Shareholders have approved plans by Horizonte Minerals Plc (LON:HZM) to raise £9.0mln to fund the preparation of a definitive feasibility study (DFS) for the company’s wholly-owned Araguaia nickel project in northern Brazil.
“It’s a significant [fund-] raise for us,” chief executive officer Jeremy Martin tells Proactive Investors, adding that the company got “good support” from investors both in the City and in Canada for its share placing.
That level of support was almost certainly boosted by the release of the pre-feasibility study at the beginning of early October. The key take-away from that was that at current nickel prices the project is economically viable and profitable.
“That puts Araguaia in a very small peer group of assets globally,” Martin noted.
Asked by Proactive to look into his crystal ball and forecast the future for nickel prices, Martin said there are three reasons why Horizonte believes nickel is a great space to be in: around 40% of all current production is sub-economic, which is not sustainable; there’s demand out of China, which is underpinning “good demand and supply fundamentals”; and, lastly, “if you look out there globally at the next generation of nickel assets, there are very few that are of the quality of Araguaia”.
Martin admitted that all the hard work the company has done over the last five years exploring the asset has been done against a background of a slumping market, but, backed by its strong cash position, it is in the right place at the right time.
The DFS is due to be finished by the end of next year, and the company will start dishing out contracts to parties working on it early in the New Year.
“We’re also starting a regional exploration project,” Martin said, noting that the company has a lot of ground around the core project.
“We’ve got some fairly exciting targets,” he declared.
Story by ProactiveInvestors