Brazil-focused nickel developer Horizonte Minerals (AIM: HZM) (TSX: HZM) is set to begin mining activities at its 100%-owned Araguaia project following its permit approval by the Pará State Secretariat for Environment and Sustainability (SEMAS).
The SEMAS approval enables the company to mine, stockpile and categorize ore, optimizing the consistency of the feedstock, a process required to mitigate risk during commissioning which is a key part of the mine-to-mill strategy, Horizonte stated in Thursday’s news release.
Over the course of the next six months, stockpiles will be established, with sufficient ore to feed the plant for the subsequent six months. The Pequizeiro pit, located 750 metres from the plant site, will be the primary source of ore to Araguaia, supplying the first two years of the project’s mine life and contributing over 50% of the mine production for the first 10 years.
Jeremy Martin, CEO of Horizonte, said the approval to begin mining activities at Araguaia represents another important milestone for Horizonte. “The approval allows ore to be mined and stockpiled with the aim of mitigating a key commissioning risk as part of our mine-to-mill strategy ahead of the plant start-up next year.”
The company began building the Araguaia mine operation over a year ago, with the aim of producing 29,000 tonnes of nickel a year mostly destined to supply the stainless steel market. Construction includes an open pit and a processing plant, which will produce ferronickel over an estimated 28-year period.
The construction is expected to take two years, placing the mine on track for first production in early 2024.
As of the end of March 2023, the initial phase of the project was 50% complete. During this phase, the Araguaia project will generate 14,500 tonnes of nickel metal a year, before a second production line comes on in 2027 to reach full capacity.
Horizonte recently noted that about 90% of capital spending has been awarded, amounting to around $485 million.
By 11:35 a.m. EDT Thursday, shares of Horizonte Minerals shot up by 4.0% to C$2.61 apiece, near its 52-week high of C$2.67. The company’s market capitalization is estimated at C$701.5 million.
