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(HZM) Horizonte Minerals Share Chat

Discussion in 'General Share Chat (HZM)' started by Stabilo123, Feb 20, 2016.

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    EV’s will make nickel a once-in-a-generation investment opportunity, says BHP
    More EVs and more nickel in each of them will drive nickel demand through the roof, says the head of BHP’s Nickel West arm
    16th August 2019
    Barry FitzGerald

    More EVs and more nickel in each of them will drive nickel demand through the roof, says the head of BHP’s Nickel West arm. His forecast is great news for those juniors with large nickel deposits awaiting development, such as the Jaguar project just acquired by Centaurus from Brazilian giant Vale. Plus, Venturex’s $100m debt deal sets it up to become one of the few ASX-listed copper producers.

    The display of oomph at last week’s Diggers & Dealers conference in Kalgoorlie was not restricted to the gold stocks.

    The nickel stocks made sure of that, with none other than BHP leading the charge in a presentation by its Nickel West president, Eddy Haegel.

    Nickel West is the formerly unloved BHP unit that has come into its own in response to what Haegel described as a once-in-a-generation opportunity presented by the gathering nickel-rich battery boom.

    Haegel said that in addition to the rapid growth in electric vehicles sales, BHP expects nickel-in-vehicle demand to surge, driven by three factors.

    The first is batteries are becoming bigger to improve vehicle range and performance. Next, nickel-based cathodes are taking market share from non-nickel cathodes because they’re “simply better”.

    And finally, increasing nickel in battery chemistries increases energy density, delivering better performance and lower costs.

    “It is important to understand that a 60kwh NMC811 battery needs 9kg of cobalt, 11kg of lithium and a massive 70kg of nickel,” Haegel said.

    While stainless steel still accounts for about 70% of nickel consumption, batteries is the fast growing subset, to the point where EV’s alone could account for all of the current production in the late 2020s.

    Haegel sounded a note of caution about the here and now. While BHP thinks there is going to be a significant increase in global nickel demand, it is a case of not just yet.

    “We do not expect to see a meaningful impact on the nickel market from batteries until the mid – late 2020s. Only then, do we expect to see serious industry investment by Class 1 nickel producers,’’ Haegel said.

    “However, we will not rest waiting for that day to arrive. We are actively developing options to position ourselves for this once-in-a-generation opportunity.’’

    It is against that backdrop that the nickel price has been a strong performer of late. The current price of $US7.17/lb compares with the 2018 (calendar) average of $US5.95/lb, and the 2017 average $US4.72/lb.

    CENTAURUS METALS:

    Talking about once-in-a-generation opportunities, Centaurus Metals (CTM, trading at 0.9c for a market cap of $24m) has just seized one which gives it a ticket to the battery-led nickel party discussed above.

    In what was probably the most significant announcement by a junior at D & D, Centaurus made everyone sit up and take notice when it revealed it had struck an option deal to acquire the Jaguar nickel sulphide project in Brazil from Vale, no less.

    Jaguar comes with a foreign resource estimate of a near-surface 40.4mt grading 0.78% nickel for a total of 315,000t of contained metal across a cluster of deposits, with lots of exploration upside to boot.

    It is a lot of nickel for a company with a $24m market, particularly, as was mentioned here on May 31 when Centaurus was trading at 0.8c, its market value is pretty much covered by its Jambreiro iron ore project in Minas Gerais state.

    Assume long-term-term iron ore prices of $US60-$80/t, Jambreiro could be good for $A20-$A25m in pre-tax operating cashflow. But it is not in production and it has to be said its importance to Centaurus has been overwhelmed by Jaguar.

    Jaguar sits in the western portion of the Carajas mineral province and covers 30sqkm of land containing the known foreign resource estimate (based on 55km of diamond drilling by Vale) and at least four exploration targets.

    To complete the acquisition, Centaurus is up for a $US250,000 upfront cash payment, the transfer of its Salobo West copper-gold exploration tenements to Vale, two deferred payments totalling $US6.75m and a production royalty of 0.75%.

    Vale will have offtake rights (its Onca-Puma nickel mine is in the region) and importantly, preliminary metallurgical testwork by Vale has indicated a high-grade and quality nickel concentrate can be produced from Jaguar’s sulphide mineralisation.

    It is not a deal that would have been available to others as it reflects both Centaurus’ long-term commitment to Brazil and Vale’s interest in Salobo West, which is near its Salobo mine, its biggest copper operation.

    Centaurus hits the Eastern States next week to promote the Jaguar deal and assuming a good reception, raising some funds to get cracking on Jaguar’s near-term potential as an open-cut producer from higher grade sections of its resource base will a key talking point.

    VENTUREX:

    Venturex boss AJ Saverimutto had a good reason to be wearing a sharp suit at an investor lunch at the Palace Hotel on the opening day of the D & D conference.

    AJ had just announced Venturex (VXR, trading at 18c for a market cap of $54m) had locked away a $100m senior debt funding package with commodities trader Trafigura for its Sulphur Springs copper-zinc project in the Pilbara, 145km south of Port Hedland.

    The debt deal means that Sulphur Springs is pretty much on its way – once the equity component of the $169m capex project is locked away - to becoming Australia’s next base metals producer in an ASX market where leveraged investment opportunities for copper in particular are thin on the ground.

    As much as nickel is needed for batteries in the electric vehicle and the storage of renewable energy revolution, copper is even more so. About 80kg of the red metal is required for an EV alone, a fact that underwrites expectations that the world will be short about 4mpta of copper come 2025.

    Sulphur Springs’ high-grades – it nets out at about 3.3% copper equivalent – from five years of open cut mining, followed by five years of underground mining as the starting point, makes it a development for the times.

    Based on realistic metal price assumptions, the 1.2mtpa operation (easily expandable to 2mtpa on the conversion of exploration upside to additional resources/reserves) will generate revenue of about $209/t and a before-tax margin of $65/t.

    Multiply that out and Sulphur Springs is good for about $80m in average annual free cashflow, or $800m over the initial 10 year mine life. That’s why Venturex has been able to lock away the $100m in debt funding in a market where debt funding for projects held by juniors is virtually non-existent.

    Northern Star has been a supporter of the story since 2012 and is Venturex’s biggest shareholder with a 19.8% stake.

    AJ said a number of equity options would be looked at to complete the financing, including the possible introduction of a strategic partner who would be happy with Trafigura’s 100% offtake for the first 11 years, 50% thereafter.

    Broker valuations of the stock which pre-date the debt component of Sulphur Springs, a major de-risking event if there ever was one, were multiples of the current price.

    https://resourcesrisingstars.com.au...ce-generation-investment-opportunity-says-bhp
     
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    Speaking exclusively to ValueTheMarkets.com, Horizonte Minerals’ (LSE:HZM) CEO Jeremy Martin told us, “consensus long term nickel price forecasts are currently above US$16,000/ton. The demand picture for nickel is robust both from the traditional stainless-steel market and the evolving EV battery market. Additionally, we are seeing continued draw down in global nickel inventories with the LME levels currently at 142,000 tons, the lowest levels for the last 5 years.”

    As Martin put it to us, “nickel demand from EV batteries is set to grow by 30-40% a year, so this makes nickel the fastest growing battery raw material. EV battery and car manufacturers recognize one of the greatest challenges from a strategic supply point of view is nickel. There have been very few new nickel mines coming online in recent years and it takes on average 8-10 years to develop from exploration through to production. We expect that with demand at current levels, we are likely to see nickel prices higher in the mid to long term.”

    “Horizonte now has 100pc ownership of a nickel district, with over 280 million ton of resource (in the measured and indicated category), in one of the largest mining districts in Brazil, the Carajás district, which has good infrastructure, water, energy and skilled labour.
    This creates the potential for Horizonte to develop two mining centres within trucking distance of each other, the first, in the south at Araguaia, where we are developing a ferronickel operation to produce around 14,500 tons of nickel with the Stage 1 plant expandable to 29,000 tons of nickel per year. The second production centre in the north, at the Vermelho nickel cobalt project which has the capacity to produce 15,000 to 18,000 tons per year of nickel and associated cobalt into the EV battery market.
    Work on Araguaia is focused around advancing the project finance and the recruitment and selection of the project development team as we move towards construction.
    The pre-feasibility study on the Vermelho nickel-cobalt project is at an advanced stage and is currently being finalised. We aim to announce the PFS to the market later this quarter, providing investors with exposure to the fast-growing electric vehicle battery metals market.”

    https://www.valuethemarkets.com/wp-...08/VTM-Market-Dispatch-Horizonte-Minerals.pdf
     
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    Glencore-backed Canada cobalt refinery aims for first production by late 2020

    The refinery that TSX-V-listed First Cobalt plans to bring back to life in Canada with funding by global mining group Glencore, is set for first production late next year, the junior company said on Monday, announcing that it had entered into a definitive financing agreement with Glencore.

    The Swiss-headquartered major will be providing First Cobalt with a $5-million loan to complete advanced engineering, metallurgical testing, field work and permitting associated with a recommissioning and expansion of the refinery, in Ontario.

    A request for proposal process for the feasibility study, metallurgy and environmental work has started, with a view to get field work under way in September.

    Upon completion of a positive definitive feasibility study for a 55 t/d refinery expansion in the first quarter of next year and subject to certain other terms and conditions and satisfaction of conditions precedent, Glencore would advance an additional $40-million to recommission and expand the refinery.
    [​IMG]
    The project will be undertaken in phases, with the first phase assessing the suitability of the First Cobalt refinery to treat Glencore material under a long-term supply agreement to produce cobalt sulphate for the North American electric vehicle market will be tested. Phase 2 of the work plan envisions a recommissioning of the refinery at 12 t/d in late 2020 and Phase 3 is an expansion to 55 t/d in 2021 using the existing site buildings and infrastructure.

    A scoping study previously estimated that if the First Cobalt Refinery operated at 55 t/d, it could produce 5 000 t/y of contained cobalt in sulphate assuming cobalt hydroxide feed grading 30% cobalt.

    “Subject to the results achieved over the next six months, both parties would like to target first production in late 2020 and then commission an expanded 55 t/d facility in 2021. Cobalt prices have increased considerably over the past few weeks and the outlook for the electric vehicle market remains exceptionally strong,” said First Cobalt president and CEO Trent Mell.

    Prices for the battery metal have risen sharply since Glencore announced earlier this month it would close its Mutanda mine in the Democratic Republic of Congo.

    Last month, First Cobalt signed a term sheet with Glencore outlining the framework for a non-dilutive, fully funded, phased approach to recommission the First Cobalt refinery, subject to due diligence and other conditions that have now been satisfied. [​IMG]

    https://www.miningweekly.com/articl...-for-first-production-by-late-2020-2019-08-26
     
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    NEWS RELEASE

    29th August 2019


    HORIZONTE ANNOUNCES US$25 MILLION ROYALTY FUNDING WITH ORION MINE FINANCE FOR THE DEVELOPMENT OF ITS ARAGUAIA PROJECT


    Horizonte Minerals Plc, (AIM: HZM, TSX: HZM) ('Horizonte' or 'the Company') the nickel company focused in Brazil, which is developing the Araguaia project as Brazil's next ferro-nickel mine and advancing the Vermelho nickel cobalt project for the electric vehicle battery market, is pleased to announce that it has signed a royalty agreement with Orion Mine Finance ('Orion') to provide funding to advance its Araguaia ferro-nickel Project ('Araguaia' or 'the Project').

    Highlights:

    · Orion will provide an upfront cash payment of US$25 million in exchange for a 2.25% royalty on the Araguaia Project.

    · The Royalty only applies to the first 426,429 tonnes of contained nickel within the final product (ferronickel) produced and sold. This is equivalent to the nickel production estimated over the life of mine for Araguaia in the Stage 1 Feasibility Study.

    · Orion has a strong track record in financing successful mining construction projects and has deployed approximately US$1.5 billion in royalties, streams, debt and equity over the past 3 years.


    Philip Clegg, Portfolio Manager at Orion Resource Partners said, "Orion is delighted to become a major investor in Araguaia, one of the leading nickel development projects globally. We look forward to supporting Horizonte as it enters the next phase of development of its world-class portfolio of nickel assets."


    Jeremy Martin, Chief Executive of Horizonte, commented, "We are extremely pleased to secure this royalty agreement with Orion, which enables us to build out our owner's team, advance engineering and early works packages as we proceed to the start of full construction at Araguaia. This royalty financing is non-dilutive for shareholders, and has been pre-designed to be compatible with the project funding package. Nickel has been an outstanding performer this year, currently trading almost 50% higher than at the start of 2019. At current nickel prices of US$15,500/t, the Araguaia Feasibility Study Stage 1 returns an NPV of more than US$580 million.


    Orion is one of the largest mining finance groups in the marketplace with approximately $5.1 billion under management. We look forward to working with their team as the Araguaia project advances through to construction."


    Analyst conference call and presentation

    Horizonte will host an analyst conference call and presentation today, 29 August 2019, at 10:00AM BST. Participants can access the call by dialling one of the following numbers below approximately 10 minutes prior to the start of the call.

    UK Toll-Free Number: 08003589473

    UK Toll Number: +44 3333000804

    Pin: 68052152#

    The presentation will be available for download from the Company's website www.horizonteminerals.com or by clicking on the link below:

    https://www.anywhereconference.com?Conference=301297991&PIN=68052152&UserAudioMode=DATA


    A recording of the conference call will subsequently be available on the Company's website
     
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    Papua New Guinea may close Chinese-owned nickel plant after spill - regulator

    29TH AUGUST 2019

    BY: ESMARIE IANNUCCI
    CREAMER MEDIA SENIOR DEPUTY EDITOR: AUSTRALASIA

    MELBOURNE - A nickel processing plant owned by Metallurgical Corp of China (MCC) that spilled mine waste into Papua New Guinea's Basamuk Bay faces compensation claims and possibly closure, the head of the country's mining authority said on Thursday.

    MCC's Ramu nickel plant located in Madang, on the country's northeastern coast, spilled waste into the bay over the weekend which caused the surrounding ocean to turn red and left a muddy residue on the rocky shoreline, according to locals and photographs of the incident.

    https://www.miningweekly.com/articl...fter-spill---regulator-2019-08-29/rep_id:3650

    Ramu produced a record 35,355 tonnes of nickel and 3,275 tonnes of cobalt in concentrate according to Canada-listed Cobalt 27 Capital which holds an 8.6% stake in the operation, and rights to some supply. The company’s Managing Director Anthony Milewski declined to comment on the incident.
    https://uk.reuters.com/article/uk-p...waste-into-papua-new-guinea-bay-idUKKCN1VI0W4
     
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    Daily Mail 30/08/19
     
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