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Horizonte Minerals PLC on Monday said it was advancing discussions with cornerstone shareholders and lenders as it confirmed construction progress continues to be made at Araguaia nickel project in Brazil. The London-based nickel development company said earlier this month that a number of factors have led to increased costs around the main electromechanical erection contract and increased duration on delivery schedule. These changes require additional financing resulting in an expected increase in the overall project capital requirement by at least 35% from the current capital expenditure budget of $537 million. It will also delay first production to the third quarter of 2024. The firm said as of September 30, $429 million has been spent on construction at Araguaia, with $215 million drawn down from its senior secured project finance debt facility of $346 million. At the same time, the firm said it had total liquidity sources of $253 million comprised of $131 million undrawn on the senior debt facility and a group cash position of $122 million. Of the cash position, $93m relates to the project to cover current construction activity and working capital. This includes the full draw down on the cost overrun facility of $25 million as well as $5 million cost over run equity. With the estimated increase in overall project capital, the company is working on a financing solution to solve the funding gap. The objective is 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. Reta Engenharia has been retained to complete a detailed capital cost and schedule analysis which is expected to be completed by the middle of the fourth quarter. Shares in Horizonte Minerals closed up 2.8% at 18.25 pence in London on Monday. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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