Can you give an overview of Horizonte Minerals’ Araguaia project?

Horizonte Minerals’ Araguaia project is located in the Carajas mineral province in the north of Brazil. The project is a nickel laterite deposit and was discovered by Horizonte Minerals around three years ago, while they were searching for iron ore potential in the region. They acquired the project from Teck Resources in 2010, which had a 41% share in the company. Horizonte Minerals has completed around 30,000m of drilling, released two resource statements, and finished a preliminary economic assessment. They are currently commencing a prefeasibility study with the aim of completing it by Q1 next year at the latest.

How has Horizonte Minerals advanced the Araguaia project since taking it over from Teck Resources?

When Horizonte Minerals took over the Araguaia project, there was no defined mineral resource. Since then, they have completed extensive drilling, released two resource statements, and finished a preliminary economic assessment. They have also conducted extensive metallurgical testing, working with Xstrata in Canada and a local group called IAGO in Brazil. Horizonte Minerals is currently commencing a prefeasibility study, with the aim of completing it by Q1 next year at the latest.

What type of process is Horizonte Minerals considering to extract nickel from the laterite ore at the Araguaia project?

Horizonte Minerals will use the same rotary kiln electric furnace process as Anglo American is using at Barro Alto, as the Araguaia project is a saprolite resource. This is a 60-year-old technology, and there are currently around 19 operating plants worldwide that use it. Vale was using a similar process at Onca Puma, but it has not been as successful as Barro Alto.

What is the mining regulation like in Para, Brazil, where the Araguaia project is located?

The mining code in Para is similar to many other states in Brazil, but the state is generally mining-friendly, and the majority of infrastructure developed there has been related to opening up the mining industry. The DNPM is still working, and Horizonte Minerals has passed a number of permitting milestones in the last two years. However, some of the new concessions that Horizonte Minerals is waiting for have been under lockdown, which is restricting future exploration work.

What is Horizonte Minerals’ timeline for production at Araguaia, and what is the mid-term vision for the company?

Horizonte Minerals’ aim is to complete the prefeasibility study for the Araguaia project by Q1 next year at the latest. After that, there will be a construction period of around 12 to 18 months. Horizonte Minerals is flexible about the project’s development and production, which could be done by Horizonte Minerals and Teck Resources, a third party, or a combination of both. There are also a number of options for the sale of the nickel produced at Araguaia, with potential markets in Brazil, the US, Europe, and China. Horizonte Minerals aims to enter into mid-to-long term supply contracts wherever they find the best deal. Brazil has two or three nickel projects being developed, and there will be a period of two or three years of oversupply as they reach capacity, but from 2016 or 2017 underlying demand will outstrip supply here.