[Trial mining at Araguaia. Source: Horizonte Minerals]
Horizonte Minerals (HZM ) a Brazil-focused nickel developer, announced this morning the successful completion of an equity fundraise totalling £70.5m.
Horizonte upsized the placing to £70.5m from the initial £61.7m announced yesterday following significant institutional demand, the company said. La Mancha Investments' participation was reduced from £23.8m to £22m. La Mancha currently holds a 19.9% interest in Horizonte, increasing to 23.21% post-placing.
A total of 77.9m new shares were placed by new and existing investors, representing 40.9% of the issued share capital of Horizonte. The placing was conducted by Peel Hunt and BMO Capital Markets, with Paradigm Capital acting as financial adviser. The placing price of 90.5p represents a discount to Horizonte's closing price of 97p on October 4th.
Jeremy Martin, CEO of Horizonte, and Simon Retter, a director of a subsidiary of the company and CFO, each agreed to subscribe for 27,624 shares at the placing price.
Admission to AIM and TSX of the fundraise shares is expected on or around 8 November 2022 following approval by shareholders.
Araguaia nickel project
Horizonte said net proceeds from the fundraise would be used to meet increased capital requirements for the construction of its Araguaia ferro-nickel project in Brazil, now up 12.6% to US$537m. The increase is due to global inflationary pressures and engineering improvements designed to de-risk the project, the company explained.
Additionally, Horizonte said the fundraise would enable it to accelerate engineering studies and basic engineering for the development of line 2 at Araguaia, as well as further invest in its decarbonisation strategy for the project.
Araguaia remains on schedule for first production in 1Q 2024.
Horizonte wholly owns the Araguaia nickel project and the Vermelho nickel-cobalt project, located in the south of the Carajas mineral district in northern Brazil. Nickel is a critical metal in the clean energy transition, with demand expected to rise significantly in the coming years.
Jeremy Martin, CEO, commented on the fundraise:
"I am pleased to announce the completion of the Fundraise. I would like to thank all existing shareholders for their continued support and welcome our new shareholders as we work towards first production at Araguaia in Q1 2024 and in parallel progress feasibility work at Vermelho. Significant progress has been made since we broke ground at Araguaia in May and we remain well positioned to transition into a scalable Tier 1 nickel producer. We look forward to updating the market as construction advances at Araguaia."
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