- Horizonte Minerals has reached an agreement with Vale to acquire 100% of the advanced Vermelho nickel-cobalt project in Brazil for $8.0m.

The company has also announced a conditional placing in the UK and Canada to raise up to £8.5m, gross, at 3.5p per placing share.

Vermelho was approved by Vale in 2005 with nameplate annual production capacity of 46,000 tonnes of nickel and 2,500 tonnes of cobalt.

Horizonte said the combination of its 100%-owned Araguaia and Vermelho nickel projects will create one of the leading nickel development companies globally.

It said: 'The Vermelho project has a high grade scalable mineral resource with over 1 million tonnes of contained nickel and 43,000 tonnes of contained cobalt.'

Horizonte will pay an initial cash payment of $150,000 upon signing, and US$1,850,000 due on the second anniversary with the balance payable on sale of first commercial product.

Chief executive Jeremy Martin said: 'I am delighted to announce the acquisition of Vermelho which transforms Horizonte into a multi-asset company bringing together two large, advanced nickel assets located in an established mining region in the Para State northern, Brazil.

'The Vermelho project also contains a large cobalt resource which Vale planned to process alongside the nickel, which gives Horizonte exposure to an additional commodity stream, in light of the growing interest in both cobalt and nickel for use in the Electric Vehicle battery market.

'This transaction is one of those rare opportunities that benefits from having had a full Feasibility Study completed by one of the world's leading mining groups.

'The acquisition is the latest, and largest, transaction following Horizonte's successful strategy of discovering, consolidating and acquiring nickel resources at low points in the commodities cycle and adding value to position ourselves as the leading nickel development company.

'We have been able to negotiate the acquisition of the project for US$8m, with US$2m up front in cash and the balance paid on first commercial sale of product, and we consider this transaction offers compelling value for shareholders.

'This acquisition comes at an exciting time for Horizonte. The Araguaia nickel project moves towards completion of the Feasibility Study due in Q1 2018, with the construction permits due mid-2018.

'These corporate developments sit against a backdrop of improving nickel market fundamentals, driven by the robust market for stainless steel combined with the fast growing Electric Vehicle market focused on nickel and cobalt.'

Story provided by