Nickel developer Horizonte Minerals has scaled up its fundraising following significant institutional demand in the bookbuild from existing and new investors.

The company on Tuesday announced a placing of £61.7-million (about $70-million), but a day later upsized that to £70.5-million (about $80-million) and scaled back allocations.

The participation by Luxembourg-based La Mancha, which has a near 20% shareholding in Horizonte, has been reduced from about £23.8-million ($27-million) to £22-million (about $25-million).

A total of 77 945 627 new ordinary shares in the capital of the company have been conditionally placed with, or subscribed for by, new and existing investors at the placing price. The incremental fundraise proceeds will be used for contingencies and general working capital purposes.

The fundraise shares will represent 40.9% of the issued ordinary share capital of the company prior to the fundraise.

Horizonte has also increased the capital expenditure (capex) guidance for its Araguaia nickel project, in Brazil, to $537-million – a 12.6% increase on the previous estimate. The higher capex cost is the result of inflationary pressures, combined with engineering improvements to derisk the operation.

“Unfortunately, we are not immune to global inflationary pressures and this, along with engineering improvements designed to de-risk the operation, has led to an increase in our forecast capital expenditures. However, through our rigorous focus on cost discipline we expect to be able to limit the increase to 12.6%, which is broadly in line with the peak of the Brazilian inflation cycle earlier this year, and we are now taking proactive steps to ensure that we have adequate access to capital through both equity and to enable first utilisation under the senior debt facilities, targeted for the fourth quarter,” said CEO Jeremy Martin.

The project remains on track to deliver its first nickel in the first quarter of 2024 with overall project progress of about 16% as of September 30, and site construction activities moving forward in accordance with the company’s planned construction schedule.

La Mancha partner and co-chief investment officer Vincent Benoit said that the investment group believed in the future of nickel as a critical metal in the clean energy transition.

“Since the initial investment, we have been pleased with the strength of the management team and, in particular, its efforts in keeping Araguaia’s construction timeline on schedule whilst also ensuring cost increases were kept to a minimum in this challenging environment. We look forward to positive updates as the project develops towards first production.”