Horizonte Minerals HZM 2

Horizonte Minerals (HZM.TO, LON:HZM) has released the a resource estimate on the limonite zone of its Araguaia nickel project in Brazil. The measured and indicated resource now contain almost 21 million tonnes of rock at an average grade of 1.13% nickel and 0.12% cobalt. That’s in excess of half a billion pounds of nickel and 56 million pounds of cobalt, for a total in situ value of in excess of $4B, and with a rock value of approximately $200/t (before applying a recovery rate and payability ratio). An additional 2.8 million tonnes is part of an inferred resource estimate, containing an additional 67 million pounds of nickel and 6.6 million pounds of cobalt.

Horizonte Minerals HZM

This limonite zone could add a lot of value to the Araguaia project as the zone would be mined anyway, but according to the original mine plan, it would be stockpiled as ‘waste’, as the limonite cannot be processed using RKEF. Indeed, a new processing plan will have to be developed for the limonite zone, but as the rock will be mined anyway, the capex will remain limited to just a new plant whilst the additional opex per tonne will just be the processing cost (as the mining expenses will already have been incurred as part of the ‘real’ Araguaia mining operation).

Horizonte plans to publish a feasibility study by the end of this year or early 2018, whilst it’s simultaneously thinking about how it could monetize the limonite zones as well. Meanwhile, Horizonte has also filed its mine construction licence application to the Para state authority.

Go to Horizonte’s website
The author has no position in Horizonte Minerals. Please read the disclaimer

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