The Araguaia Nickel Project

Horizonte is developing its 100% owned Araguaia Nickel Project 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 well -developed infrastructure, including roads, rail and hydroelectric power as a result of the mining activity in Carajás .

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

The initial28 yearmine 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 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.

On the 12^th December 2018, the Company announced the filing of the Feasibility Study for Araguaia on SEDAR. The Study has been prepared in accordance with the National Instrument 43-101 – standards of Disclosure for Mineral Projects (‘NI 43-101’).

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. Within the Study, includes the option for future construction of a second process line with 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.