Horizonte Minerals plc – Interim Results

Horizonte Minerals plc – Interim Results

Horizonte, the AIM and TSX quoted exploration and development company focused in Brazil, announces its results for six months to 30 June 2011.

Overview

  • Nickel and gold exploration and development company focused in Brazil with the support of two mining majors Teck Resources and AngloGold Ashanti
  • Fast-tracking development of flagship Araguaia nickel project - defined a maiden resource of 76.6 million tonnes grading 1.35% Ni
  • Consolidated land position around Araguaia nickel project via the acquisition of the Vila Oito and Floresta nickel projects - creating the potential for a 100Mt resource with grades comparable to other leading nickel projects in Brazil
  • Six drill rigs active on the resource drilling programme at Araguaia nickel project - programme due to be completed by Q4 2011 with the aim of upgrading the maiden resource
  • Commenced 3,000 metre diamond drilling programme at Falcao gold project in south Carajas, Brazil with partner AngloGold Ashanti
  • Strong cash position - £8.25 million fundraising completed January 2011 for the development of Araguaia nickel project
  • Successfully dual listed on the TSX in June 2011 - opening up North American capital markets and institutional following

 

The Chairman released the following statement on the results. Horizonte has ade exceptional progress in terms of developing its portfolio of nickel and gold assets in the world-class Carajas mining province in northern Brazil in the first half of 2011.  We have the support of two major mining companies; Teck Resources as a significant equity holder and AngloGold Ashanti as a JV partner. Both groups share our objectives of building resources and developing projects with economic production potential in the region.

During the period under review we have delivered a number of significant milestones,, at our flagship Araguaia nickel project in Brazil ('Araguaia') we defined a maiden resource of 76.6 million tonnes grading 1.35% Ni; consolidated our position within the Araguaia region via the acquisition of the Vila Oito and Floresta nickel projects; commenced a 3,000 metre drilling programme at our Falaco gold project with AngloGold; strengthened our balance sheet through a significant raising of £8.25 million; and successfully listed on the Toronto Stock Exchange in June 2011 which forms part of the overall growth strategy to see Horizonte gain enhanced market exposure in the North American capital markets.  

Since the acquisition of Araguaia we made progress in defining a maiden resource in March 2011, coupled with the recent fundraising we have been able to increase the number of drill rigs at Araguaia to six and expand the resource drilling  programme from an initial 8,000 metres, with the objective of upgrading the resource in Q4 2011.

Within the main target areas at Araguaia, there are a number of high grade zones as defined by intercepts received from the current drilling campaign which we have reported to the market.  Best intersections are detailed below:

  • PCA-DD-0586 - 18.6 metres grading 2.42% Ni
  • PCA-DD-0599 - 17.3 metres grading 2.25% Ni
  • PCA-DD-0528 - 10.4 metres grading 2.08% Ni
  • PCA-DD-0603 - 15.6 metres grading 1.97% Ni

These intersections are important as part of defining an Indicated resource over the higher grade portion the resource at Araguaia.

Post period end we finalised the acquisition of the Vila Oito and Floresta nickel laterite projects from Canadian-listed Lara Exploration Ltd which further consolidated our position around Araguaia.  The consideration equated to approximately C$2 million which was settled to be 8.5 million new shares in the Company being issued.

The Vila Oito target has a non-compliant NI 43-101 potential resource at a 1% Ni cut off of between 10 and 11Mt grading 1.3 to 1.4 % Ni.  The target represents the western extension of one of the principal target areas at Araguaia, from which we see immediate resource targets to follow up.  In addition, the Floresta target has a well-defined geochemical anomaly that also requires follow up work.  As part of the ongoing resource drilling programme these new areas will be evaluated with the aim of adding additional resources to the greater Araguaia project.

We intend to compile the upgraded resource for Araguaia in the fourth quarter of 2011. Other aspects of the project are also advancing, with initiation of various metallurgical testworks, community development, and environmental base line studies that will all contribute to the finalisation of the Preliminary Economic Assessment.  This study is being overseen by leading mining consultants Wardell Armstrong International Ltd. 

Horizonte has built a strong technical team around the Araguaia project led by Roger Billington.  The hard work of Chris Masurenko and the field teams is also acknowledged.  We have bolstered the team further with the appointment of Paul Nagerl as General Manager in Brazil to oversee the country activities and assist CEO Jeremy Martin in taking the Araguaia project along the value-added curve to PEA, Pre-Feasibility Study and subsequent Feasibility Study stages.  We look forward to meeting these milestones as the project develops and keeping the market informed of all developments of this major project.

It must be noted that Horizonte is neither a single project company nor a one commodity business.  In line with this, we have commenced drilling with our mining partners AngloGold at our Falcao gold project in northern Brazil.  An initial scout drill programme of 3,000 metres is testing the large gold-in-soil anomaly.  The aim of this programme will be to confirm the existence of a large alteration system along with presence of gold over a large area that requires further detailed drilling.  The results from this programme will provide further news flow in the coming months.

The regional US$5.3 million Santana programme with AngloGold is focussed on the generation of new gold projects in two regional areas in north and south Brazil.  New targets are being continually defined, followed up and reviewed.  We aim to have targets moving to a drill phase subject to results by early 2012.

We believe Horizonte's investment case is currently stronger than ever.  The current value of Horizonte at time of writing (share price circa 13p) values our nickel resource at some $0.020 per pound ignoring our gold projects.  Our peers still trade in the range of $0.06 to $0.10 per pound.  This positions Horizonte at a significant discount to the current market peer group.

In terms of corporate developments in 2011 we successfully listed the Company onto the main board of the TSX (TSX-HZM) which has created a greater market exposure for Horizonte where nickel laterites and Brazil as an exploration region are well understood.  In line with the TSX listing we have welcomed Bill Fisher to the Board.  Bill is a well known mining professional and has an extensive network in Toronto as a result of a number of transactions including the sale of Aurelian to Kinross for US$1.4 billion.

Finally, as Chairman and fellow shareholder of Horizonte I would like to extend my gratitude for the support we have received from our shareholders, and would also like to thank our excellent management team led by Jeremy Martin for its continued dedication as we progress as a leading exploration company in Brazil.

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