Horizonte Minerals Plc, a nickel development company focused in Brazil, is developing the Araguaia project as Brazil’s next ferro-nickel mine and advancing the Vermelho nickel-cobalt project for the electric vehicle battery market.
The company recently stated that it has signed a royalty agreement with Orion Mine Finance to provide funding to develop its Araguaia ferro-nickel Project (“Araguaia” or “the Project”).
- An upfront cash payment of US$25 million will be offered by Orion in exchange for a 2.25% royalty on the Araguaia Project.
- The Royalty only applies to the initial 426,429 tons of contained nickel within the end product (ferronickel) manufactured and sold. This is equal to the nickel production projected over the life of mine for Araguaia in the Stage 1 Feasibility Study.
- Orion has a robust track record in financing fruitful mining construction projects and has deployed about US$1.5 billion in royalties, debt, streams, and equity over the last three years.
Orion is delighted to become a major investor in Araguaia, one of the leading nickel development projects globally. We look forward to supporting Horizonte as it enters the next phase of development of its world-class portfolio of nickel assets.
Philip Clegg, Portfolio Manager, Orion Resource Partners
Jeremy Martin, Chief Executive of Horizonte Minerals said: We are extremely pleased to secure this royalty agreement with Orion, which enables us to build out our owner’s team, advance engineering and early works packages as we proceed to the start of full construction at Araguaia. This royalty financing is non-dilutive for shareholders, and has been pre-designed to be compatible with the project funding package. Nickel has been an outstanding performer this year, currently trading almost 50% higher than at the start of 2019.
At current nickel prices of US$15,500/ton, the Araguaia Feasibility Study Stage 1 returns an NPV of more than US$580 million. Orion is one of the largest mining finance groups in the marketplace with approximately $5.1 billion under management. We look forward to working with their team as the Araguaia project advances through to construction.
Jeremy Martin, Chief Executive, Horizonte Minerals