, the initial capex estimate is pitched at US$652mln, including nearly US$100mln budgeted for contingencies.

What the boss says: Jeremy Martin, chief executive

"Producing high purity nickel and cobalt sulphate from the Vermelho project of suitable quality and grade for use in EV battery production is a major milestone in the development of the project,” said Horizonte’s Jeremy Martin.

“The Vermelho project is a value driver for the company, it is a high-grade scalable resource, with good infrastructure and has the potential to be fast-tracked to development.”

Watch the interview

Inflection points

  • Funding agreed for construction of Araguaia

  • Bankable feasibility study at Vermelho

  • Technology advances in nickel battery usage in electric vehicles and energy storage



Quick facts: Horizonte Minerals PLC

Price: 3.6 GBX

Market: AIM
Market Cap: £52.07 m

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Horizonte Minerals CEO details 2020 priorities at its Araguaia and Vermelho...

Horizonte Minerals PLC's (LON:HZM) (TSX:HZM) Jeremy Martin looks  back on what's been an 'exciting and active' year at its projects in Brazil. ''There are very few new assets out there on the scale of Araguaia or Vermelho''.  ''Our key objectives for 2020 are the financing...

on 13/12/19

3 min read