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LONDON (Alliance News) - The chairman of Horizonte Minerals PLC Tuesday said the company is currently undervalued as it progresses its large nickel project in Brazil, though its 2015 loss widened year-on-year.
The exploratory miner, which is yet to make any revenue, said its pretax loss was wider in 2015 at GBP1.7 million than the GBP1.2 million loss in 2014 as higher impairment charges and finance costs offset cost reductions elsewhere in the company.
Horizonte booked GBP253,006 of impairments against its assets that are currently up for sale, something that was not present in last years figures, and also paid GBP338,430 in finance costs compared to only GBP173,908 in 2014.
Foreign exchange losses also increased in 2015 to GBP251,409 from the GBP46,364 loss in the previous year.
The reduction in administrative costs to GBP864,892 from GBP1.3 million, alongside small falls in other costs, failed to offset those increases.
"For the first half of 2016 work will focus on the integration of the Glencore project with the Araguaia project - this includes updating the combined mineral resource estimate with the phase 4 drilling completed in 2015, an updated process flow sheet with the data and results from the pilot programme and updated capital costings which will all flow into an updated pre-feasibility study," said Chief Executive Jeremy Martin.
Horizonte acquired Glencore PLC's Araguaia project in the year and is combining it with its own Araguaia project in Brazil where it hopes to create one of the highest grade nickel saprolite projects in the country.
"The consolidation of the Araguaia district is a major achievement for Horizonte. The enlarged project is ideally placed in the commodity cycle to be advanced with the aim of commencing production within the next five years when the supply/demand fundamentals for nickel will be more favourable," said Chairman David Hall.
Hall said the company is currently valued at CAD0.01 per pound of nickel it has in the ground, comparing that figure to the the acquisition of Canico Resources by Vale in 2006 for a project of similar scale and grade at CAD0.23 per pound nickel in the ground at the feasibility study stage.
Horizonte shares were down 4.4% to 1.72 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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