Horizonte Minerals Plc (LON:HZM, CVE:HZM) has provided for the first time an estimate of the size of the nickel-cobalt limonite portion of Araguaia nickel laterite project in northern Brazil.
It weighs in at a ‘measured and indicated’ 20.7mln tonnes grading 1.13% nickel and 0.12% cobalt, with the potential to produce 515mln pounds of nickel and 56mln pounds of cobalt.
It is worth stressing the resource does not form part of the mine schedule or financial model for Araguaia – it simply underscores the additional potential of the deposit.
"We are mindful of the future potential value of this material so as part of the current mine plan it will be mined and stockpiled separately based on mineralogy and nickel-cobalt grades,” said Horizonte chief executive Jeremy Martin.
He pointed out the limonite cannot be processed using the rotary kiln electric furnace (RKEF) technology planned to extract the nickel from the laterite ore.
At some later stage management might look at producing nickel and cobalt hydroxides.
However Martin stressed: “The company's current focus remains on the existing FS [feasibility study] for the RKEF plant, but these limonite resources provide the potential to establish a second, complimentary project on the same site in due course.
“It should also be highlighted that there is potential within the overall project area to expand these preliminary limonite resources with additional exploration work.”
Last month Horizonte told investors that the feasibility study at Araguaia was at an “advanced stage” after making “significant progress” since the turn of the year.
At that point a number of the principal work streams were over 50% complete for a 14,500 tonnes per annum ferro-nickel operation with a 28-year life on mine.