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(Sharecast News) - Brazil-focussed nickel developer Horizonte Minerals announced the award of contracts for the line two feasibility study at its Araguaia project on Monday.
The AIM-traded company said the second line at Araguaia was expected to increase production by 100% to 29,000 tonnes of nickel per year, through the construction of a duplicate RKEF processing facility.
It said the aim of the feasibility study was to produce a feasibility report supported by a cost estimate and project execution plan, with results of the study expected to be published in the second half of the year.
Key contractors for the work included Snowden for geology, mine design, mine planning, and NI 43-101 reporting; Environment Resources Management (ERM) for environmental permitting outline planning; Reta Engineering for cost estimation, execution scheduling, and planning services; Draft Solutions for lead engineer, basic engineering design, and documentation; and Afry Poyry for process engineering support.
The board said the study was expected to demonstrate a mine life of more than 25 years, with a production capacity of around 29,000 tonnes of nickel per year at Araguaia.
Line two will deliver greater production flexibility, lower capital intensity, and increased operating margins.
An option was set to be designed into the flowsheet to allow a portion of the furnace product from line two to be converted to nickel matte, allowing Araguaia to produce both high-grade low impurity ferronickel as well as matte that could be upgraded to feed directly into the electric vehicle battery chemistry supply chain.
The Araguaia plant had been designed and optimised to allow for the build-out of line two, with key fixed infrastructure sized to support both lines, reducing the overall cost of developing the line.
Horizonte said the contracted groups were all key contributors to the engineering, costing, and construction work currently underway on line one at Araguaia, and had extensive knowledge and understanding of the project.
"The award of the line two feasibility study is an important step in achieving our goal of Araguaia becoming a scalable, low-cost nickel operation," said chief executive officer Jeremy Martin.
"Line one and line two together are designed to produce 29,000 tonnes per annum of nickel with the overall resource of 119 million tonnes able to support this scenario, with the potential to increase the mine life in the future."
Martin said the firm was also "excited" about the potential of having an option to produce nickel matte, giving Horizonte the ability to participate in different parts of the nickel market.
"We are making solid progress on the construction of Araguaia line one, which remains on-budget and on-schedule to produce first nickel in the first quarter of 2024, whilst simultaneously preparing for our next growth phase with Vermelho's feasibility study expected to be finalised in 2024."
At 1532 GMT, shares in Horizonte Minerals were up 1.06% at 148.05p.
Reporting by Josh White for Sharecast.com.
