Horizonte Minerals shares sank on Tuesday after announcing that the capital required to complete construction of its Araguaia nickel project in Brazil has increased to approximately $1 billion, up 87% from previous estimates of $537 million.
The revised cost-to-complete (CTC) estimate and construction schedule were prepared by G Mining Services, a mining construction and engineering firm. G Mining estimated the capital needed to finish construction, commission the Araguaia project, and deliver first metal would be around $454 million. When combined with prior spending, this brings the total estimate at completion (EAC) to $1.004 billion.
Horizonte said it expects to achieve mechanical completion of Araguaia in the first quarter of 2026 under the revised schedule.
Horizonte Minerals shares were down 59% at the time of writing.
The company appointed Graham Crew as interim Chief Operating Officer to oversee the review process and construction plans. Horizonte also said it is in discussions with major shareholders and lenders to restructure debt facilities and secure full financing for the project.
The news will come as a hammer blow to investors who will now have to wait many years for the first production and face the uncertainty of how Horizonte will actually get there.
“Since our last update, a significant volume of work has been completed to develop a new Project Execution Plan, develop a realistic mine plan and business plan, all while continuing to proactively engage with the Company’s cornerstone shareholders, senior lenders, vendors and contractors as well as the community and local authorities,” said interim CEO Karim Nasr.
“While the new Cost-to-Complete is higher than previously announced by the company, it is now built on solid methodologies, which is a testament to the hard work undertaken to date by the whole Horizonte team.”