UPDATE: Horizonte Minerals To Buy Araguaia From Teck

27th Jul 2010 11:31

(Adds detail and executive comment.) By Jason Douglas Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Gold and base metals explorer Horizonte Minerals PLC (HZM.LN) Tuesday said it agreed to buy a nickel project in Brazil from Teck Resources Ltd. (TCK.A.T), in a deal that gives the Canadian mining giant a 50% stake in the company. Horizonte also agreed to take full control of a second nickel project nearby and Chief Executive Officer Jeremy Martin told Dow Jones Newswires the combined projects could contain as much as 100 million metric tons of nickel laterite ore with high grades of nickel. The company has three rigs poised to start drilling next month as part of a program to work out the projects' formal mineral resource, he said. Martin said Horizonte now has a nickel project in "the upper echelon" of similar projects worldwide. Horizonte said it agreed to acquire the Araguaia project from Teck by buying unit Teck Cominco Brasil SA in exchange for roughly 123 million new shares. The deal gives Teck a 50% stake in the company and constitutes a reverse takeover under Alternative Investment Market rules and values Teck Cominco Brasil at about GBP7.5 million. Shares in Horizonte, which were suspended July 15 when the company said it was in talks about a reverse takeover, were re-admitted to trading Tuesday. At 1027 GMT, the stock was 2 pence or 23% higher at 10.75 pence, making it one of the biggest risers in a 0.1% lower AIM. Horizonte also agreed to acquire the 50% of the Lontra nickel project it doesn't already own from LGA Mineração e Siderugia Ltda., a privately-owned Brazilian mining company, in exchange for 10 million Horizonte shares. Lontra is adjacent to Araguaia and both projects are near deposits owned by Vale S.A. (VALE5.BR) and Xstrata PLC (XTA.LN). Together, Araguaia and Lontra comprise 11 licenses across 73,000 hectares of land. The drilling program is being funded by a GBP5.13 million share sale, also announced Tuesday. Horizonte said it placed 51.3 million new shares with investors at 10 pence a share--a 14% premium to Monday's closing price. Martin said Horizonte is expecting to publish initial resource estimates for Araguaia in the first quarter of next year and preliminary feasibility studies towards the end of 2011. -By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; [email protected] (END) Dow Jones Newswires July 27, 2010 06:31 ET (10:31 GMT)