Nickel developer Horizonte’s financing efforts fail
London- and Toronto-listed Horizonte Minerals has failed to secure financing for its Araguaia nickel project, in Brazil, and is compelled to explore other options that may put shareholder value at risk.
The alternative scenarios will focus on protecting the interest of secured creditors and include raising financing at the subsidiary level, a sale of the project while in care and maintenance, the liquidation of the assets, or other options available under Brazilian laws.
“The board and management are extremely disappointed by the results of our effort to attract financing into the company,” said interim CEO Karim Nasr.
The company's endeavours to secure financing involved engaging with existing and potential investors globally, including more than 150 parties, with 39 parties entering into non-disclosure agreements. Despite commendation on the project's quality and the comprehensive work by the company's team, investors cited concerns regarding the nickel market environment, including low spot prices and near-term uncertainties.
Nasr highlighted the challenging market dynamics, particularly the unfavourable nickel market conditions driven by supply surplus from Indonesia.
In February, Horizonte reported that the Araguaia project would cost $1-billion, up from a previous $537-million budget. The cost review followed a decision last year to restrict the project to critical works.
Horizonte’s stock plunged 80% on the LSE to 50p a share on Monday.
Glencore holds 17.7% of the company's shares and is entitled to future supply from the mine.
Horizonte currently holds a cash balance of $16.2-million, excluding cash segregated for the development of the Vermelho project.
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