Horizonte Minerals Plc

Araguaia Project Operational Update - Seite 3

• Integrated Environmental Impact Assessment across all project infrastructure pieces;
• Biodiversity Action Plan;
• Integrated Ecological Services Study; and
• Integrated environmental-social Management System (IMS).

Despite the pandemic, the social team has ensured that communities remain fully briefed on the Project’s progress, albeit in a new “Covid-safe” format. Horizonte continue to keep local communities informed with the most up to date health and hygiene advice regarding the pandemic, and is supporting vulnerable families with food parcels.

Project Finance

The project finance process, led by Endeavour Financial, continues to make strong progress. As announced on 12 August 2020, the Company executed a mandate to arrange a senior secured project finance facility of up to US$325 million, with a syndicate of five financial institutions. The Company is also in discussions with a number of ECAs to participate in the facility by providing equipment linked financing. This process has progressed well throughout the year and the Company looks forward to moving towards credit approvals and execution of definitive facility documentation in 2021. In addition, the Company is progressing interest and participation from Brazilian financial institutions, including the Brazilian Development Bank (“BNDES”). The Company has also received initial approval for a financing facility of up to R$200 million (approximately US$32 million) from Banco da Amazônia (“BASA”).

Simultaneously, the Company is in advanced negotiations to secure long-term offtake agreements for the Project and continues to engage with a number of prospective investors. The Company has also negotiated a non-binding, conditional term sheet with one major cornerstone equity investor, subject to amongst other things, completion of the full financing package

Due to the impact of ongoing Covid-19 related lockdowns on financial markets, the Company now anticipates completing the full project financing package in H1 2021, with construction commencing shortly thereafter. This timeframe will continue to be subject to the ongoing impacts of the Covid-19 pandemic.   Each part of the project finance package remains conditional until all components are in place with a simultaneous closing targeted.

Team

In line with Horizonte’s transition to becoming a producer the Company has undertaken a comprehensive recruitment programme in both London and Brazil. The corporate team has expanded to provide additional support in the areas of finance, communications and investor relations, and key hires in the Araguaia owner’s team have been made. The owner’s team now includes leading ferro-nickel, construction and operational technical management in Brazil, including experienced professionals who have previously worked on Anglo American’s Barro Alto and Vale’s Onca Puma projects, as well as internationally recognised experts in pyrometallurgy, engineering and construction.