- Brazil-focused Horizonte Minerals' pre-tax losses rose to £1.7m in the year to the end of December - up from a restated £1.5m in 2015.

Administrative expenses increased to £1.0m from £864,892.

Chairman David Hall said: "2016 was a significant year for Horizonte which saw us achieve numerous major milestones at our Araguaia nickel project in Brazil.

"These include the delivery of a pre-feasibility study, the receipt of our preliminary environmental licence, and raising the funds to deliver a feasibility study in 2017.

"We are now focussed on taking this project up the value curve, through the feasibility study process and into development as one of the lower cost ferronickel operations in the market, benefiting from its high grade resource and low capital intensity.

"Our updated PFS demonstrates that the enlarged Araguaia Project is one of the largest and highest grade undeveloped nickel saprolite resources globally.

"It will generate US$1.3 billion in free cash flow over the Life of Mine ('LOM') considering an estimation of US$12,000/t long term.

"Having combined Glencore's adjacent nickel project with our own Araguaia project in a low-cost acquisition which was completed in 2016, the new compelling economics highlight a post-tax NPV of U$328 million and IRR of 19% based on a long-term nickel price of US$12,000/t.

"Using the bank's consensus of a mid-term nickel price of US$14,000/t, the NPV increases to US$581 million with an IRR of 26.4% showing the significant gearing that is available with any future increase in nickel prices.

"Once developed, Araguaia, is expected to produce around 14,500 tonnes of nickel per year, with a resource that is now a Tier 1 world class asset in terms of size and grade.

"The value is demonstrated in this updated PFS which now shows an average grade for the first 10 years of mining of 1.96% nickel, and the life of mine grade over 28 years averaging 1.77% nickel.

"This places the project firmly in the upper quartile of the global grade curve for this type of deposit.

"Most significantly the PFS also demonstrates that Araguaia is cash flow positive at today's nickel prices, which puts the project within a limited group of global assets that are considered viable in the current low nickel price environment.

"The start of 2016 saw nickel prices at a 13 year low of US$7,750/t, however after base metals rallied in the last quarter of 2016, many banks and analysts raised their 2017 forecasts for nickel.

"There are multiple reasons for this including the United States of America's ambitious infrastructure spending plans which are expected to boost global metal demand growth over the coming years, coupled with the closing of multiple nickel mines which will slow market growth and curtail supply."

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