Horizonte Minerals confirms Araguaia resource estimate

Horizonte Minerals (HZM) confirmed its Araguaia mineral resource estimate on Wednesday as it published its full-year results.

The company revealed that the mineral resource at its flagship Araguaia project now comprised of 100.2 million tonnes, grading an average of 1.29% nickel, up from the 76.6 million tonnes grading 1.35% nickel announced in March 2011.

The upgrade follows an increase in the company's drilling programme from 8,000 metres to 13,204 metres, utilising seven drill rigs on site, after the company successfully placed £8.25 million in February 2011.

"Araguaia is a truly quality asset for Horizonte and one that we look forward to progressing up the development curve, accruing significant value for shareholders," said the company.

At the end of the year, the company had £5.9 million of cash, which broker FinnCap confirmed was "sufficient to take it well into 2012". Spending at Araguaia is expected to continue, with results from a metallurgical testwork programme due in "the near future" and a full preliminary economic assessment due in the second quarter of 2012.

Horizonte also took the opportunity to reassure investors regarding metal consumption and prices. "Mining and metals are long-term industries. Even if metal consumption were to remain flat, it is the critical lack of supply of new quality projects that will likely maintain metal prices at reasonable levels. The global stainless steel production is forecast to reach new highs in 2012. This should see nickel prices at levels capable of sustaining a large nickel project such as Araguaia," it commented.

In addition to Araguaia, Horizonte has a developing gold project with AngloGold Ashanti (AGD). The Falcao gold project has progressed through the year and seen the completion of the initial 2,587 metre scout drill programme that has tested the large defined gold-in-soil anomaly.

"Looking forward, we expect the company to continue to make steady progress with the work at Araguaia. At the same time, Horizonte will continue to raise its market profile, in particular in the North American market, where it recently listed on the Toronto exchange," stated FinnCap.

FinnCap has a 'buy' recommendation on the stock.

To find out more about Horizonte Minerals, read more about it on Edmond Jackson's Stock to Watch.