Construction activities at Horizonte Minerals’ flagship Araguaia project have been scaled back, as the company continues to seek a financing solution for the nickel project.
Only critical work streams are advancing at this stage, CEO Jeremy Martin said on Tuesday.
The Araguaia project, in Brazil, has total liquidity resources of $169-million, comprising of $131-million undrawn on the senior debt facility and a cash position of $38-million. This should provide sufficient working capital to about mid-December.
The key shareholders and lender representatives who visited Araguaia this past week were preparing their respective due diligence as part of a funding plan, but that would only be completed in early 2024 and financing could be forthcoming late in the first quarter, the company noted.
“While work on the funding solution continues, we have elected to focus capital and human resources on the critical work packages. This work is planned to ensure that we are well-positioned to resume full construction activities post receipt of the funding to benefit stakeholders and our community alike,” said Martin.
The Araguaia project is facing a cost increase of at least 35% from the current capital expenditure budget of $537-million and a delay of first production to the third quarter of next year.