Horizonte Minerals (TSX: HZM) announced that it is arranging a senior secured project finance facility of up to US$325 million to fund the construction and development of its flagship Araguaia nickel project in Para state in Brazil.
A syndicate of five international financial institutions, including BNP Paribas, ING Capital LLC, Mizuho Bank, Natixis, and Société Générale, will act as the Mandated Lead Arrangers.
Araguaia will be the first of Horizonte’s projects to move to the construction phase. A feasibility study describes an initial production phase where about 900,000 tonnes per year of ore is treated in a rotary kiln electric furnace (RKEF) to produce about 14,500 tonnes per year of nickel contained in 52,000 tonnes per year of ferronickel.
“This debt facility will cover a significant portion of the pre-production capex required to complete the Stage 1 construction for Araguaia. We are targeting completion of the project financing package for the Project by the end of 2020,” said Horizonte CEO Jeremy Martin in a press statement.
Martin told media that Horizonte was in advanced discussions with Glencore (LSE: GLEN) and private equity firm Orion Resources Partners, amongst others, for equity and project financing.
The company was also in talks to supply nickel to stainless steel producers, primarily in Europe and North America.
The first stage of the project will cost a total of US$440 million, the company said, adding that it aims to start construction in early 2021.
Horizonte also owns the Vermelho property in Brazil — one of the largest and highest-grade undeveloped laterite nickel-cobalt resources in the world. According to the company, the project will generate $7.3 billion in total cash flow over 38 years.
The company has a C$100 million market capitalization.