Horizonte Minerals says it is well funded to advance Araguaia project towards construction

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Horizonte Minerals PLC (LON:HZM) (TSE:HZM) has said it remains well-funded to advance its Araguaia ferronickel mine in Brazil towards being construction ready, highlighting a strong cash position of £13.6mln.

In its results for the three months to September 30, the nickel developer also said that the project financing process is continuing to progress with a number of key milestones delivered.

READ: Horizonte Minerals a ‘buy’ for Peel Hunt after broker starts coverage

These included a syndicate of five international financial institutions being mandated for a US$325mln senior debt facility to part fund the development of Araguaia.

Horizonte also highlighted the publication of the project’s inaugural sustainability report on August 17, adding that it has continued to support local communities around the project through the provision of food parcels and health and hygiene guidance in response to the pandemic.

The company also said the nickel market fundamentals “remain strong” and are expected to benefit from global stimulus measures, with the nickel price returning to its pre-coronavirus levels of around US$15,700 per tonne.

For the quarter, the pre-revenue company reported a pre-tax loss of £2.2mln compared to a £1.1mln loss a year ago, mostly due to increased finance costs.

In a note on Thursday, analysts at house broker Peel Hunt retained their ‘buy’ rating and 14p target price on the firm, saying the cash position had come in stronger than their forecast and overall the balance sheet “remains in good position relative to current cash outflows”.

Analysts at Shore Capital were similarly upbeat, saying the company’s cash “should be sufficient” to complete the financing package for the Araguaia project.

Shares in Horizonte jumped 4.7% to 6.3p in early trading.

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