Name of the Project
Araguaia ferronickel project.

Location
Pará state, Brazil.

Project Owner/s
Horizonte Minerals.

Project Description
A feasibility study has confirmed Araguaia as a Tier 1 project with a large high-grade scalable resource, long mine life and low-cost source of ferronickel for the stainless steel industry.

The project has two principal mining centres – Araguaia nickel south (ANS) and Araguaia nickel north (ANN). ANS hosts the Pequizeiro, Baiao, Pequizeiro West, Jacutinga, Vila Oito East, Vila Oito West and Vila Oito deposits, while ANN hosts the Vale do Sonhos deposit.

The feasibility study envisages an openpit nickel laterite mining operation that delivers ore from several pits to a central rotary kiln electric furnace (RKEF) metallurgical processing facility.


The deposits will be mined by contractors using conventional openpit truck-and-shovel techniques. No blasting will be necessary. Reverse circulation grade-control drilling will be completed at a 10 m × 10 m spacing, well ahead of mining. This, combined with visual control of the limonite and transition boundary, face sampling, stockpile sampling and ore feed sampling, supports a comprehensive mine-to-mill strategy that is designed to maintain consistent feed to the process plant.

Waste will be stored in external dumps near the pits. Ore will be transported to stockpile hubs near each deposit. Sheeting (using ferricrete extracted from the overburden) will be required to support trafficability in and around the mine during the wet season. Depending on plant demand, ore will be hauled from hub stockpiles or directly from the pits to the run-of-mine (RoM) at the RKEF process facility. Stockpiles on the RoM will be sheeted and classified according to ore type and chemistry for blending.

After an initial ramp-up period, the plant will reach full capacity of about 900 000 t/y of dry ore feed to produce 52 000 t/y of ferronickel containing 14 500 t/y of nickel.

The project has an initial 28-year mine life.

Araguaia’s feasibility study design allows for the future construction of a second RKEF process line, with potential to double Araguaia’s production capacity from 14 500 t/y to 29 000 t/y of nickel.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated post-tax net present value, at an 8% discount rate, of $401-million and internal rate of return of 20.1%.

Capital Expenditure
The project has a capital cost of $443-million, including $65.3-million in contingencies.

Planned Start/End Date
The RKEF plant and project infrastructure will be built over a 31-month period.

The company aims to start production in early 2021.

Latest Developments
The Araguaia project is steadily advancing towards construction, with Horizonte having completed the value engineering phase. This phase includes improvements made to the plant design and flow sheet to optimise the project’s operational performance.

The company is preparing key environmental and social programmes in preparation for the construction phase, while the financing for the project is also progressing.

The nickel price’s trading at $16 300/t against Araguaia’s base case modelling of $14 000/t bodes well for the project economics.

The project funding package for Araguaia involves multiple components that are being negotiated simultaneously.

Horizonte is engaging with several prospective investors and recently negotiated a nonbinding term sheet with a major cornerstone equity investor; reached an advanced stage with offtake agreements; received initial approval for a financing facility of up to R$200-million, or $32-million, from Banco da Amazônia; and is advancing workstreams with a syndicate of five international banks for the principal project finance package.

In parallel, Horizonte has spent the past eight months undertaking a phase of value engineering to upgrade the 2018 feasibility study and optimise certain aspects of the project to a level where it is implementation ready.

This work has included development of a detailed project execution and operational readiness plan as part of the value engineering phase.

These workstreams have further derisked the project and have provided clear visibility on how the company can deliver a successful, tier-one nickel project.

Owing to the ongoing impacts of Covid-19 and related implications for financial markets, the company expects to complete the full project financing package during the first half of next year, thereafter starting construction.

Key Contracts, Suppliers and Consultants
Ausenco Engineering Canada (process plant design).

Contact Details for Project Information
Horizone Minerals, tel +44 203 356 2901.
Tavistock, on behalf of Horizone Minerals, tel +44 207 920 3150 or email horizonte@tavistock.co.uk.