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Hi Martin,
We do understand the frustration you will be feeling, this is also very much shared by us as a management team, having built up the business and value over the last 5 to 8 years to see the rapid value destruction in the market over the last 48 hours is deeply frustrating, when the underlying value in the assets is still compelling despite the requirement for the additional capital.
Construction continues to proceed apace at Araguaia with significant progress made over the last 2 quarters. All key equipment packages are now either on site or being transported to site. Mining is underway with the stockpiling activities having begun last quarter, with the run of mine build-up progressing on schedule.
However, a review of the detailed engineering and design has resulted in a number of changes in the design and execution scope which as per the release on Monday are expected to increase the overall capex requirement and delay the first production to 3Q 2024.
As per the release, HZM engaged Reta Engenharia to undertake a detailed capital costs review and whilst that work remains ongoing, the Company estimates that capital cost will increase by at least 35% against the current capex budget of US$537m.
Going forwards, we expect to publish an update in mid Q4 2023 once the capital costs review is completed and the company is working on a plan with its various financial institutions together with the cornerstone shareholders for a financing solution to complete construction. We are confident in delivering this plan and we currently don’t foresee any delays to ongoing construction.
Despite the capital cost increase and first production pushed to 3Q 2024, the Company expects Araguaia Line 1 to still deliver strong returns, with lower quartile cash cost and a mine life of 28 years. Further, the results from the Feasibility Study on Araguaia Line 2 remain on track to be published in Q4-2023 which is expected to further enhance the overall economics of Araguaia.
Additional value for the Company will also be generated as the Vermelho project is advanced through to the completion of a feasibility study.
Once again I want to re-iterate our frustration over these events and as a team we are working hard to ensure we deliver Araguaia and re build the value in the business.
Best
My reply same as others gla
Received earlier from bob
Martin
Like all stakeholders we are more than frustrated at the continued delay.
We are assured by BDO that we will be able to announce very soon, but have had numerous similar assurances since I arrived many months ago.
Bob
Bob Holt
Chief Executive
Topped up 6.44 thank you very much.... Gla
Took a few on that drop ......gla
Sorry dad !!!!!
No ya right but one person giving a tip not p an d im sure like most shares bit gossip works wonders when it hit top of leader board ppl av look want quick buck its not like jr or mags on here lol ...gl in dvrg ...
I can put £5 in dvrg for ya. idea is get in / out make few quid dont be bitter on ppl making money...its why we are all here ...
I owe you drink laura cheers....gla
Ive taken another big chunk be nice get in early for change ...gla
Big jump again like other day we will see ..gla
Gaining a bit of attention from ya tip laura ..gla
Small punt also ...gla
7.67/7.89 in end ..gla
Got 2 orders in both nt at mo .....lets see what price pops out at ...gla
Im here for quick pound note in today out tomoz fingers crossed .gla
Nice slow steady rise .lets see blue fin..gla