mmmmmmm21 Oct 2010 11:33
Horizonte Minerals goes for expansion
Article Date: Oct 19 2010
Brazil-focused Horizonte Minerals hopes to establish a 60 million-tonne nickel resource at its Araguia project next March.
The AIM-quoted company, which transformed itself in the summer by obtaining the project in an all-share deal with overstretched Canadian miner Teck, suggests that estimate will shortly afterwards give way to an updated 100 million tonnes at a relatively high grade of 1.3 per cent.
Following the Araguia deal, Teck, a major international mining company, holds 50 per cent of London-based Horizonte, which hopes to have a pre-feasibility study on the project ready by mid-2011. That could involve a fundraising, though chief executive officer Jeremy Martin believes a further estimated resource upgrade to 150 million tonnes could sweeten the pill.
The price of nickel has risen 71 per cent in five years and Martin argues demand from China, other Eastern markets and Brazil itself could keep up the momentum for at least 18 months to two years. Araguia is in northern Brazil's Carajas mining region, with infrastructure readily at hand.
Martin argues the market puts a lower value on Araguia, where only half the 12 target areas have been drilled, than other comparable or inferior projects around the world. Horizonte also has several gold projects in Brazil, including joint ventures and a 49-51 per cent strategic partnership with mining major Anglo Gold Ashanti and an exploration deal with another group, Troy Resources.
Teck's major stake adds corporate spice to Horizonte's shares, which performed lamentably after their 30p float in 2006, falling to 7p within the past year. Highlighted by Growth Company Investor at 10p in August, the shares have moved up to 12.5p, valuing the company at nearly £31 million, and should rally further if project progress is maintained.
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