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Horizonte Minerals Proposes USD633m Package to Finance Brazil’s Araguaia Nickel Mine

23 November 2021

(Proactive) Horizonte Minerals agreed to provide a USD633m package to fund the construction of the Araguaia project, a nickel mine in Brazil. The package comprises USD197m in equity; USD65m in convertible notes; a USD25m cost overrun debt facility; and a USD346.2m proposed senior debt facility.

announced that it has initiated investment and subscription agreements as part of a comprehensive funding package of US$633 million, which will be funding the construction of Araguaia — a high-grade nickel project situated south of the Carajas Mining District in Brazil.

The London-based company told its investors that the development of Araguaia will provide Horizonte with a platform for growth in an established mining region, with the potential to become a significant nickel producer of scale.

“We are delighted to announce the proposed funding package which, subject to satisfaction of the conditions and successful completion of the placing, is expected to fully fund Araguaia into production,” said Jeremy Martin, CEO of Horizonte, in a release.

He added: “We are aiming to become a leading nickel producer. We believe the terms of the financing package and caliber of the lenders and strategic investors we have attracted is a testament to the strong project fundamentals offered by Araguaia.”

The proposed funding package would comprise of US$197 million equity fundraise; US$65 million as convertible loan notes issue; US$25 million cost overrun debt facility; and US$346.2 million proposed senior debt facility.

In addition, the mining company said that it is also planning to raise up to US$8 million through an open offer to holders. 

Among the listed strategic plans, La Mancha and Orion have signed up as strategic investors and shareholders. 

La Mancha has subscribed for approximately US$75 million in equity and US$15 million of convertible notes. Meanwhile, Horizonte issued shares worth US$50 million to Orion.

Orion has also subscribed for US$50 million of convertible notes.

“We are delighted to welcome La Mancha and Orion as new and existing, respectively, strategic investors and shareholders in Horizonte, and also grateful for the continued support of Glencore who, in addition to their proposed cornerstone subscription, have also extended their relationship with Horizonte by agreeing to enter into the Offtake Agreement,” said Martin.

Martin noted that La Mancha and Orion have long track records of creating sustainable shareholder value in the mining sector and “their previous investments highlight their ability to identify compelling growth opportunities at an early stage.”

“The proposed investments from La Mancha, Orion, and Glencore, alongside the proposed senior debt facility from a syndicate of leading international financial institutions, provides strong endorsement of our broader corporate strategy,” Martin concluded.