Horizonte Minerals plc could sell its Araguaia nickel project in northeast Brazil, resulting in a loss for shareholders, after full funding talks failed.
NICKEL MARKET
The company added it had been unable to secure interest in the full financing needed, citing investors concerns over the nickel market.
Horizonte’s options now include raising financing at the subsidiary level, selling the project while in care and maintenance, liquidation of the project’s assets, or “other options available under Brazilian laws”.
“The company does not believe that any of these options are likely to recover any value for the company’s shareholders,” read a company statement.
Interim chief executive Karim Nasr added that the board and management were “extremely disappointed” by the results of their effort to attract financing.
“While we received commendation on the quality of the project and of the comprehensive work put together by the company’s team, and supportive attitude of the company’s creditors and cornerstone shareholders, the lack of prospects in a recovery of the ferro-nickel market considering Indonesian supply dynamics have impeded the confidence of investors in earlier stage projects with high capital intensity, including Horizonte.
“We regret the impact this outcome will have on our many stakeholders.”
Horizonte’s new management last year reassessed the project and announced earlier in 2024 that Araguaia needed £1 billion to complete, nearly double previous estimates.
As at 10 April 2024, the company had a cash balance of US$16.2 million, excluding cash segregated for the development of the Vermelho project.
The company’s discussions with existing and potential new investors aimed to restructure the group’s debt and find a fully funded solution for its 100%-owned project.
Horizonte said it had approached more than 150 parties at a global roadshow, including over 39 which entered into non-disclosure agreements, for debt and equity.
Discussions are due to continue with secured creditors and existing and new potential investors for a potential restructuring solution “to attempt to achieve some recovery value to our creditors”.