A new pre-feasibility study on Horizonte Minerals Plc's Araguaia nickel project in northern Brazil estimated a posttax net present value of US$581 million, discounted at 8%, with a 26.4% internal rate of return and a 3.4-year payback period, using a nickel price of US$14,000 per tonne.
The Araguaia project, located south of the Carajás mining district in Pará State, comprises both the original Araguaia property and the adjacent Glencore Araguaia project area, after Horizonte Minerals secured the two remaining Araguaia licenses from Glencore Plc unit Xstrata Brasil Exploraçâo Mineral Ltda. in early August.
The pre-feasibility study outlined an open-pit operation producing about 14,500 tonnes of nickel in ferronickel per year over an initial 28-year mine life, according to the company's Oct. 3 news release.
Initial CapEx is estimated at US$353.5 million, while C1 cash costs are expected to be US$3.15 per pound of nickel.
The study is based on NI 43-101-compliant probable reserves of 24.6 million tonnes grading 1.77% nickel and 17.9% iron.
Horizonte Minerals said it will now focus on securing an installation license, which will allow construction to start at the project, after securing a preliminary license earlier this year.