Horizonte Minerals

With estimated nickel resources of 100m tonnes at 1.3% at Araguia in Brazil, Horizonte Minerals (HZM) hopes to complete a preliminary feasibility study this year.

AIM-quoted Horizonte, which has $5.8m (£3.6m) cash, intends to expand the resource estimate at Araguia (which was originally obtained from temporarily cash-strapped Canadian mining group Teck) and in particular to focus on its higher-grade core, now some 24m tonnes at 1.6% nickel.

Stressing that a large portion of Araguia's nickel is of a laterite and saprolite description and thus susceptible to more economical treatment than limonite nickel, chief executive officer Jeremy Martin suggests that the first quarter of this year could bring a preliminary economic assessment of the project, for which costs of $7,000 a tonne are envisaged, against a current market price of $19,475. Araguia, in Brazil's mineral-rich Carajas district, should have a rail link in 2014, a year after Martin says he expects a bankable feasibility study on the project and two years before earliest production.

Teck is a major shareholder in Horizonte, which is using consultant Wardell Armstrong for the Araguia pre-feasibiity study. The company, which has recruited ex-Anglo American luminary Dr Owen Bravington as a non-executive director, also has promising gold joint ventures in Brazil at Falcao and elsewhere with another major miner, AngloGold Ashanti, which Martin hints could be spun off, perhaps onto the Toronto market, on which Horizonte itself also has a listing.

Analysts argue that Horizonte's assets are worth a discounted 30p a share, the same as their float price in 2006, against today's 13.13p. Highlighted by Growth Company Investor at 10p in 2010, the shares hit 31p during the past year before turning south. However, they could now find renewed support if the various upcoming project assessments are positive.