(Kitco News) - Horizonte Minerals (TSX: HZM) announced Thursday that it has entered into a five-year mining services agreement for its 100%-owned Araguaia nickel project in Brazil, where construction is underway and first production remains on track to commence in Q1 2024.
The company said that the contract has been awarded to Fagundes Construção e Mineração, a leading Brazilian company with a strong track record of providing mining services in Pará State.
"The five-year contract (with an option to extend for a further five years) is in line with Horizonte's operating cost assumptions stated in the feasibility study, and represents another key de-risking milestone, ensuring that the operational costs will be in the lower quartile of the nickel cost curve," the company said in a news release.
Horizonte noted that the company has secured services for mining, stock pile generation, plant feeding and slag handling activities, adding that Fagundes will provide a mining fleet consisting of over 70 units at any one time linked to the phase of mining sequence and seasonality, comprising leading brands in terms of safety, embedded technology, performance and reliability.
The company also said that construction activities at Araguaia continue to run on schedule and on budget, with pre-stripping activities due to begin in early Q2 2023 and first nickel expected in Q1 2024.
Horizonte Minerals is developing two 100%-owned, Tier 1 projects in Pará state, Brazil, the Araguaia nickel project and the Vermelho nickel-cobalt project.
Araguaia is under construction with first metal scheduled for early 2024, when fully ramped up with Line 1 and Line 2, is forecast to produce 29,000 tonnes of nickel per year.
Vermelho is at feasibility study stage and is expected to produce 25,000 tonnes of nickel and 1,250 tonnes of cobalt to supply the EV battery market.
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