Horizonte Minerals plc will reduce construction activities at its Araguaia nickel project while it tries to resolve lack of funds with senior lenders and cornerstone shareholders.
DISCUSSIONS
The company said it would progress only “critical work streams” while maintaining safety in order to manage resources and funds.
In October, Horizonte warned of at least a 35% increase in overall capital expenditure and a delay to first production at the site in northeast Brazil.
As of 10 November, the project had total liquidity sources of US$169 million comprised of $131m undrawn on the senior debt facility (subject to satisfying drawdown conditions) and $38m cash.
The funds should provide sufficient working capital to around mid-December 2023.
Positive outcomes from dialogue with suppliers along with other cash saving measures, or other financing solutions should provide sufficient working capital until late Q1 2024.
First production at Araguaia will depend on the result of funding discussions.
DUE DILIGENCE
Horizonte added it had hosted site visits during the past seven days for key shareholders and lenders’ representatives.
“These groups are undertaking their respective due diligence as part of a funding plan and expect to finalise their respective internal diligence processes in early Q1 2024 with funding completion targeted for late Q1 2024.
“It remains the company’s objective to put in place a financing solution which will satisfy the cost to complete requirements and thereby allow the company to continue to access its senior debt facility.”
Chief executive officer Jeremy Martin said that despite the expected increase in capital, Araguaia remained a tier-1 nickel project.
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