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New Horizonte Minerals shares begin trading following Teck Brazil acquisition

The newly enlarged Horizonte Minerals (LON:HZM) began trading on London’s AIM market this morning, after it completed the acquisition of Teck Resources’ (TSX:TCK) Brazilian nickel business. Teck Brazil’s primary asset was the advanced Araguaia nickel project, which is located in the Carajás mineral district of northern Brazil.

"The completion of this deal is a major milestone for the company, and marks the transformation of Horizonte into a leading exploration and development company in Brazil,” Horizonte chief executive Jeremy Martin commented.

Now under Horizonte’s control, Araguaia and the adjacent Lontra project will have a potential combined resource in excess of 100Mt (million tonnes) with “world-glass” grades.

The acquisition was initially agreed in July 2010.

Under the terms of the acquisition, Horizonte has issued 50% of its equity - around 123m shares - to Teck Resources. Concurrently it also issued 51m shares, raising £5.13m, and it issued 10m shares to acquire the entire interest in the Lontra project.

Horizonte now has a total of 246,560,480 shares in issue.

"Teck, which through the deal has become a significant shareholder of the company, will support the fast-tracked development of the combined nickel projects with the aim of delivering a JORC compliant - 43-101 nickel resource by first quarter 2011,” Martin added.

The newly combined Araguaia and Lontra projects are made up of 11 licences and licence applications, covering 73,000 hectares in the Carajás mineral district.

The enlarged area has eight significant mineralised zones, which Horizonte believe will enable the delineation of a nickel laterite resource in excess of 100Mt with economic grades, in a region with established infrastructure.

Prior to the acquisition, Teck had completed 10,314m of drilling in 492 drill holes at Araguaia, which resulted in significant ‘grassroots discovery’.

“The enlarged Horizonte now has two core business areas, nickel and gold which are both supported by major mining companies ... I am confident that with these foundations in place, Horizonte will experience solid growth into 2011".

Horizonte has an exploration alliance with AngloGold Ashanti (LON:AGG, NYSE:AU). AngloGold is funding Horizonte’s exploration work, where a regional target generation programme is underway in the prospective Campestre area of southern Brazil.


Disclosure: The author holds no positions in the company