Horizonte Minerals announced today that construction delays and design changes will increase costs and push back the first production at its Araguaia nickel project in Brazil to Q3 2024. Capital expenditure is expected to increase by 35% as a result.
Horizonte Minerals shares sank over 50% on the news released on Monday.
Despite the challenges, Horizonte said engineering and early construction work continue to progress. Ore stockpiling began last quarter, and key equipment like the rotary dryer is in place. The transmission line and water infrastructure are also advancing.
However, final engineering identified the need for additional civil works and higher material quantities. Some suppliers also cannot deliver on the original timeframe, adding cost pressures.
An independent review found the changes will require more capital expenditure and a longer schedule to the first metal production. Horizonte expects to provide details on the review and updated operating costs in Q4 2023.
The company still plans to publish a feasibility study on a potential second production line at Araguaia in Q4. The two lines combined could produce 29,000 tonnes of nickel per year.