Horizonte Minerals plc said a 12.6% rise in costs along with engineering improvements would see total capital expenditure rise to U$537 million for its Araguaia nickel project in Brazil.
INFLATION
As at the end of September 2022, overall operations had progressed by 16% and engineering by some 71%.
Chief executive Jeremy Martin said that since breaking ground in May, the company had advanced the foundations of the furnace and rotary kiln and nearly completed earthworks ahead of the wet season.
In more than 375,000 hours worked no lost time injuries have been recorded.
Araguaia remains on schedule to deliver first nickel during Q1 2024.
Mr Martin added that global inflation and engineering improvements to de-risk operations had led to the increase in forecast capex from $477m originally budgeted in November 2021.
“However, through our rigorous focus on cost discipline we expect to be able to limit the increase to 12.6% which is broadly in line with the peak of the Brazilian inflation cycle earlier this year and we are now taking proactive steps to ensure that we have adequate access to capital through both equity and to enable first utilisation under the senior debt facilities, targeted for Q4 2022.
“I am also pleased to announce that we will be advancing the engineering work of the 2nd Line at Araguaia with the objective of producing an AACE class 3 capital cost estimate and advancing the design to basic engineering.
“As part of this work, we will look at the option of adding a nickel matte converter into the plant flowsheet providing the optionality to convert a portion of the FeNi output to nickel matte, a product that has the potential to be sold directly into the battery metal supply chain.
“The overall objective of this engineering work is to potentially fast-track Araguaia towards a ~29,000 tpa nickel producer.”
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