Speculative Buy17 Apr 2015 11:47
Horizonte Minerals (LON:HZM) – Speculative Buy - Beaufort Securities 17 April 2015
Yesterday, Horizonte Minerals announced the completion of infill resource drilling programme at its fully owned Araguaia nickel project in Brazil. The initial results indicated new high grade nickel (>2%) intersection ranging from 2.29m to 20.17m at the prospect. The seven rig, 10,255 metre infill resource drill programme aims to convert the first 7-8 years of the 25 year modelled mine life to the Measured resource category and substantiate the nickel mineralisation for this part of Araguaia’s projected production. The final infill drill results are expected to be released by Q2 2015.
Our view: With the completion of initial phase of the resource drilling, Horizonte has moved a step closer to the final geotechnical and hydrogeological drilling programme, involving detailed assessment to design the process plant structures. The Araguaia mine targets production by late 2017 and enjoys excellent infrastructure including rail, road, water and power. The current NI 43-101 compliant Mineral Resource of the mine stands at 71.98Mt at a grading of 1.33% Ni (Indicated) and 25.4Mt at 1.21% Ni (Inferred) at a 0.95% nickel cut-off. The pre-feasibility study already supports the development a mine with a targeted 15,000 tonnes per annum Nickel over a 25 year mine life. The company’s solid funding position and continued progress at the mine site facilitated the delivery of planned milestones in 2015 despite challenging market conditions. Thus in view of the promising updates from the mine till date, the company remains on track to develop a major nickel mine in Brazil. We retain our Speculative Buy on the stock.
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