Horizonte Minerals (HZM ) said it has successfully completed a share placing as part of a c.£18m fundraise which will help advance the Araguaia ferronickel project into construction.
The Brazil-focused nickel development firm unveiled the fundraising post-close on Thursday afternoon. Horizonte will issue 162.7mln new shares at a price of 7.5p each to raise £18m – with £12.2m raised in the UK and £5.8m raised through an offering of shares in Canada.
The net proceeds of the fundraise will be used to initiate specific early works and advance long-lead time items linked to the start of construction of the Company’s wholly owned Araguaia ferro-nickel project in Brazil, as well as for general working capital purposes.
Horizonte said it continues to make “good progress” on its financing process for Araguaia. The Group is currently arranging a senior secured project finance facility of up to US$325m with a syndicate of banks to part-fund the project’s construction and development.
Commenting on the fundraising, CEO, Jeremy Martin said, "The financing completed today provides Horizonte with a strong balance sheet as we enter this next phase of the Company's evolution as we advance Araguaia through to the start of construction.
Funding is expected to allow the Group to fast track critical path workstreams, advance long lead items and further build its team. Martin said the raise is underpinned “by the strength of Horizonte's investment opportunity and the increasing appetite of investors for nickel.”
The Araguaia project is a high grade, low cost, long life asset located south of the Carajàs Mining District, north east Brazil. To date, the Company’s feasibility study has demonstrated robust economics with the Stage 1 process plant producing 14,500 tonnes of nickel per year.
Shares in Horizonte Minerals have increased by nearly 20% in value since the beginning of 2021. The stock was trading 7.05% lower this morning at 8.6p following its announcement.
As Horizonte unveiled its fundraise, the London Metal Exchange’s three-month nickel price rose to a seven-year high on Thursday. The institution noted that positive macroeconomic sentiment and the return of Asian trading’ had acted as catalysts for base metals prices.
Nickel’s three-month price reached $19,205 per tonne during Thursday, the first time it had touched above $19,000 per tonne since September 2014, the London Metal Exchange said.
Horizonte is also advancing another project, the Vermelho Nickel Cobalt project, towards feasibility stage with aim of producing nickel and cobalt sulphate for the EV battery market. The global EV battery market is set to grow at a compound annual rate of 52% by 2025.
In fact, the group highlighted that the short long-term outlook for the nickel market is being driven by acceleration in the EV battery sector and steady growth in stainless steel demand.
Martin said both Araguaia and Vermelho “have the flexibility to supply both the large and established stainless steel market and the rapidly growing electric vehicle battery market.”
“Horizonte is at a very exciting time as we transition to becoming a nickel producer.
He said the Company was operating “at a very exciting time” as it looks to transition into becoming a nickel producer. “We have a scalable production profile that will position the Company as a significant nickel producer globally,” Martin told investors in his statement.
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