In July Teck Resources (NYSE:TCK) sold its Araguaia nickel mine in Brazil to Horizonte in return for a 50 percent stake in the company. Now Horizonte is preparing a share sale in Toronto to raise capital to fund the project.
Other financing options include offtake agreements with nickel refiners and bank financing.
The Araguaia project has an initial resource of 60 to 70 million tons, and should produce a minimum annual volume of about 25,000 tons.
Nickel demand has shot up recently, with supply not being able to meet demand for the first time in five months, according to the International Nickel Study Group. The mine should be ready to produce in about 4 years. Drilling began on October 18.
Official numbers concerning actual resources will be determined in 2011, where at that time production costs and more accurate volumes will be known.
Once Horizonte has Araguaia ready for construction, Teck has an option to acquire the remaining shares in the company.
Showing posts with label Araguaia. Show all posts
Showing posts with label Araguaia. Show all posts
Monday, October 25, 2010
Tuesday, July 27, 2010
Teck (NYSE:TCK) Gets Half of Horizonte (LON:HZM), Horizonte Gets Araguaia
Teck Resources (NYSE:TCK) (TSE:TCK) did something it had hoped it didn't have to, and that was to offload its Araguaia nickel project in Brazil.
They've done that now, as Horizonte Minerals (LON:HZM) acquired the nickel project for an extremely cheap 50 percent stake in the company by Teck. Tecks' stake includes the deal for Araguaia, but still a great deal for Horizonte.
Debts from the global recession and crisis brought Teck to a place where they've had difficulty paying off gigantic debts they owe, and which they couldn't attain refinancing for after acquiring Fording Canadian Coal Trust a couple of years ago.
Their loss is Horizonte's gain, as they are getting the assets at a price of 0.7 cents a pound of nickel in the ground, far below the average 3 cents a pound usually asked for.
There will be at least 100 million tons of resource in the deal, and a high probability of it reaching 150 million tons, and at the high end could even reach 200 million tons.
With a 50 percent stake in Horizonte, as least Teck is able to retain a position in nickel, something they wanted to be sure to do, and the reason they've held back on selling the promising asset.
They've done that now, as Horizonte Minerals (LON:HZM) acquired the nickel project for an extremely cheap 50 percent stake in the company by Teck. Tecks' stake includes the deal for Araguaia, but still a great deal for Horizonte.
Debts from the global recession and crisis brought Teck to a place where they've had difficulty paying off gigantic debts they owe, and which they couldn't attain refinancing for after acquiring Fording Canadian Coal Trust a couple of years ago.
Their loss is Horizonte's gain, as they are getting the assets at a price of 0.7 cents a pound of nickel in the ground, far below the average 3 cents a pound usually asked for.
There will be at least 100 million tons of resource in the deal, and a high probability of it reaching 150 million tons, and at the high end could even reach 200 million tons.
With a 50 percent stake in Horizonte, as least Teck is able to retain a position in nickel, something they wanted to be sure to do, and the reason they've held back on selling the promising asset.
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