Horizonte Minerals PLC (AIM:HZM, TSX:HZM, OTC:HZMMF, FRA:H5W) took a big step towards starting construction of its Araguaia nickel mine in Brazil after a syndicate of five institutions gave final credit approvals.
A senior debt finance facility of US$346mln was arranged through the five lenders plus two export credit agencies (ECAs).
The five senior debt lenders are BNP Paribas, ING Capital, Natixis, Société Générale and Swedish Export Credit Corporation (SECC) while the ECAs are EKF, Denmark's export credit agency, and Finnvera PLC, Finland's export credit agency.
The US$346mln facility will include two tranches: Tranche A comprising US$146.2mln will be guaranteed by the ECAs and apply to equipment and service provider contracts.
Tranche B will comprise the remaining US$200mln provided by the banks and SECC and run for eight and half years compared to ten years for Tranche A.
Interest will be LIBOR plus 1.80% for Tranche A and LIBOR plus 4.25 to 4.75% for Tranche B.
Final signing off on the Senior Debt Facility is subject to customary conditions, including the negotiation and settlement of definitive documentation and the entry into a comprehensive intercreditor agreement, among others, Horizonte added.
Jeremy Martin, Horizonte’s chief executive, said: "The strength of the syndicate we have secured is testament to the robust economics of the project, our team's technical ability and our best practice sustainability standards.
“Credit approval from the full syndicate is the catalyst for finalising the other components of the overall financing requirement for Araguaia.
“As previously announced, the process with the offtake partner and strategic investor is well advanced.
“With very few new nickel projects with these credentials at construction phase we believe today's news is a pivotal point in Horizonte's story as we work to become a major nickel producer.
“This is against a backdrop of strong nickel market fundamentals where we are seeing significant demand in the stainless-steel sector alongside accelerating growth in the EV battery space."