Horizonte Minerals raises new cash to fast-track Araguaia nickel project in Brazil

Horizonte Minerals HZM , the AIM-quoted mineral exploration and development company working in Brazil, has raised £8.25m in share placing priced at 25p in response to what it called “institutional demand”. The Horizonte share price has jumped from 15p since the start of the year, reaching 31p at the end of January and was today trading down 2.7% at 27p.

Horizonte said it intends to use the proceeds of the placing to speed up the ongoing drilling programme at its flagship 100%-owned Araguaia Nickel Project which lies in the prospective Carajas mineral district of northern Brazil. The company is currently working towards the delivery of a maiden 43-101 resource in the first quarter of 2011 and completion of the current 8,000m drilling programme at the project. A second phase expanded exploration programme will be initiated at Araguaia to further test exploration targets within the project area and convert the high grade zones to the indicated resource category. Horizonte wants to define a 100m tonne resource with grades comparable to the other producing operations in the district. In addition to the resource drilling, metallurgical test work will be completed with the aim of initiating a preliminary economic assessment in the fourth quarter of 2011.

Jeremy Martin, Horizonte's chief executive, said: “Naturally we are delighted with the strong appetite that Horizonte has received for this £8.25m placement, which was oversubscribed, by both new and existing institutional shareholders. The funds raised will support the next stage of our growth strategy as we fast-track the resource development of our 100% owned Araguaia Nickel Project in the world class Carajas mining district in Brazil. We have been making solid progress on the current resource drilling programme, and have recently signed a Heads of Terms to acquire 100% of the Vila Oito and Floresta Nickel Projects, which will increase our landholding contiguous to Araguaia. The coming year is set to be an exciting time for the company as we advance both nickel and gold exploration projects in Brazil in association with our two major mining partners Teck Resources TCK and AngloGold Ashanti AU. With this in mind, I believe Horizonte has a solid platform to deliver strong growth, which will in turn further strengthen our investment case for 2011.”

Horizonte acquired Araguaia in August last year from Teck Resources in return for 50% of its shares. The company's strategy has been to combine Araguaia with its existing Lontra project in a move to create a 100m tonne resource with grades comparable to other world class projects in Brazil. Click here to read a Stockopedia interview with Horizonte's chief executive, Jeremy Martin. Last month it signed a Heads of Agreement for the acquisition of 100% of the Vila Oito and Floresta nickel laterite projects, which also lied in the Carajás mineral district.

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