Junior miner Horizonte Minerals has increased the resource at its Araguaia nickel project in Brazil from 77m tonnes to more than 100m tonnes, including 24m tonnes of higher grade material that could greatly enhance the project economics.
Araguaia is a nickel laterite project. Laterites are an increasingly important source of nickel - which adds strength and durability to stainless steel - as traditional sulphide orebodies in places like Canada deplete. Laterites comprise over two-thirds of global nickel resources, yet are currently estimated to account for only around half of actual production, thanks in part to past problems with extraction technology. That contribution is likely to rise significantly in the coming years, though.
Owing to their size, nickel laterite projects are generally the preserve of major miners, not juniors. Araguaia is understood to be the largest nickel asset in Brazil not owned by a major, although Canadian miner Teck holds a 44 per cent interest in Horizonte. Having several major mines nearby, including Vale's Onca Puma nickel mine, means Horizonte shouldn't have to worry about access to power and transport logistics, which are critical to base metal and bulk commodity projects.
Horizonte's next task is to complete a preliminary economic assessment. This is expected in the spring and will provide an initial estimate of Araguaia's economic viability. A pre-feasibility report expected by the end of the year should refine the economics, while the full bankable feasibility study, expected at the end of 2013, will guide how best to commercialise the project - although by then, someone else may own it.
