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*The above NPV Calculator is based on the Araguaia nickel project Feasibility Study, including Phase 2 expansion results published 43-101 report filed on SEDAR in December 2018.

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Developing the next major nickel project in Brazil
Araguaia and Vermelho nickel project locations, Brazil

The Araguaia Nickel Project

Horizonte is developing its 100% owned Araguaia Nickel Project (Araguaia) as Brazil’s next major ferronickel mine. Araguaia is a Tier 1 mining project with a high-grade scalable resource, located south of the Carajás Mining District in the Pará State, north east Brazil. The area has a well-developed infrastructure, including roads, rail, and hydroelectric power as a result of the sustained mining activity in Carajás.

In August 2019, Horizonte Minerals entered a $25M royalty agreement with Orion Mine Finance which will provide the initial capital investment to commence the early works programme and the capital to advance Araguaia to construction.

The Base Case and the Stage 2 Expansion Case for the Araguaia Feasibility Study use US$14,000 nickel; however, based on the recent nickel price of $16,000, the project NPV on the Stage 2 Expansion Case is approximately $1 billion with an IRR of 30% generating free cash flow of US$3.5 billion

Jeremy Martin, CEO Horizonte Minerals, August 2019.

The Feasibility Study (FS) comprises an open pit nickel laterite mining operation that delivers ore from a number of pits to a central rotary kiln electric furnace (RKEF) metallurgical processing facility. The metallurgical process comprises a single line (RKEF) to extract FeNi from the ore. After an initial ramp-up period, the plant will reach a full capacity of approximately 900,000 tonnes of dry ore feed per year to produce 52,000 tonnes of ferronickel, in turn containing 14,500 tonnes of nickel per year. The FeNi product will be transported by road to the port of Vila do Conde in the north of the State for sale to overseas customers.

The initial 28 year mine life of the FS design generates free cash flows after taxation of US$1.6 billion, returning an IRR of over 20% on an initial capital cost of $US443 million, with predicted sufficient Mineral Resources to extend the mine life well beyond the 28 year period or to increase capacity.

The project has been designed to allow for a second RKEF process plant, which would double Araguaia’s output of FeNi.

The Feasibility Study confirms Araguaia as a Tier 1 project with a large high-grade scalable resource, a long mine life and a low-cost source of ferronickel for the stainless-steel industry. Included within the Study is the option for future construction of a second process line which would double Araguaia’s production capacity from 14,500 t/a nickel up to 29,000 t/a nickel.

The Stage 2 expansion gives a 26-year mine life, generating cash flows after taxation of US$2.6 billion, with an estimated NPV of US$741 million and an IRR of 23.8% - using the base case nickel price forecast of $14,000/t. The second line will be financed through operational cash flow, meaning upfront capital cost remains at the same level at the FS Stage 1 of US$443 million.

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