Horizonte Minerals plc said it had acquired certain new and unused ferro-nickel processing equipment for approximately US$7 million for its project in Araguaia, Brazil.
VENDORS
The company’s subsidiary Araguaia Niquel Metais Ltda (ANM) entered into an asset purchase agreement with Companhia Brasileira de Alumínio (CBA), which is controlled by industrial and financial investment holding company Votorantim SA.
EQUIPMENT
The equipment comprises the key components of a conventional rotary kiln electric furnace plant (RKEF), excluding the furnace.
Designed and manufactured by international vendors with similar capacity and technical specifications to Araguaia, the equipment is already in Brazil at CBA’s Niquelândia operations.
Horizonte said it was evaluating the use of selected components as spares and back up as part of the development of the first RKEF line.
It could also use some of the large-scale equipment, including the rotary kiln, to fast track and lower the cost of development of a second RKEF line.
CONSIDERATION
The agreement includes $600,000 in cash on signing with a total potential consideration of up to $7,000,000, with the balance payable upon the achievement of future milestones related to the development and operation of Araguaia.
TRANSFORMATIONAL
Chief executive Jeremy Martin added that the company aimed to reach 28,000 tonnes of nickel per year at a lower development cost.
“We expect to be able to realise significant savings on our planned development costs given the low cost acquisition of this high quality equipment relative to the original purchase cost of approximately US$60 million.
“Today’s news follows the announcement of the US$633 million funding package for the development of the first RKEF line at Araguaia.
“Fully funding phase one of the project is transformational for Horizonte and the ability to fast-track phase two highlights our ambition to become a globally significant nickel producer.
“The execution of construction of the first RKEF line is our priority, but I believe this is a significant step in realising our vision for the full potential at Araguaia.”