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Horizonte Minerals PLC - nickel company focused on Brazil - Enters investment and subscription agreements to establish a comprehensive funding package of USD633 million, which will go towards the construction of the Araguaia project and bringing it into production.
Firstly, Horizonte will look to raise USD197 million through an equity fundraise, which will comprise an investment from La Mancha Investments Sarl and Orion Mine Finance Fund III LP each, and a placing to raise USD75 million in the UK. Also, the company has agreed to a subscription for shares by Glencore PLC to raise USD7 million.
As part of the Glencore agreement, Araguaia Niquel Metais Ltda has signed a ten-year offtake agreement with the Swiss commodities trader, under which Glencore will acquire all ferronickel produced from the Araguaia project.
In addition, Orion and La Mancha conditionally agree to subscribe for USD50 million and USD15 million of convertible loan notes. Orion has also proposed that a member of its group provides a USD25 million cost overrun debt facility.
Horizonte has received credit approvals and a signed commitment letter for USD346.2 million of senior debt from a syndicate of financial institutions, comprising two tranches of USD146.2 million and USD200 million respectively.
Finally, the company intends to raise up to USD8 million through an open offer of existing shares.
Including the cost overrun facility, the total funds raised would come up to USD658 million.
"We are delighted to announce the proposed funding package which, subject to satisfaction of the conditions and successful completion of the placing, is expected to fully fund Araguaia into production. This represents a significant milestone in the company's journey to become a major nickel producer and will enable Horizonte to capitalise on the significant projected growth in nickel demand," says Chief Executive Officer Jeremy Martin.
Current stock price: 8.14 pence, down 2.8% on Tuesday
Year-to-date change: up 11%
By Dayo Laniyan; dayolaniyan@alliancenews.com
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