Araguaia permits put Horizonte on track for first production in early 2024

Horizonte Minerals (TSX: HZM; AIM: HZM) is set to begin mining activities at its 100%-owned Araguaia nickel project in Brazil, now that it has state permitting approvals in hand.

The permitting approval by Pará State Secretariat for Environment and Sustainability (SEMAS) will allow the company to mine, stockpile and categorize ore to optimize the consistency of the feedstock ahead of the plant startup slated for next year.

Over the course of the next six months, the company will establish stockpiles of enough ore to feed the plant for the subsequent six months. The Pequizeiro pit, located 750 metres from the plant site, will be the primary source of ore to Araguaia, supplying the first two years of the project’s mine life and contributing over 50% of the mine production for the first 10 years.

“The approval allows ore to be mined and stockpiled with the aim of mitigating a key commissioning risk as part of our mine-to-mill strategy ahead of the plant startup next year,” said Jeremy Martin, CEO of Horizonte, in a release. 

The company began construction at Araguaia last May, with the aim of producing 29,000 tonnes of nickel a year mostly destined to supply the stainless steel market. Construction includes an open pit and a processing plant, which will produce ferronickel over an estimated 28-year period.

The build is expected to take two years, placing the mine on track for first production in early 2024.

As of the end of March, the initial phase of the project was 50% complete. During this phase, the Araguaia project will generate 14,500 tonnes of nickel metal a year, before a second production line comes on in 2027 to reach full capacity.

Horizonte recently noted that about 90% of capital spending has been awarded, amounting to around US$485 million.

By late morning, shares of Horizonte Minerals were up by 4% to $2.61 apiece, near its 52-week high of $2.67. The company’s market capitalization is estimated at $701.5 million.