Name of the Project
Araguaia nickel project.

Location
The project is located on the eastern margin of the state of Pará, in north-eastern Brazil, to the north of the town of Conceição do Araguaia.

Client
Horizonte Minerals.

Project Description
Araguaia has proven and probable reserves of 24.6-million tonnes grading 1.77% nickel and comprises the Araguaia nickel project area (HZMA) and the Glencore Araguaia project (GAP) area.

The project is based on a 28-year life-of-mine producing about 14 500 t/y of nickel in ferronickel from a single-line rotary kiln electric furnace (RKEF) plant.

The prefeasibility study (PFS) has proposed openpit mining for the exploitation of nickel laterite to establish the production of run-of-mine from eight openpits (seven for HZMA and one for the GAP) to supply a targeted 900 000 t/y of ore to a processing and smelter facility. This facility will use the proven RKEF process, with the product being sold at free-on-board at the selected port of export. 

Overall nickel recovery has been estimated at 93%.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
The project has a post-tax net present value (NPV), at an 8% discount rate, of $581-million at a nickel price of $14 000/t and an NPV of $328-million at a nickel price of $12 000/t of nickel. 

A post-tax internal rate of return of 26.4% at $14 000/t of nickel and 19.3% at $12 000/t nickel has been estimated. 

Value
Total preproduction capital costs are estimated at $353.5-million.

Duration
Production is expected to start in 2017.

Latest Developments
Horizonte has announced the complete results of the 30-hole pre-excavation drilling programme on the project.

The aim was to define an area with near surface transition and saprolite mineralisation that will be representative of the first five to eight years of mine life. The drill results have demonstrated this as well as the high-grade nature of the nickel mineralisation that has been drill-defined across the project.

The next stage is the trial excavation programme over this area, which is under way. It targets the removal of about 20 000 t of ore down to a depth of about 14 m using two 35 t excavators and four 35 t trucks.

Further updates on this work stream will be provided as they become available.

Meanwhile, Horizonte awarded the contract for the feasibility study for the Araguaia project in March this year to Worley Parsons Group to undertake the process engineering; Snowden Mining Industry Consultants to undertake the mine planning, mineral resource estimate, and the reserve estimate; and Environmental Resources Management (ERM) to undertake the hydrogeology and the environmental and social permitting.
 
Other specialised consulting groups have been appointed for additional sections of the feasibility study, including groups involved in the PFS.

The feasibility study is expected to be completed by the end of 2017.

Key Contracts and Suppliers
Worley Parsons Group (process engineering); Snowden Mining Industry Consultants (mine planning, mineral resource and the reserve estimate and ERM (hydrogeology and the environmental and social permitting).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Horizonte Minerals, tel + 44 207 763 7157 or email info@horizonteminerals.com.