Horizonte Awarded Power Utilisation Permit for the Araguaia ...

LONDON, July 08, 2019 (GLOBE NEWSWIRE) -- Horizonte Minerals Plc, (AIM: HZM, TSX: HZM) (‘Horizonte’ or ‘the Company’), the nickel development company focused in Brazil, is pleased to announce that it has been awarded the Energy Decree for its 100% owned Araguaia Ferronickel Project (‘Araguaia’ or ‘the Project’) in Brazil. The Energy Decree (Portaria de Energia) was awarded to the Company by the Brazilian Ministry of Mines and Energy.

Highlights:

• The Energy Decree guarantees Horizonte access to the national grid with the required electrical energy demand for the commercial ferronickel operation; 
• Engineering studies advancing for the transmission line with the National Agency of Electric Energy (Agência Nacional de Energia Elétrica – ANEEL); 
• In parallel with this process Horizonte submitted the combined Preliminary Licence and Construction Licence application for the powerline to the Brazilian Pará State Environmental Agency (‘SEMAS’) in mid-June; and 
• The receipt of the Energy Decree follows a number of key permitting milestones for the Araguaia project, including the award of the water permit for full-scale operation in April 2018 and the Construction Licence early 2019.

Jeremy Martin, Chief Executive of Horizonte, commented:

“I am pleased to announce the award of the Energy Decree for the Araguaia Ferronickel Project. This is another key permit as we move towards the implementation phase. The availability of energy for mining projects is a risk in many countries, and this Decree guarantees the Company has access to the grid for the full-scale Stage 1 commercial operation with nameplate capacity of 14,500 tonnes of nickel per year.

“Elsewhere we continue to advance the project financing (PF) on Araguaia, working together with Endeavour Financial, with positive interest shown from a number of international banks regarding a PF syndicate. Discussions are also underway with a number of groups on product marketing and offtake.

“The nickel market fundamentals continue to move in the right direction with nickel inventories on the London Metal Exchange down to around 160,000 tonnes today and with continued growth drivers on the demand side from stainless steel and the electric vehicle battery market. We look forward to providing further updates as we move into the second half of the year.”

Further Details

Energy Decree

The Energy Decree (Portaria de Energia) was awarded to the Company by the Brazilian Ministry of Mines and Energy. The Decree guarantees the Company access to the national power grid, with power connection at the Xinguara Municipal’s substation. The approval also guarantees the energy required for the commercial operation of the Rotary Kiln Electric Furnace (RKEF) process facility at around 80 Megawatt hour (Mwh).

The 230kV electrical transmission line serving the project will draw from a substation in Xinguara, connecting with Araguaia’s own substation to be constructed beside the future RKEF plant.

The Company is now advancing engineering studies for the transmission line with the National Agency of Electric Energy (Agência Nacional de Energia Elétrica – ANEEL).

Transmission Line Preliminary Licence and Construction Licence

The Company worked with Brandt Consultants (‘Brandt’), a leader in Brazil in this field, together with EcoNorte to complete the Preliminary Licence and Construction Licence workstreams for the powerline. 

Brandt won the CEMIG three-year contract to permit over 50 electric units throughout Brazil, including 13 hydroelectric plants and two thermoelectric plants. In addition to this, Brandt also successfully permitted a number of transmission lines for mines located in the Pará state. Brandt currently provides environmental services to the S11D iron ore project operated by Vale, with a team located in the Carajás Mining District (CMD), north of Araguaia.

Brandt conducted a number of phases of work throughout 2018-2019 including:

• Integrated optimisation of the transmission line route working together with SM&A Engineering;
• Environmental Control Plans;
• Flora inventories and fauna studies;
• Socio-economic studies;
• Physical environmental studies; and
• Visits by physical, biological and social analysts to site.

All work is compliant with Brazilian CONAMA environmental legislation standards and is in accordance with SEMAS Terms of Reference for the Araguaia Transmission Line.

About Araguaia

The wholly owned Araguaia Project is located in the south-east of the Brazilian state of Pará, approximately 760 km south of the state capital Belém.

The Project involves the development of an open pit nickel laterite mining operation that will mine 27.5 million tonnes (‘Mt’) Mineral Reserve of a 119 Mt Mineral Resource to produce 52,000 tonnes of ferronickel (‘FeNi’) (containing 14,500 tonnes of nickel) per year, for the 28-year mine life. The metallurgical process comprises a single line RKEF to extract FeNi from the laterite ore. The RKEF plant and project infrastructure will be constructed over a 31-month period. After an initial ramp-up period, the plant is expected to reach full capacity of approximately 900,000 tonnes of dry ore feed per year.

The FeNi product will be transported by road to the port of Vila do Conde for sale to overseas customers.

Based on the FS results published in October 2018, the economic analysis indicates a post-tax NPV of US$401 million and an IRR of 20.1% using the base case forecast of US$14,000/t Ni. This increases to US$740 million and 28.1% when using Consensus price of $16,800/t Ni.