LONDON, Aug. 3, 2016 /PRNewswire/ – Horizonte Minerals Plc, (AIM: HZM, TSX: HZM) (‘Horizonte’ or ‘the Company’) the nickel development company focused in Brazil, is pleased to announce the transfer to a wholly-owned subsidiary of the Company of the remaining two licences that make up the Glencore Araguaia nickel project (‘GAP’) in north central Brazil. This completes the licence transfer under the agreement (‘Asset Purchase Agreement’) to acquire GAP from Xstrata Brasil Exploraçâo Mineral Ltda (‘Xstrata’), a wholly owned subsidiary of Glencore, as announced by the Company on 28 September 2015.
- The closing of the transaction completes the consolidation of GAP and Horizonte’s Araguaia Project creating one of the largest nickel saprolite projects globally
- The transfer includes the advanced Serra do Tapa nickel deposit
- Combined projects currently the focus for a new Pre-Feasibility Study due for completion in Q3 2016
Commenting on the closing of the transaction, Horizonte CEO Jeremy Martin said, “I am very pleased to announce the closing of the transaction with Glencore. The purchase of the GAP project and consolidation with our existing Araguaia project creates one of the highest grade saprolite nickel projects globally. We are in the final stages of completing a new Pre-Feasibility study on the combined project with the aim of demonstrating that Araguaia will sit on the lower end of the global cost curve and the upper end of the grade curve with low capital intensity.
In short our aim is to develop one of the lower cost ferronickel operations with short capital repayment, while offering operational flexibility for increased nickel production in the future. Following the PFS, the next major milestone on the project will be the full Feasibility Study which is scheduled to commence later this year. This should run in parallel with an improvement in the global nickel markets, prices have increased over the last three months lifting from the multi-year lows seen in Q1 2016.”
Following the registration by the National Department of Mineral Production of Brazil (‘DNPM’) of the transfer of the outstanding GAP licences from Xstrata to a wholly-owned subsidiary of the Company and pursuant to the Asset Purchase Agreement, Horizonte has now completed the second and final allotment to Xstrata of Initial Consideration Shares.
Further to the above, the Company has issued and allotted 50,729,922 new Ordinary Shares to Xstrata, being the Consideration Shares equivalent in value to US$1,340,000. These closing Initial Consideration Shares were issued at a price of 1.99 pence (the ‘Issue Price’). In accordance with the terms of the Asset Purchase Agreement the Issue Price was equal to the five day weighted average price per Ordinary Share on AIM, taken on the business day when the transfer of the remaining GAP licences was confirmed, and converted at a rate of exchange as set out in the Asset Purchase Agreement.
This allocation of shares signifies the completion of the issuance of the Initial Consideration Shares to a total value of US$2,000,000. Initial Consideration Shares were previously issued under the Asset Purchase Agreement to the value of US$660,000 in November 2015 following transfer of the first GAP licence.
The issue of the new Ordinary Shares is being made from existing authorities granted to the Directors at the general meeting held on 25 November 2015. Accordingly, the issue and allotment of the new Ordinary Shares is not subject to shareholder approval.
Application has been made for the admission of the 50,729,922 new Ordinary Shares to trading on AIM and it is expected that such admission will take place on 8 August 2016 (‘Admission’). The new Ordinary Shares will rank pari passu with the existing Horizonte Shares currently in issue. Following Admission, there will be 721,934,300 Horizonte Shares in issue.
The commercial terms of the Asset Purchase Agreement are as announced by the Company on 28 September 2015.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
About Horizonte Minerals:
Horizonte Minerals plc is an AIM and TSX-listed nickel development company focused in Brazil, which wholly owns the advanced Araguaia nickel laterite project located to the south of the Carajas mineral district of northern Brazil. The Company is developing Araguaia as the next major nickel mine in Brazil, with targeted production by 2019.
The Project, which has good infrastructure in place including rail, road, water and power.
Horizonte has a strong shareholder structure including Teck Resources Limited 28.1%, Henderson Global Investors 17.0%.
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