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(Alliance News) - Horizonte Minerals PLC on Thursday said it has secured USD25 million in funding to advance the Araguaia ferro-nickel project in Brazil.
London-listed shares in Horizonte Minerals were up 45% at 4.90 pence each in morning trade.
The nickel miner has signed a royalty agreement with Orion Mine Finance to provide funding for the Araguaia project. Under the agreement, Orion Mine will provide an upfront cash payment of USD25 million in exchange for a 2.25% royalty on the Araguaia project.
The royalty only applies to the first 426,429 tonnes of contained nickel within the final product, ferronickel, produced and sold.
"We are extremely pleased to secure this royalty agreement with Orion, which enables us to build out our owner's team, advance engineering and early works packages as we proceed to the start of full construction at Araguaia. This royalty financing is non-dilutive for shareholders, and has been pre-designed to be compatible with the project funding packagem," said Horizonte Chief Executive Executive Jeremy Martin.
"Nickel has been an outstanding performer this year, currently trading almost 50% higher than at the start of 2019. At current nickel prices of USD15,500 per tonne, the Araguaia Feasibility Study Stage 1 returns an net present value of more than USD580 million," Martin added.
