Annual Report 2017
Horizonte Minerals is an AIM and TSX
listed nickel development company
focused in Brazil.
Company Overview
2017 Highlights
01
Horizonte Minerals at a Glance
02
Vermelho Project Overview
02
Araguaia Project Overview
03
Our Year in Review
03
Chairman’s Statement
04
Business Review
06
11
15
Operations Review – Araguaia Nickel Project
Strategic Report
Financial Report
Corporate Governance
16
18
22
23
Board of Directors and Key Management
Directors’ Report
Statement of Directors’ Responsibilities
Corporate Governance Report
Financial Statements
24
28
29
30
31
32
33
34
61
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Statements of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
Statutory Information
COMPANY OVERVIEW
2017 Highlights
Horizonte Minerals plc (the ‘Company‘) achieved a number of key milestones in 2017, strengthening
it as a leading nickel development Company which will allow it to take advantage of the improving
nickel price and the global sentiment concerning future nickel demand outlook. Towards the end of
the year the Company acquired the Vermelho nickel-cobalt asset transforming it into a multi-asset
commodity developer.
The Company’s primary strategy is to position Araguaia as one of the lowest cost nickel producers
globally with robust economics at the current nickel price. To achieve this in early 2017 the Company
formally commenced a Feasibility Study (‘FS’).
As part of the FS, contracts were awarded to leading global engineering groups including; Worley
Parsons Group to undertake the process engineering, Snowden Mining Industry Consultants to design
the mine planning and Environmental Resources Management (ERM) to undertake the hydrogeology
and the environmental and social permitting.
High grade drilling results from the trial excavation site at Araguaia were announced in 2017. These
high grade nickel intersections included, 4.97 metres grading 2.44% Ni, 8.69 metres grading 2.31% Ni,
8.62 metres grading 2.19% Ni, 11.14 metres grading 2.07% Ni and 11.05 metres grading 2.02% Ni.
The aim of this work was to define an area with near surface transition and saprolite mineralisation,
that would be representative of the first five to eight years mine life. The drill results demonstrated
this and additionally confirmed the high grade nature of the nickel mineralisation that has been
defined across the project.
The Company was also pleased to announce a maiden limonite resource at Araguaia. The limonite
mineral resource, in the Measured and Indicated category, are 20.7 million tonnes grading 1.13%
Nickel and 0.12% Cobalt (0.9% nickel cut off). The processing of the resource is not part of the current
mine plan in the FS, however, in other operations globally limonite is treated to produce products, such
as nickel and cobalt sulphates; suitable for supplying the electric vehicle battery market. With this
future growth market in mind and downstream value, it is intended that the limonite will be mined and
stockpiled separately based on mineralogy and nickel / cobalt grades.
In parallel with the FS, the Company completed and filed the Mine Construction Licence for Araguaia
to SEMAS, the Pará State authority responsible for environmental licensing, for the construction of the
Project, including mine, associated infrastructure and pyro-metallurgical processing plant. This was a
major milestone for Araguaia, as it moves the project towards the construction phase.
Jeremy Martin
CEO
Towards the end of 2017 the Company announced that it has reached
an agreement with Vale S.A to acquire 100% of the advanced Vermelho
nickel-cobalt project in Brazil.
The transfer of legal title occurred shortly after the year end, at which point the agreement became
unconditional. The acquisition terms were compelling with minimal upfront consideration, a portion of
consideration deferred for 2 years and the balance once commercial production has been achieved.
At the same time as the Vermelho agreement, the Company announced a conditional placing of
ordinary shares in the Company to raise up to £9.2 million with the final portion of the placing closing
in early 2018.
The acquisition of Vermelho, transforms Horizonte into a multi-asset company bringing together two
large, high grade, advanced nickel projects located in an established mining region in the Para State
northern, Brazil.
1
Horizonte Minerals at a Glance
Horizonte Minerals wholly owns the advanced Araguaia nickel project, and the new Vermelho Nickel-Cobalt
project, both located south of the Carajàs mineral district in northern Brazil.
The Araguaia project will utilise the proven Rotary Kiln Electric Furnace (RKEF) process to produce 14,500
tonnes per annum of nickel grading 30% in around 50,000 tonnes ferronickel product.
Araguaia is currently undergoing a Feasibility Study with an anticipated completion planned in mid 2018.
In December 2017, the Company agreed to acquire the nearby Vermelho nickel-cobalt project from Vale SA
which will form the Company’s second potential operation.
£9.2 million of new capital raised to advance both of its projects. £7 million was raised in December 2017
with the remaining £2.2 million received post year end.
Vermelho
Project Overview
• New project 100% owned by Horizonte Minerals plc
• Located in the Carajas Mining district in Northern Brazil
• Feasibility showed a nameplate capacity of 46,000 t/a nickel
and 2,500 t/a cobalt
• Historic Mineral Resource: M&I 245 Mt grading 0.81% Ni
Within trucking distance of Araguaia.
The project was originally developed to full feasibility level by Vale,
with the objective of becoming its principal nickel operation. The
well-established infrastructure of this mining region, combined
with Vermelho’s large-scale and high grade resource make this a
compelling project.
2
Previous full scale pilot campaigns achieved average leaching
extraction of more than 96% nickel and produced LME-grade
nickel cathode.
Potential nickel products would be suitable for the EV market.
In addition, drilling programmes totalling 152,000 metres and
detailed engineering studies have been completed on the project.
Vermelho has a high-grade scalable mineral resource with over
2.2Mt contained nickel and 121,000t of cobalt, making it one of
the largest nickel – cobalt resources globally.
horizonteminerals.com COMPANY OVERVIEW
Araguaia Project Overview
Araguaia is an advanced nickel project being developed by the Company as the next major ferronickel operation in Brazil.
• 100% owned by Horizonte Minerals plc
• Located south of the Carajas Mining district in Northern Brazil, with good access to infrastructure
Mining: Shallow open pit mining will be used for the exploitation of nickel saprolite. Production will be supplied from eight open pits, 3 -5
being open at any given time, with a targeted 0.9mt per annum of ore to a central processing and smelting facility. A 28 year production
schedule is envisaged with a 2 year construction period followed by ramp up over 13 months to full scale commercial production.
Process: The selected metallurgical process is the widely used and proven RKEF (rotary kiln - electric furnace). A successful pilot campaign
produced high grade commercial quality ferronickel from the Araguaia deposit. The process flow sheet has been frozen as part of the
ongoing Feasibility Study for the Araguaia project.
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March 2017
March 2017
April 2017
May 2017
July 2017
August 2017
September 2017
October 2017
November 2017
December 2017
December 2017
February 2018
Contract awards for the Araguaia Feasibility Study
Commencement of Araguaia Feasibility Study & drilling programme
Awarding of new exploration concessions adjacent to Araguaia North deposit
Trial Mining drill results
Progression of sustainability work streams with fauna and flora field programmes underway
Araguaia Feasibility Study update
Araguaia limonite resource containing nickel and cobalt
Construction Licence application submission to Environmental Agency
Araguaia mine plan licence submission to Mining Agency
Acquisition of Vermelho nickel-cobalt project from Vale
£9.2m fundraise to fund the Vermelho acquisition, Preliminary Economic Assessment (PEA)
for Vermelho
Completion of trial excavation programme at Araguaia
3
Dear Shareholders
I am pleased to report on a transformational year for Horizonte, as we continued to make excellent
progress at our tier 1 Araguaia Nickel Project in Brazil whilst in addition acquiring a second major new
asset with the acquisition of the nearby Vermelho nickel-cobalt project..
The agreement to purchase Vermelho from Vale SA, will allow the Company to fully take advantage of
the electric vehicle (EV) market by potentially supplying key battery ingredients into the industry at a
time when they are expected to be most in demand.
Nickel prices have continued to show recovery from the 13-year low of US$7,750/t in early 2016,
touching US$14,000/t in a recent rally before settling back to approximately US$13,000/t at the date
of this statement.
Sentiment towards nickel demand continues to be positive, according to consultants Wood Mackenzie.
This not only reflects expected demand from the batteries/EV sector but also from the current robust
demand areas such as stainless steel, nickel alloys and chemicals, especially from China.
Horizonte, with the advanced Araguaia ferro-nickel project moving to development phase and
Vermelho’s potential to produce nickel sulphate and cobalt, is uniquely positioned to take advantage of
the current demand forecast, in a space with little competition.
David J Hall
Chairman
4
horizonteminerals.com CHAIRMAN’S STATEMENT
Vermelho
In December 2017, we announced a major deal for Horizonte
with the acquisition of the nearby Vermelho nickel-cobalt project
from Vale, which completed post year end. This acquisition has
transformed Horizonte into a multi-asset company bringing
together two large, advanced nickel assets located in the
established mining region in the Para State in northern Brazil.
In becoming a multi-asset company, we have started to de-risk
our business fundamentals. The acquisition of a project that
benefits from extensive and costly previous development will allow
us to fast track to resource definition and economic assessment.
The Vermelho nickel project is located in the Carajas mining district,
within trucking distance from the northern part of Horizonte’s
Araguaia project. The Carajas district is an established mining
region with well-developed infrastructure in place, including
rail, roads and hydro-electric power. An exciting aspect of this
acquisition is that the project also contains a large cobalt resource
which Vale planned to process alongside the nickel. This gives us
exposure to an additional commodity stream, for which there is
growing interest for use in the EV battery market.
Alongside the acquisition, we successfully raised £9.2m, which
means the Company is fully funded for the next two years, for
the completion of the FS at Araguaia and a Preliminary Economic
Assessment for Vermelho.
Conclusion
We believe that with our continued progress at Araguaia and
becoming a multi-asset nickel and cobalt company we are
currently well placed to benefit from the improving nickel market
fundamentals, driven by the robust market for stainless steel
combined with the fast growing EV market.
On behalf of the Board, we would like to again thank all our
stakeholders for their continued hard work and support as we
build an exciting future for our Company.
David J Hall
Chairman
26 March 2018
Araguaia
Throughout 2017, a number of key milestones were achieved
at Araguaia, positioning the Company well for the upcoming
completion of a Feasibility Study (“FS”) for the project.
The aim has always been to consolidate within the Araguaia nickel
belt and we have announced that we added to our land position
with the awarding of three new concessions totalling 1,748 ha,
located in prospective locations containing ultramafic intrusion of
a similar type to those hosting the high grade nickel resource at
Araguaia’s Vale dos Sonhos deposit.
We also submitted the Mine Plan to Brazil’s National Mining
Agency as part of the process towards receipt of the principal
permits necessary to commence mine construction. Alongside the
Mine Plan was our submission of the Mine Construction Licence.
In September 2017, we announced a nickel-cobalt limonite
resource at Araguaia with the potential to supply the Electric
Vehicle (“EV”) battery market. Limonite resources are treated to
produce products, such as nickel and cobalt hydroxides; suitable
for supplying the EV battery market. We are therefore mindful of
the future potential value of this resource in relation to the current
mine plan so that it will be mined and stockpiled separately, with a
view to extracting maximum value from the resource in the future.
Community and social relationships remain a vital part of
Horizonte’s social licence as the communities close to the
project are some of the Company’s most important stakeholder
groups. A number of social investment activities were initiated,
including providing new libraries, education equipment and
furniture for selected schools within the project area. Araguaia
has the potential to create a number of jobs in a rural area where
the average family income ranges between US$2 - US$4 per
day. As a result, the Pará Government considers Araguaia to
be a key economic driver for the southern part of the State and
we look forward to working closely with the local and regional
governments on developing the project. We are focussed on
building and maintaining these strong partnerships as we
progress Araguaia into Brazil’s next major nickel producing mine.
Post the year end, we announced the completion of the trial
excavation programme with all our technical objectives being
met. This programme will allow us to confirm a number of key
variables within the FS, to be published in 2018.
5
Operations Review - Jeremy Martin
Araguaia Nickel Project
Bankable Feasibility Study (FS)
In March 2017, Horizonte Minerals announced the completion
of a competitive tender process and awarded the contracts for
the Feasibility Study (‘FS’) at Araguaia. Araguaia is 100% owned
by Horizonte and is located on the eastern margin of the State of
Pará, North-Eastern Brazil, to the north of the town of Conceição
do Araguaia (population of 46,206), south of the main Carajás
Mining District. The Project has good regional infrastructure
including a network of Federal highways and roads, with access to
hydro-electric power.
The Carajás Mining District (Carajas) is situated approximately
200km northwest of the Project and is host to a number of world
class mines operated by Vale. Carajás is the centre of mining
activity in the Pará State and hosts the major industrial city of
Marabá, (population 262,000) serving Carajás, and a strategic
position being crossed by five major highways, as well as having
a significant logistics and infrastructure with a port on the
Tocantins River.
The aim of the FS is to deliver a low capital intensity project that
operates at the lower end of the cost curve based on a production
rate of 14,500 tonnes per annum (‘tpa’) of nickel, using the proven
Rotary Kiln Electric Furnace technology (‘RKEF’). The Company’s
strategy is to position itself as one of the lowest cost new nickel
producers globally.
Contracts awarded for the Araguaia FS to leading consulting
groups included:
• Worley Parsons Group (‘WorleyParsons’) to undertake the
process engineering
• Snowden Mining Industry Consultants (‘Snowden’) to
undertake the mine planning, Mineral Resource Estimate
(‘MRE’) and the Reserve Estimate
• Environmental Resources Management (‘ERM’) to undertake
the hydrogeology and the environmental and social permitting
• Specialised consulting groups such as Prime/RSA for
geotechnical aspects and national Brazilian groups like
Steinweg for logistics have been appointed for additional
sections of the FS
The FS officially commenced with a kick off meeting held on
site during the first week of March 2017. The FS is targeted for
completion in mid 2018 and the Company is fully funded through
to completion of the Araguaia FS. A comprehensive field work
program started shortly after March 2017 and consisted of trial
excavation, trial mining grade control drilling, geotechnical drilling
and pitting as well as a range of geotechnical tests.
During late Q2 running through Q3, 2017, the Company
excavated a test pit at the Pequizeiro deposit (‘PQZ’) at Araguaia.
The final trial excavation at Araguaia comprised approximately
27,000 tonnes of material. The exercise was part of the field work
completed for the ongoing FS and met the recommendations set
out by Snowden mining engineers, in the Pre-Feasibility Study,
announced in October 2016.
6
horizonteminerals.com
BUSINESS REVIEW
The exercise was undertaken by mining contractors under the
direct supervision of Snowden, with the support of the Company’s
geological team on site.
Mining at Araguaia is to be completed with conventional truck and
shovel mining methods. No blasting is expected to be be necessary.
The process throughput is 900dktpa. First metal production
is scheduled for March 2021 with a cold commissioning in
December 2020. The ramp-up profile to full production is
calculated over a period of 12 months. During this period, the
nickel feed grade is scheduled tobe moderated so that the best
grades would not processed and overall recovery increased.
A number of processing constraints were applied to the schedule:
• Fe grade between 17.0% and 18.0%
• Al2O3 grade between 5.3% and 5.5%
• SiO2/MgO ratio between 2.5 and 2.6
• FeNi ratio approx. 7.64-7.68
To mitigate production risk and initial capital burden, the
mining operations will be outsourced to an experienced mining
contractor. Budget proposals for the project mining work were
received from various contractors. Those contractors have been
recently involved in other mining operations in Brazil on similar
or larger scale operations. HZM will employ a small mining team
comprising of senior management and technical services. The
mining team will oversee and coordinate the execution of the
work and manage the performance contractor on a daily basis.
The objectives of this Trial Excavation programme included:
• Assessment of short scale variability to optimise
grade control;
• Assessment of grade control sampling using the channel
sampling method;
• Reconciliation of mined blocks with estimated grades and
tonnes using two borehole spacings (5m and 10m);
• Reconciliation of contact surfaces as predicted by the
resource model;
• Assessment of the presence or not of core stones;
• Samples to measure the granulometry of the ore;
• Confirmation of dilution factors;
• Large scale measurement of bulk density factors;
•
In situ confirmation of groundwater and concept of
dewatering required;
• Technical support for the mining cost and input assumptions;
and,
• Testing the effectiveness of pisolitic ferricrete as sheeting.
The Company collected ‘typical ore’ samples for large scale
granulometry and crushing test work, which was completed at
the University of São Paulo. Horizonte also conducted detailed
mapping and sampling of individual Selective Mining Units
(‘SMUs’), measuring 5m x 5m x 2m. All analytical work was
undertaken at the ALS laboratories in Brazil and Peru with full QA/
QC protocols applied.
Prior to the excavation, a 30-hole (600m) diamond drilling
programme was completed on a 5m x 5m grid over the
excavation site. The data from this programme has been used for
estimation of tonnage and grade for reconciliation with the SMUs
excavated during the trial mining.
A conditional simulation exercise on three of the principal
deposits, that will be mined in the first 10 years has been
successfully completed. This gives quantitative support to the
resource classification. Mine planning and detailed design is at an
advanced stage. A mine-to-mill strategy has been developed to
ensure appropriate operational procedures to ensure the plant
feed meets the chemical and physical requirements. Preparation
of detailed documentation for potential mine contractor
quotations have been completed. The estimation of the quantities
of ferricrete suitable for use at sheeting in the mining areas has
been completed.
Mining
Nine shallow open pits were designed for HZM through a process
of pit optimisation using costs and process recoveries. All nine
pits are designed using smoothed pit shells with the removal of
small satellite pits through a standard process of pit optimisation,
waste dump design and pit design. The pits were optimised to
target the highest-grade material possible with a mine life of
approximately 28 years. This resulted in a cut-off grade of 1.4% Ni
being applied. The pits were then optimised using Whittle 4X to
determine a shell to use for design.
7
Operations Review Continued
Limonite
The Company was also pleased to announce a maiden limonite
resource at Araguaia. The limonite mineral resource, in the
Measured and Indicated category, are 20.7 million tonnes grading
1.13% nickel and 0.12% cobalt (0.9% nickel cut off). The processing
of the resource is not part of the current mine plan in the FS,
however, in other operations globally limonite is treated to
produce products, such as nickel and cobalt hydroxides; suitable
for supplying the electric vehicle battery market. With this future
growth market in mind and downstream value, the limonite will
be mined and stockpiled separately based on mineralogy and
nickel / cobalt grades.
Infrastructure
Elsewhere on the ground, Prime Resources (‘Prime’) have
completed the geotechnical drilling programme over the process
plant site to allow the design of foundations and heavy load
structures. Additionally, Prime have completed the design for
the cooling water dam, slag depository and the water pipeline
to serve the RKEF facility. The work around the process design
and engineering sections of the FS which are being undertaken
by Worley Parsons Canada Services Ltd. (‘Worley Parsons’) are
at an advanced stage. Recent work has focused on the power
line to ensure the best route into the project is selected and once
frozen the capital costs can be calculated. The team is currently
undertaking final plant layout, capital equipment tenders and flow
sheet optimisation work to ensure that the RKEF plant delivers
from an operational and capital cost perspective.
Financial
Operating (‘OPEX’) and capital cost (‘CAPEX’) work for the FS
is ongoing. The OPEX and CAPEX are being updated from the
Araguaia Pre-Feasibility Study (‘PFS’) announced in Q4 2016.
Horizonte remains focused on its objective of becoming a low-cost
nickel producer. Due to the recovery in a broad range of commodity
prices over the past 18 months, the Araguaia project economics
will need to factor in higher OPEX inputs, such as thermal coal and
oil – both key inputs to the RKEF process. This theme is common
across the entire mining industry. Local infrastructure, plant layout
and design continue to be a focus as we look to optimise the
CAPEX element of the project. Simultaneously, the nickel price
environment has changed significantly over the period since the
PFS from around $9,000/t to $13,000/t today and the positive
effects of this will be factored into the economic model.
Processing
Previous laboratory scale test work carried out was reported in
the 2014 PFS and was based on use of the RKEF process. Thus,
during the period from late 2011 through 2013, HZM developed
a laboratory test plan and contracted a number of organisations
and metallurgical laboratories to conduct the test work which was
incorporated into the design criteria for the RKEF process for the
PFS. The results of these studies were reported in the 2014 Pre-
Feasibility Study.
A number of test samples of ANS ore were obtained which were
considered by HZM to be representative for processing of this
ore. Two sets of samples were used in the metallurgical test work
program which was carried out at XPS, FLS, KPM and Feeco.
Based on this test work, including a full scale pilot plant campaign,
the RKEF process is considered suitable for the treatment of the
ANP laterite ore; the FeNi product will have a nickel content of
30% Ni.
The metallurgical plant, which is based on the RKEF process, will
have a single processing line from ore receipts through to shotting
of the FeNi product, having a capacity of 0.9Mt of ore per annum
(dry), producing approximately 15kt/a of nickel. The plant will
include one primary and one secondary crushing station, one ore
homogenization facility and one RKEF production line comprising
the following: one rotary dryer, a tertiary crushing station handling
dryer overflow after screening, dried ore storage, a rotary
reduction kiln, a smelting electric furnace and a ladle refining
process, coupled to a metal shotting system, a metal shot dryer
and a bulk storage area. Also included is a small facility for metal
recovery from refining slag.
The FS and Project Implementation Plan for the Project have been
developed to meet the requirements of the mine plan. This plan
includes phase 1 with site preparation such as earthworks, site
access, temporary power supply and other site facilities as well
as phase 2, the plant implementation with the construction of the
Process Plant.
A detailed logistics study analysed different possible route
alternatives to determine the most cost efficient method for
transporting coal, and consumables to and from site.
Drilling
High grade drilling results from the trial excavation site at the
Araguaia nickel project were announced in 2017. These high
grade nickel intersections included, 4.97 metres grading 2.44%
Ni, 8.69 metres grading 2.31% Ni, 8.62 metres grading 2.19%
Ni, 11.14 metres grading 2.07% Ni and 11.05 metres grading
2.02% Ni. The aim of this work was to define an area with near
surface transition and saprolite mineralisation, that would be
representative of the first five to eight years mine life. The drill
results demonstrated this and additionally confirmed the high
grade nature of the nickel mineralisation that has been defined
across the project.
8
horizonteminerals.com BUSINESS REVIEW
New Concessions
The Company announced in April 2017, that it had been awarded three new concessions, totalling
1,748 ha. The concessions are located in prospective locations containing ultramafic intrusion of a
similar type to those hosting the high-grade nickel resource at Araguaia’s, Vale dos Sonhos deposit.
Alongside this, further applications totalling an area of 6,186 hectares were also filed with the Mines
Department for two additional concessions also adjacent to the Araguaia North deposits.
Acquisition of Vermelho Project
Transaction Overview Vermelho Project
In December 2017 HZM reached an agreement with Vale S.A. (Vale) to acquire 100% of the advanced
Vermelho nickel-cobalt project in Brazil.
The Vermelho nickel project is located in the Carajas mining district approximately 85km from the
northern part of Horizonte’s Araguaia project, Brazil. The Carajas district is an established mining
region with well-developed infrastructure in place, including rail, roads and hydro-electric power.
The Vermelho project was developed by Vale with the objective of becoming its principal nickel-
cobalt operation. Extensive work was undertaken on the project, which included drilling programmes
totalling 152,000 metres, full scale pilot test work and detailed engineering studies. The project was
subsequently taken through a feasibility programme with Vale announcing a positive development
decision in 2005. The project was designed around the construction of a high pressure acid leaching
plant (HPAL) to process the nickel/cobalt laterite ore. The Feasibility Study included a five-year
metallurgical test work and pilot plant programme which delivered 96% average leaching extraction
rates of nickel and cobalt, in addition LME grade nickel – cathode was produced.
The Feasibility Study showed production capacity of 46,000 tons/annum (“tpa”) of metallic nickel,
and 2,500 tpa of metallic cobalt, with an expected commercial life of 40 years. Vermelho was
subsequently placed on hold by Vale after the delivery of the FS due to the acquisition of Inco Limited.
A historical Mineral Resource estimate for Vermelho is presented in the table below:
Resource
Category
Measured
Indicated
Measured
+
Indicated
Inferred
Tonnage (Mt)
Contained Ni
metal (kT)
Contained Co
metal (kT)
246.8
11.3
258.1
14.03
2,171
95
116.7
4.8
2,266
121.5
113
4.5
Source: Extracted from SRK (2007), shown at a 0.40% nickel cut off grade.
Ni
(%)
0.88
0.84
0.88
0.8
Co
(%)
0.05
0.04
0.05
0.03
MgO
(%)
8.75
11.2
8.86
19.28
SiO2
(%)
46.07
44.85
46.02
40.65
Next Phase of Project Development
During the course of 2018 Horizonte plans to undertake the following work on the project:
• Commencing a 43-101 Mineral Resource Estimate looking at the higher-grade nickel-cobalt
portions of the deposit;
• Review the historic metallurgical test work and new work to test the high grade saprolite parts
of the deposit to confirm its suitability for use in the RKEF flow sheet developed for Araguaia; and,
confirm that the mixed hydroxide product developed by Vale can be upgraded to produce nickel
and cobalt sulphate for potential use in EV battery products;
• Subject to successful results from these initial work steams and identification of suitable process
routes the Company will release a Preliminary Economic Assessment (’PEA’) in H2 to demonstrate
the potential value of the project.
9
Operations Review Continued
Social and Environmental
The areas within the Project are located 100% within the Pará State, therefore the Project will continue
to be permitted by the State Environmental Agency for the majority of environmental permits. The
Brazilian mine permitting process with environmental agencies generally has three key stages:
• The preliminary licence (‘LP’), obtained by the Company in 2016;
• The installation licence (‘LI’), which permits the start of construction;
• Finally, the licence to operate once construction is complete (‘LO’).
The granting of the LP is often regarded as the most important licence as it outlines the parameters
of the Project as agreed upon by all stakeholders and is the only environmental licensing process that
requires approval of the State Government Environmental Council. The Council awarded the LP to
Horizonte Minerals in May 2016 with unanimous approval by all present councilors.
In partnership with ERM consultants across Brazil, UK and Canada, as well as local Brazilian consulting
groups; the Company has conducted a range of studies in 2017 to align with international banking
standards, such as, the International Finance Corporation (IFC) Environmental and Social Performance
Standards and Equator Principles. The results of these studies will be published in the Araguaia
Feasibility Study in 2018.
Permitting
The Company took significant strides in de-risking the Araguaia Project in 2017 through licence
approvals and construction permit requests.
A number of permits were progressed in 2017, including:
• Renewal of Operational Licence for exploration activities in Araguaia South for 5 years;
• Approval of Operational Licence for exploration activities in Araguaia North;
• Approval of fauna study licence;
• Approval of the Final Exploration Report with Federal Mining Agency (ANM) for mine and
infrastructure areas;
• Submission of Installation Licence (construction permit) request for Araguaia South mine & plant;
• Submission of Installation Licence (construction permit) request for the Araguaia South
water pipeline;
• Submission of water-use permit requests for Araguaia South;
• Submission of vegetation suppression approval request for Araguaia South;
• Submission of the Economic Mine Plan and Mining Servitude to ANM;
• Request for Terms of Reference for Transmission Line Installation Licence (construction permit);
• Request for Terms of Reference for Araguaia North environmental impact assessment.
In 2018 the sustainability team will prioritise the progress of Araguaia South’s construction licences
and will also progress environmental studies and baseline data collections for the energy Transmission
Line and Araguaia North deposit.
In addition to the Araguaia Project permits, the Sustainability team will commence work on the
Vermelho Project. Vermelho permits for 2018 are likely to include:
• Transfer of mineral rights from Vale to the Company’s nominated Brazilian entity;
• Submission of new Mine Plan to ANM;
• Submission of Operational Licence request for exploration activities at Vermelho Project.
10
horizonteminerals.com
BUSINESS REVIEW
Strategic Report
The Directors of the Company and its subsidiary undertakings (which together comprise ‘the Group’)
present their Strategic Report for the year ended 31 December 2017.
Review of the Business
The Group is focussed on the development of the enlarged Araguaia nickel project, in Brazil.
See the Chairman’s Statement on page 4 and Operations review on page 6 for detailed reviews of
the business during the year.
Aims, Strategy & Business Plan
The Group’s aim is to create value for shareholders through the development of the Araguaia Project
through to feasibility stage and into development.
The Group’s strategy is to continue to progress the development of the 100% owned Araguaia project
and to consolidate the Group’s existing landholdings in the Araguaia area. The Group also evaluates on
an ad hoc basis with a view to eventual acquisition, exploration and development of mineral projects in
jurisdictions in which it holds a presence, and/or in sectors in which management has expertise.
The Group’s business plan is to advance the combined and newly integrated Glencore Araguaia
Project (‘GAP’) and Araguaia projects (together the ‘Enlarged Project’) and enhance shareholder value.
The first step is to undertake a Feasibility Study, which will be a further milestone in progressive
development and de-risking of the Araguaia project and has been the core focus of the Group since
the acquisition of Araguaia in August 2010.
The Board seeks to run the Group with a low-cost base in order to maximise the amount that is spent
on exploration and development as this is where value can be added. To this extent, the corporate
office is run on a streamlined basis by a core team, and specialist skills and activities are outsourced
as appropriate, both in the United Kingdom and in Brazil.
The Group finances its activities through periodic capital raisings with share placings. As the Group
continues to develop its projects, there may be opportunities to obtain funding through other financial
instruments, including royalty, debt or other arrangements with strategic parties.
Principal Risks and Uncertainties
Set out below are the principal risks and uncertainties facing the Group:
Exploration risks
The exploration and mining business is controlled by a number of global factors, principally supply and
demand which in turn is a key driver in global metal prices; these factors are beyond the control of
the Group. Exploration is a high-risk business and there can be no guarantee that any mineralisation
discovered will result in proven and probable reserves or go on to be an operating mine. At every stage
of the exploration process the projects are rigorously reviewed, both internally and by qualified third
party consultants to determine if the results justify the next stage of exploration expenditure, ensuring
that funds are only applied to high priority targets.
The principal assets of the Group, comprising the mineral exploration licences are subject to certain
financial and legal commitments. If these commitments are not fulfilled the licences could be revoked.
The Group closely monitors on an ongoing basis its commitments and the expiry terms of all licenses in
order to ensure good title is maintained. They are also subject to legislation defined by the government
in Brazil; if this legislation is changed it could adversely affect the value of the Group’s assets.
11
Resource and reserves estimates
The Group’s reported resources and reserves are only estimates. No assurance can be given that
the estimated resources will be recovered or that they will be recovered at the rates estimated.
Mineral reserve and resource estimates are based on limited sampling and as a result are uncertain
because the samples may not be fully representative of the full resource. Mineral resource estimates
may require revision (either up or down) in future periods based on further drilling or actual
production experience.
Any future resource figures will be estimates and there can be no assurance that the minerals are
present, will be recovered or that they can be brought into profitable production. Furthermore, a
decline in the market price for natural resources, particularly nickel, could render reserves containing
relatively lower grades of these resources uneconomic to recover.
Country risk
The Group’s licences and operations are located in foreign jurisdictions. As a result, the Group
is subject to political, economic and other uncertainties, including but not limited to, changes in
policies or the personnel administering them, appropriation of property without fair compensation,
cancellation or modification of contract rights, royalty and tax increases and other risks arising out of
foreign governmental sovereignty over the area in which these operations are conducted.
Brazil is the current focus of the Group’s activity and offers stable political frameworks and actively
supports foreign investment. It has a well-developed exploration and mining code with proactive
support for foreign companies.
Volatility of commodity prices
Historically, commodity prices (including in particular the price of nickel) have fluctuated and are
affected by numerous factors beyond the Group’s control. The aggregate effect of these factors is
impossible to predict. Fluctuations in commodity prices in the long-term may adversely affect the
returns of the Group’s exploration projects.
Whilst the outlook and forecasts for nickel prices are generally positive, any significant reduction in the
global demand for nickel, leading to a fall in nickel prices, could lead to a significant fall in the cash flow
of the Group in future periods and/or delay in exploration and production, which may have a material
adverse impact on the operating results and financial position of the Group.
Financing
The successful exploration of natural resources on any project requires significant capital investment.
The Group currently sources finance through the issue of additional equity capital. The Group’s ability
to raise further funds will depend on the success of its investment strategy and acquired operations.
The Group successfully raised capital recently, which places it in a strong position, however, the Group
may not be successful in procuring the requisite funds on terms which are acceptable to take the
project forwards and, if such funding is unavailable, the Group may be required to reduce the scope
of its investments or anticipated expansion. As the Group is currently in the exploration stage it does
not generate revenues and is therefore reliant on its cash resources and obtaining additional financing
to funds its operations, should the cash resources deplete and should there be a lack of available
financing alternatives the Group may find it difficult to fund its working capital.
12
horizonteminerals.com BUSINESS REVIEW
Uninsured risk
The Group, as a participant in exploration and development
programmes, may become subject to liability for hazards that
cannot be insured against or third party claims that exceed the
insurance cover. The Group may also be disrupted by a variety of
risks and hazards that are beyond its control, including geological,
geotechnical and seismic factors, environmental hazards,
industrial accidents, occupation and health hazards and weather
conditions or other acts of God.
Financial risks
The Group’s operations expose it to a variety of financial risks,
particularly relating to foreign currency exchange rates as a
result of the Group’s foreign operations. The Group has a risk
management programme in place that seeks to limit the adverse
effects of these risks on the financial performance of the Group.
Details of the Group’s financial risk management objectives and
policies are set out in note 3 to the Financial Statements.
Dependence on key personnel
The Group is dependent upon its executive management team.
Whilst it has entered into contractual agreements with the aim
of securing the services of these personnel, as well as a long-
term incentive plan comprising options, the retention of their
services cannot be guaranteed. The development and success
of the Group depends on the ability to recruit and retain high
quality and experienced staff. The loss of service of key personnel
or the inability to attract additional qualified personnel as the
Group grows could have an adverse effect on future business
and financial conditions. To date the Group has been successful in
recruiting and retaining high quality staff.
Title risk
The Group’s current and future operations will require approvals
and permits from various federal, state and local governmental
authorities, and such operations are and will be governed by laws
and regulations governing prospecting, development, mining,
production, taxes, labour standards, health, waste disposal,
toxic substances, land use, environmental protection, mine
safety and other matters. There is no assurance that delays will
not occur in connection with obtaining all necessary renewals
of such approvals and permits for the existing operations or
additional approvals or permits for any possible future changes
to operations. Prior to any development on any of its properties,
the Group must receive permits from appropriate governmental
authorities. There can be no assurance that the Group will
continue to hold all permits necessary to develop or continue
operating at any particular property or obtain all required permits
on reasonable terms or on a timely basis.
13
Financial Performance Review
The Group is not yet producing minerals and so has no income other than bank interest. Consequently,
the Group is not expected to report profits until it disposes of or is able to profitably develop or
otherwise turn to account its exploration and development projects. The principal financial key
performance indicators (‘KPIs’) monitored by the Board concern levels and usage of cash.
The three main financial KPIs for the Group allow it to monitor costs and plan future exploration and
development activities and are as follows:
Cash and cash equivalents
Administrative expenses as a percentage of Total assets
Exploration costs capitalised as intangible assets during the year
2017
2016
£9,403,825
£9,317,781
2.4%
2.4%
£5,857,891
£2,265,831
KPI’s are not GAAP measurements and are not intended to be a substitute for these measures. The
KPI’s used by the Group may not be the same as those used by other companies and so should not be
used as such.
Administrative expenses as a percentage of total assets have remained constant, in light of significant
increase in overall activity as a direct result of the work undertaken on the FS.
Exploration costs capitalised as intangible assets relate to expenditure on the Araguaia project during
2017 and have increased significantly compared to the prior year due to the overall increase in work
on the FS and associated work programmes.
At 31 December 2017, the Group’s intangible assets had a carrying value of £34,308,278.
Non-Financial Key Performance Indicators (‘KPIs’)
The Board monitors the following non-financial KPIs on a regular basis.
Health and Safety – number of reported incidents
There were no significant reportable incidents in the current or prior year.
Operational performance
Good progress was made during the year on the completion of a FS on the Company’s flagship
Araguaia nickel project. This included drilling, trail excavation as well as engineering and
environmental work.
Fundraising
On 22 December 2017, a total of 200,000,000 new ordinary shares were issued through a private
placement in the United Kingdom at a price of £0.035 per share to raise £7,000,000 before expenses.
This was followed by a simultaneous raise of £2.2 million in Canada by way of issuing 60,587,500
shares raising gross proceeds of CAD$3,635,250, which closed in January 2018.
By order of the Board
Simon Retter
Company Secretary
26 March 2018
14
horizonteminerals.com
BUSINESS REVIEW
Year ended
31 December 2017
£
Year ended
31 December 2016
£
Loss before taxation
(1,667,156)
(1,746,334)
Cash and cash equivalents
9,403,825
9,317,781
Exploration assets
34,308,278
32,017,796
Net assets
39,241,815
37,054,455
Loss per share (pence)
0.142p
0.240p
Financial Review
Loss for the year
The loss for the year decreased slightly to £1,667,156 from
£1,746,334 in 2016 primarily due to changes in the fair value
of contingent consideration and a greater portion of overheads
being capitalised during the year. This was offset by an increase
in the share based payment charge as a result of the fair value of
options vesting during the period.
The Group has continued to keep a tight control on its
administrative costs, which increased in the year by £83,509 to
£1,093,132, as a direct result of the increased activity undertaken
during 2017 in Brazil as part of the FS.
Furthermore, total comprehensive loss attributable to equity
holders of £5,146,206 included loss on currency translation
differences of £3,479,050. This was due to the strengthening of
Sterling against both USD and BRL as at 31 December 2017,
as compared to 31 December 2016.
Cash and Cash Equivalents
The closing cash balance for the Group of £9,403,825 which is
slightly higher than £9,317,781 in the prior year, following the
fund raise of £7,000,000 before expenses by way of issuing
200,000,000 new shares at a price of 3.5 pence per share during
the year. Direct exploration expenditure was £5,740,740 in the
year, as compared to £2,265,831 in 2016. Expenditure in 2017
was significantly higher than in 2016 due to the focus of the
current year being on the publication of an updated FS compared
to field work undertaken in the prior year.
Exploration Assets
Exploration assets, which comprise the Araguaia project, have
increased to £34,308,278 as at 31 December 2017 as compared
to £32,017,796 as at 31 December 2016: The Group incurred
addition expenditure in the year, which included £5,740,740 in
relation to work undertaken on the feasibility study as well as a
significant foreign exchange revaluation loss of £3,479,050 as
Sterling appreciated against the Brazilian Real. The exploration
assets of the business are recorded in the functional currency of
Brazil, the country in which they are located.
The strategic report was approved by the board on 26 and is
signed on its behalf by Simon Retter.
Simon Retter
Company Secretary
26 March 2018
15
Board of Directors and
Key Management
A wealth of experience
The Group is focussed on the development of the enlarged Araguaia nickel project, in Brazil.
David J. Hall
BA (Hons), MSc, Fellow SEG, P.Geo, Non-Executive Chairman
Mr. Hall is a graduate in geology from Trinity College Dublin and
holds a Master’s Degree in Mineral Exploration from Queen’s
University, Kingston, Ontario. He has over 30 years of experience
in the exploration and mining sector and has worked on and
assessed exploration projects and mines in over 40 countries.
From 1992, Mr. Hall was Chief Geologist for Minorco, responsible
for Central and Eastern Europe, Central Asia and the Middle East.
He moved to South America in 1997 as a Consultant geologist
for Minorco South America and subsequently became exploration
manager for AngloGold South America in 1999, where he was
responsible for exploration around the Cerro Vanguardia gold
mine in Argentina, around the Morro Velho and Crixas mines in
Brazil and establishing the exploration programme that resulted
in the discovery of the La Recantada gold deposit in Peru as well
as certain joint ventures in Ecuador and Colombia. In April 2002,
Mr. Hall became an executive director of Minmet and operations
director in September 2002. Mr. Hall led the divestment of
Minmet’s exploration assets in the Dominican Republic into
GoldQuest Mining Corporation, which is listed on the TSX Venture
Exchange. Mr. Hall is also founder of Stratex International Plc,
an AIM traded company with exploration assets in Turkey and
in which Teck is an equity shareholder. Mr. Hall is a fellow of the
Society of Economic Geologists and EuroGeol.
Jeremy J. Martin
MSc, ASCM Director and Chief Executive Officer
Mr. Martin holds a degree in Mining Geology from the Camborne
School of Mines, and a Master’s Degree in mineral exploration
from the University of Leicester. He has worked in South America,
Central America and Europe, where he was responsible for
grassroots regional metalliferous exploration programmes
through to resources definition and mine development. Mr. Martin
has established a number of JV partnerships with major mining
companies and has been involved in the formation of four AIM
and TSX traded companies. He has served on a number of public
company boards and is a member of the Society of Economic
Geologists and the Institute of Mining Analysts.
Simon J Retter
BSc (Hons), ACA Chief Financial Officer and Company Secretary
Mr Retter has a degree in Accounting and Finance from the
University of Bristol and is a Chartered Accountant with over 10
years of experience in the mining industry. He has undertaken
numerous corporate finance transactions across a broad range
of industries including initial public offerings, reverse take overs
and secondary fund raisings. He has served as finance director
of Paragon Diamonds Ltd and currently holds the role of Finance
Director of Vale International Group Ltd a listed special purpose
acquisition vehicle targeting the technology sector. Mr Retter is a
member of the Institute of Chartered Accountants in England
and Wales.
Owen A. Bavinton
BSc (Hons), MSc, DIC, PhD, Non-Executive Director
Dr. Bavinton graduated from the University of Queensland in
Geology in 1969, holds a Master’s Degree in Mineral Exploration
from Imperial College, London and a PhD in Economic Geology
from ANU, Canberra, Australia. He has over 40 years of varied
international experience in the minerals exploration and
mining sector in several commodities. After brief periods as
a junior consultant and an underground mine geologist on a
Witwatersrand gold mine, from 1974 to 1985 he had several
positions with Western Mining Corporation, finally as director
of WMC’s activities in Brazil. From 1986 to 1992 he was Chief
Executive Officer of Aredor Guinea SA. In 1992 he joined the Anglo
American group where he stayed until his retirement in 2010.
Based initially in Turkey and then in Budapest, he was responsible
for Anglo American’s exploration and project evaluation activities
in the FSU, Central Europe and the Middle East. He moved to
London in 1998, initially as Head of Exploration for Minorco,
and later Group Head of Exploration and Geology for the Anglo
American Group. In those roles, he was responsible for worldwide
exploration and geosciences covering a range of exploration
projects, through all stages of development, including advanced
projects and feasibility studies, as well as providing geoscience
input into numerous acquisitions. He is a fellow of the Society
of Economic Geologists, the Association of Applied Geochemists
and the Institute of Materials, Mining and Metallurgy. Dr. Bavinton
is currently an independent consultant and speaks French
and Portuguese.
16
horizonteminerals.com CORPORATE GOVERNANCE
Allan M. Walker
MA, Non-Executive Director
Mr. Walker has over 30 years of experience in investment
banking and funds management, primarily focused on energy
sector project finance and private equity, particularly in emerging
markets. He has extensive contacts in the renewable energy
sector worldwide, as well as with governments, multilateral
agencies and regional development banks. Mr. Walker is currently
a consultant with UK Trade and Investment, where he is Head of
Project Finance on the Institutional Investment and Infrastructure
team, focusing on attracting foreign direct investment into
UK energy and infrastructure projects. Previously he was with
Masdar Capital in Abu Dhabi, as Executive Director, responsible
for managing the third party private equity funds management
business for Masdar, the Abu Dhabi government’s clean energy
and sustainability company. Prior to that he founded (in 2005)
and ran a similar private equity fund for Black River Asset
Management (UK) Limited, an indirectly held subsidiary of Cargill
Inc. Prior to Black River, Mr. Walker was head of power and
infrastructure in London for Standard Bank Plc, a world leader
in emerging markets resource banking. Mr. Walker was also
previously a director in the Global Energy and Project Finance
Group of Credit Suisse First Boston in London and ran the energy
group at CSFB Garantia in Sao Paulo, Brazil from 1998 to 2001,
where he spent seven years covering Latin America. He also
spent three years in the energy group of ING Barings in New York.
Mr. Walker graduated with an MA in economic geography from
Cambridge University in 1982 and received his financial training
on a one year residential training programme with JP Morgan in
New York in 1983. He speaks Portuguese and Spanish.
William Fisher
P.Geo, Non-Executive Director
Mr. Fisher graduated as a geologist in 1979 and has extensive
industry experience which has included a number of residential
posts in Africa, Australia, Europe and Canada in both exploration
and mining positions. Under his leadership, Karmin Exploration
discovered the Aripuanã base metal sulphide deposits in Brazil.
From 1997 to 2001 Mr. Fisher was Vice President, Exploration
for Boliden AB, a major European mining and smelting company
where he was responsible for thirty five projects in nine countries.
From 2001 to 2008, Bill led GlobeStar Mining Corp. from an
exploration company to an emerging base metal producer in the
Dominican Republic which developed and operated the Cerro
de Maimon mine until it was sold to Perilya for USD 186 million.
Mr. Fisher was also Chairman of Aurelian Resources which was
acquired by Kinross in 2008 for USD 1.2 Billion after the discovery
of the Fruta del Norte gold deposit in Ecuador. Mr. Fisher currently
serves as Executive Chairman of Goldquest Mining Corp. (TSX:
GCQ), independent director of Treasury Metals Inc. (TSX: TML) and
Chairman of Rame Energy (AIM: RAME).
Alexander N. Christopher
BSc (Hons), P.Geo, Non-Executive Director
Mr. Christopher, a professional geologist, has over 30 years of
experience in mineral exploration and the mining industry. He
is a member of the Association of Professional Engineers and
Geoscientists BC and possesses an Honours B.Sc. in Geology
from McMaster University and an Environmental Biology
Technology diploma from Canadore College. Mr. Christopher
currently holds the position of Senior Vice President, Exploration,
Projects & Technical Services at Teck. Mr. Christopher has been
with Teck since the mid-1980’s holding a number of positions
within the company. He is also currently a member of the Board
of Directors of the Prospectors and Developers Association of
Canada where he holds the position of Second Vice President.
Key Advisers
Dr Philip Mackey P.Eng, PhD, FCIM Senior Metallurgical Adviser
Dr Mackey is a consulting metallurgical engineer with over
forty years’ experience in non-ferrous metals processing with a
particular focus on nickel and copper sulphide smelting and nickel
laterite processing. He has worked for leading producers of nickel
including Falconbridge and Xstrata and throughout his career he
has been involved in a number of nickel sulphide projects and later
on, nickel laterite projects at various stages of the development
cycle. Dr Mackey’s extensive experience has seen him take
projects from the start-up stage, through the feasibility stages
and into the processing and production of non-ferrous metals.
Dr Mackey is a Member and Fellow of the Canadian Institute of
Mining and Metallurgy as well as the Metals and Minerals Society
USA. He has also authored or co-authored over 100 publications
regarding metallurgy with a particular focus on nickel and copper.
Dr Nic Barcza P.Eng, PhD – Senior Pyrometallurgical Adviser
Dr. Nic Barcza, has a PhD in Metallurgical Engineering and is a
registered Professional Engineer. Nic is an Executive Consultant to
Mintek in South Africa. He was the Chairman of Mintek’s wholly-
owned subsidiary Mindev Pty (Ltd), until the end of 2005 and
has served on a number of Boards such as Mogale Alloys (Pty)
Ltd, a ferroalloy and stainless steel dust/alloy recycling operation
near Johannesburg. He is a past-President and Honorary Life
Fellow of the South African Institute of Mining and Metallurgy
(SAIMM), chairman of the International Committee of INFACON,
a Fellow of the South African Academy of Engineering and has
served on several academic advisory Boards and the Council of
Wits University. Nic has worked on several titaniferous magnetite
projects and also advises and consults for several other companies
in South Africa and abroad including Anfield Nickel Corp. (Canada)
and Oriel Resources Ltd (UK) on nickel and chrome projects.
17
Directors’ Report
The Directors present their Annual Report on the affairs of Horizonte Minerals Plc, together with the
audited Financial Statements for the year ended 31 December 2017.
Principal activities
The principal activity of the Group and Company is the identification, acquisition, exploration and
development of mineral projects. The main area of activity comprises the development of the
Araguaia nickel project, located in Parà State in north-eastern Brazil.
Financial review
The Group recorded a loss for the year of £1,667,156 (2016: £1,746,334). The Group is currently
involved in exploration and evaluation activities and not actively mining. As a result, the Group is not
revenue generative.
On 22 December 2017 the Group issued 200,000,000 shares at a price of 3.5p per share raising gross
cash proceeds of £7,000,000.
At 31 December 2017, the Group had cash and cash equivalents of £9,403,825 (2016: £9,317,781).
The Directors have prepared cash flow forecasts for the 12 months from the date of signing of these
Financial Statements. The Directors have formed a judgement at the time of approving the Financial
Statements that there is a reasonable expectation that the Company and Group have adequate
resources to continue operations for the foreseeable future. For this reason, the Directors continue to
adopt the going concern basis in preparing the Financial Statements. Further details of the Directors’
conclusions regarding going concern are detailed in note 2.4 to the Financial Statements.
The Directors do not recommend payment of a dividend (2016: £Nil).
Sustainability
Safety: Safety cross-discipline workshop (HAZID) for
future Araguaia mine facilitated by ERM consultants
was conducted in 2017.
People: Strong and diverse owners team, including
a good presence of local and female employees. In
2017, over 60% of our direct employees originated
from the Pará State.
Social: The Company spent approximately R$67,000
on social investment projects in the region throughout
2017 and additionally provided in-kind support
through employee volunteering.
Rehabilitation: Horizonte has a strong record of
rehabilitation. The 2017 trial excavation area has been
entirely recovered with new topsoil and seeds planted
prior to the wet season.
Fauna & Flora: New fauna and flora inventories were
conducted throughout 2017 with over 20 biologists
participating, including specialists from the Pará State
Museum & Universities.
Permits: Construction Licence and Mine Licence
developed and submitted to agencies in 2017. The
Company is aiming to be “construction-ready” by
end of 2018.
18
horizonteminerals.com CORPORATE GOVERNANCE
People
As a Group, we understand the importance of our team in developing and growing the Company for
the future. We aim to create an environment that will attract, retain and motivate people to maximise
their potential.
Social
Horizonte currently conducts exploration in Brazil and recognises that there is a vital social dimension
to all exploration and mining activities. We are fortunate to maintain excellent relationships with
communities and landholders located close to, or on, our projects. This is largely as a result of our
policy to prioritise local labour and regularly consult community members about the Araguaia Project.
The Company implemented a “Talk With Us” engagement process in 2017, including suggestion boxes
and a phone line giving locals access to raise or discuss any queries about the Araguaia project.
Wherever possible, the Group supports local economic development by using local suppliers and over
60% of the Group’s workforce originate from the Brazilian state of Parà, where the project is located.
As Horizonte prepares the Araguaia Project to become “construction-ready”, the Company is gradually
increasing its social presence. Social activities in 2017 included:
• Sexual health education and disease prevention campaign;
• Furniture and books for two school libraries in direct area of influence of the future Araguaia mine;
• Training courses in rural towns in partnership with SENAI (Brazilian training institution);
• Support for cultural activities in the region;
• Environmental education;
• Rural road rehabilitation.
Environmental
Horizonte undertakes its exploration activities in a manner that aims to minimise or eliminate negative
environmental impacts and strives wherever possible to seek opportunities for positive impacts. To
ensure proper environmental stewardship on its projects, Horizonte conducts baseline studies prior
to all drill/ excavation programmes and ensures that areas explored are properly maintained and
conserved in accordance with Brazilian environmental legislation. After drilling or excavation activities,
sites and access routes are rehabilitated. The Company rigorously records and audits rehabilitation
efforts to ensure that they meet standards.
The Group also provides in-kind support through our employees to assist locals partake in good
environmental stewardship practices, for example, environmental education, donations of shrubs and
clean-up of waterways.
SEIA
As the project moves towards completing the Feasibility Study, the focus has been on creating one
integrated Social and Environmental Impact Assessment based on International Finance Corporation /
World Bank standards. Significant new data collections took place in 2017, including:
• New flora inventory for Araguaia Mine and water pipeline;
• Two new fauna campaigns conducted in dry and rainy seasons;
• Air and gas baseline;
• Meteorology;
• River flow monitoring of the Arraias River;
• Water levels and spring flows;
• Pump tests.
In partnership with ERM consultants across Brazil, UK and Canada; the Company has conducted
a range of studies to align with banking standards. Studies include, but are not limited to: Critical
Habitat Study, Resettlement Action Plan and Air/GHG plan. Ongoing data collection will continue to
be undertaken in 2018, including new collections on water and air quality as well as the set-up of a
permanent river flow monitoring station.
19
Health and safety
Horizonte operates a comprehensive health and safety programme to ensure the wellness and
security of its employees. The control and eventual elimination of all work-related hazards requires
dedicated team effort involving the active participation of all employees. A comprehensive health and
safety programme is the primary means for delivering best practices. This programme is regularly
updated to incorporate employee feedback, lessons learned from past incidents and new guidelines
related to new projects. Through this we aim to identify areas for further improvement of health and
safety management. Employee involvement is seen as fundamental in recognising and reporting
unsafe conditions and avoiding events that may result in injuries and accidents.
The Group operates with 6 ‘golden rules’ aimed at mitigating the majority of health and safety risks.
Annually, Horizonte management provides a detailed in-house review of the Company’s health and
safety programme hand in hand with all members of the Brazil exploration team.
Additionally, in 2017, ERM consultants facilitated a HAZID workshop, with participation from multiple
disciplines including Worley Parsons engineers to list and analyse potential risks for the future
Araguaia mine. Results will form part of the Araguaia Feasibility Study in 2018.
Substantial shareholdings
The Directors are aware of the following substantial interests or holdings in 3% or more of the
Company’s ordinary called up share capital as at 26 March 2018.
Major shareholders
Teck Resources Limited
Canaccord Genuity Group
JP Morgan
Lombard Odier Asset Management
City Financial
Richard Griffiths
Glencore
Number of shares
% of issued capital
210,207,179
150,000,000
118,394,838
116,126,242
108,190,476
96,550,000
74,507,195
14.7%
10.5%
8,3%
8.1%
7.6%
6.7%
5.2%
Share capital
Changes in the share capital of the Company are set out in note 13 of the Financial Statements.
Directors and their interests
The names of the Directors of the Company at the date of this report are shown in the Statutory
Information. Refer to notes 22 and 23 for further details.
The Directors who served during the year, together with their directly beneficial interests in the shares
of the Company as at 31 December 2017 are as follows:
Director
David Hall
Jeremy Martin
Owen Bavinton
Allan Walker
William Fisher
Alex Christopher
31 December 2017
31 December 2016
Shares
Options
Shares
Options
1,039,955
12,000,000
1,039,955
6,500,000
1,083,908
20,500,000
1,083,908
13,500,000
2,000,000
9,500,000
2,000,000
500,000
10,400,000
–
1,036,000
9,500,000
820,000
5,000,000
5,900,000
5,000,000
–
–
–
–
None of the Directors exercised any share options during the year.
There has been no change in the interests set out above between 31 December 2017 and 26 March 2018.
20
horizonteminerals.com
CORPORATE GOVERNANCE
Directors’ statement as to disclosure of information to auditor
The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as
they are individually aware, there is no relevant audit information of which the Company’s auditor is
unaware and the Directors have taken all the steps that they ought to have taken to make themselves
aware of any relevant audit information and to establish that the auditor is aware of the information.
Matters covered in the Strategic Report
The business review and review of KPIs are included in the Operations Review and Strategic Report.
Financial risk management
The Company is exposed through its operations to the following financial risks:
• Commodity price risk
• Foreign currency risk
• Credit risk
•
• Liquidity risk
Interest rate risk
In common with all other businesses, the Group is exposed to risks that arise from its area of operation,
these along with managements policies surrounding risk management are included in note 3.
Events after the reporting date
The events after the reporting date are set out in note 27 to the Financial Statements.
Future developments
In 2018 the Group will be working on publishing a Feasibility Study on the enlarged Araguaia project.
Furthermore, the permitting for the Araguaia project will continue to be advanced. The completion
of the transfer of title for Vermelho is expected and following this initial work towards a preliminary
economic study will be undertaken.
Directors and Officers Insurance
The Group provided Directors and Officers insurance for both the current and prior periods.
Annual General Meeting
The Notice of the Annual General Meeting of the Company and the Management Information Circular
together with Management Discussion and Analysis as at 31 December 2017 will be distributed to
shareholders together with the Annual Report. Full details of the business to be considered at that
meeting can be found in the Notice.
Independent auditor
The auditor, BDO LLP, will be proposed for reappointment in accordance with section 485 of the
Companies Act 2006.
BDO LLP has signified its willingness to continue in office as auditor.
By Order of the Board
Simon Retter
Company Secretary
26 March 2018
21
Statement of Directors’ Responsibilities
The directors are responsible for preparing the strategic report,
annual report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have elected to prepare the group and company financial
statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union. Under
company law the directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the group and company and
of the profit or loss of the group and company for that period.
The directors are also required to prepare financial statements
in accordance with the rules of the London Stock Exchange for
companies trading securities on the Alternative Investment
Market and in accordance with the rules of the Toronto
Stock Exchange.
In preparing these financial statements, the directors are
required to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether they have been prepared in accordance with
IFRSs as adopted by the European Union, subject to any
material departures disclosed and explained in the financial
statements;
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the company and enable them to ensure
that the financial statements comply with the requirements
of the Companies Act 2006. They are also responsible for
safeguarding the assets of the company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
Website publication
The directors are responsible for ensuring the annual report
and the financial statements are made available on a website.
Financial statements are published on the company’s website in
accordance with legislation in the United Kingdom governing the
preparation and dissemination of financial statements, which
may vary from legislation in other jurisdictions. The maintenance
and integrity of the company’s website is the responsibility of the
directors. The directors’ responsibility also extends to the ongoing
integrity of the financial statements contained therein.
By Order of the Board
Simon James Retter
Company Secretary
26 March 2018
22
horizonteminerals.com
CORPORATE GOVERNANCE
Corporate Governance Report
Internal controls
The Board recognises the importance of both financial and
non-financial controls and has reviewed the Company’s control
environment and any related shortfalls during the year. Since
the Company was established, the Directors are satisfied that,
given the current size and activities of the Company, adequate
internal controls have been implemented. Whilst they are aware
that no system can provide absolute assurance against material
misstatement or loss, in light of the current activity and proposed
future developments of the Company, continuing reviews of
internal controls will be undertaken to ensure that they are
adequate and effective.
Risk management
The Board considers risk assessment to be important in
achieving its strategic objectives. There is a process of evaluation
of performance targets through regular reviews by senior
management of forecasts. Project milestones and timelines are
regularly reviewed.
Securities trading
The Company has adopted a share dealing code for dealings in
shares by Directors and senior employees which is appropriate
for an AIM and TSX listed company. The Directors comply with
relevant AIM and TSX rules relating to Directors’ dealings and
take reasonable steps to ensure compliance by the Group’s
applicable employees.
Relations with shareholders
The Board is committed to providing effective communication
with the shareholders of the Company. Significant developments
are disseminated through stock exchange announcements
and regular updates on the Company website. The Board views
the Annual General Meeting as a forum for communication
between the Company and its shareholders and encourages
their participation in its agenda.
The Board of Directors
As at 31 December 2017, the Board of Directors comprised
six members: one Executive Director and five Non-Executive
Directors including the Chairman, Mr David Hall. The Executive
Director has a wealth of minerals exploration and development
experience. Similarly, the Non-Executive Directors have extensive
mineral and financial experience. Mr Owen Bavinton, Mr William
Fisher and Mr Allan Walker are classified as Independent by the
Toronto Stock Exchange.
Board meetings
The Board ordinarily meets approximately on a quarterly basis
and as and when further required, providing effective leadership
and overall management of the Company’s affairs by reference to
those matters reserved for its decision. This includes the approval
of the budget and business plan, major capital expenditure,
acquisitions and disposals, risk management policies and the
approval of the financial statements. Formal agendas, papers
and reports are sent to the Directors in a timely manner, prior to
the Board meetings. The Board delegates certain aspects of its
responsibilities to the Board committees which have terms of
reference as listed below.
Corporate governance practices
The Board recognises the importance of sound corporate
governance commensurate with the size of the Company and the
interests of Shareholders. As the Company grows, the Directors
will seek to develop policies and procedures in line with the
requirements of the Code of Best Practice (commonly known
as the ‘UK Corporate Governance Code’), as published by the
Financial Reporting Council so far as is practicable and considers
them to be appropriate taking into account the size and nature of
the Company.
Remuneration and audit committees
The remuneration committee comprises David Hall, William
Fisher and Allan Walker and is responsible for reviewing the
performance of the Executive Director and senior management
and for setting the framework and broad policy for the scale and
structure of their remuneration, taking into account all factors
which it shall deem necessary. The remuneration committee
also recommends the allocation of share options for the Board
to approve and is responsible for setting up any performance
criteria in relation to the exercise of options granted under any
share options schemes adopted by the Company.
The audit committee, comprising Owen Bavinton, David Hall,
William Fisher and Allan Walker, has primary responsibility for
monitoring the quality of internal controls, ensuring that the
financial performance of the Company is properly measured
and reported on and for reviewing reports from the Company’s
auditors relating to the Group’s accounting and internal controls.
23
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF HORIZONTE
MINERALS PLC
our audit of the financial statements in the UK, including the
FRC’s Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for
our opinion.
This report is made solely to the company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you where:
the directors’ use of the going concern basis of accounting
•
in the preparation of the financial statements is not
appropriate; or
the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the group’s or the parent company’s ability to
continue to adopt the going concern basis of accounting for a
period of at least twelve months from the date when the
financial statements are authorised for issue.
•
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Opinion
We have audited the financial statements of Horizonte Minerals
plc (the ‘parent company’) for the year ended 31 December 2017
which comprise the consolidated statements of comprehensive
income, the consolidated and company statements of financial
position, the consolidated and company statements of changes in
equity, the consolidated and company statements of cash flows
and notes to the financial statements including a summary of
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union and, as regards the parent company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
•
•
•
the financial statements give a true and fair view of the
state of the group’s and of the parent company’s affairs as
at 31 December 2017 and of the group’s loss for the year
then ended;
the group financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union;
the parent company financial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union and as applied in accordance with the
provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance
•
with the requirements of the Companies Act 2006.
Separate opinion in relation to IFRSs
as issued by the IASB
As explained in note 2.1 to the group financial statements, the
group in addition to complying with its legal obligation to apply
IFRSs as adopted by the European Union, has also applied IFRSs
as issued by the International Accounting Standards Board (IASB).
In our opinion the group financial statements give a true and fair
view of the consolidated financial position of the group as at 31
December 2017 and of its consolidated financial performance and
its consolidated cash flows for the year then ended in accordance
with IFRSs as issued by the IASB.
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the company in
accordance with the ethical requirements that are relevant to
24
horizonteminerals.com
FINANCIAL STATEMENTS
Carrying Value of Intangible Assets and Investments held by Parent Company
Key Audit Matter
As detailed in notes 10 and 25, the Group holds intangible assets of £34.4m and £51.2m of investments held by the
parent company in subsidiaries.
As detailed in note 2.5b, the Group’s intangible assets represent the legal rights to explore for minerals together with
the expenditure incurred in its exploration and evaluation of the mineral assets.
The investments represent the funding provided by the Parent Company to its Brazilian subsidiaries to use over the
course of the exploration stage and is the main source of funding for the costs capitalised under intangible assets.
Each year management are required to assess whether there has been any indication that the intangible assets
may be impaired. This is in accordance with the requirements of IFRS 6 - Exploration for and evaluation of mineral
resources. Management have carried out a review for indicators of impairment and have not identified any such
indicators.
Management have also concluded that no impairment provision is required against the carrying value of investments
in subsidiaries.
Reviewing indicators of impairment and assessment of carrying values often require significant estimates and
judgements and therefore we identified this as a key audit matter.
Audit Response
Our audit work included, but was not restricted to the following:
We reviewed Management’s assessment of the impairment indicators against IFRS 6. The indicators in IFRS 6 include
but are not limited to:
• The period for which the entity has the right to explore in the specific area has expired during the period or will
expire in the near future, and is not expected to be renewed.
• Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither
budgeted nor planned.
• Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the
specific area.
• Sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or
by sale.
We considered Management’s assessment of the indicators of impairment (as stated above) and we confirmed that
there is an ongoing plan to develop the licence areas. This assessment is supported by a pre-feasibility study published
in October 2016 and a feasibility study which is currently in progress.
We reviewed the correspondence, contracts and other documents regarding the licenses to confirm that the Group has
the relevant contractual rights for exploration in the stated areas such as Araguaia.
We agreed the validity of licences held by Horizonte Minerals Plc to the Brazilian Government’s DNPM website.
We considered whether there were any additional matters requiring consideration when assessing the carrying value
of the parent company’s investment in subsidiaries.
25
Valuation of Contingent Consideration
Key Audit Matter
In prior years, the Group acquired assets and licences relating to the Araguaia nickel project gave rise to contingent
consideration. As at 31 December 2017, the contingent consideration was £3.9m and details of this consideration and
the related critical judgements and estimates are disclosed in notes 17 and 4.3.
The assessment of the contingent consideration payable requires management to make judgements and estimates in
respect of a significant number of factors which influence the anticipated timing and value of cash flows arising from
the Araguaia nickel project, which in turn impact on the assessment of the estimated consideration payable.
Management are also required to reassess and adjust the contingent consideration payable for any changes in the
accounting estimates as new information and events arises.
Audit Response
Our audit work included, but was not restricted to the following:
We have reviewed the terms and conditions of the acquisition agreements relating to the contingent consideration
amounts payable and ensured that the calculation of contingent considerations is in accordance with them.
We have reviewed the contingent consideration calculations and key judgements and estimates made by management
supporting these calculations. We have challenged the judgements and estimates, referring to supporting
documentation and considered the sensitivity of the calculations to changes in the judgements and estimates.
We have checked the accounting adjustments for any change in estimates, foreign exchange retranslation and the
unwinding of the discount factor.
We have considered the adequacy of the disclosures.
Our application of materiality
We apply the concept of materiality both in planning
and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude
by which misstatements, including omissions, could influence
the economic decisions of reasonable users that are taken on
the basis of the financial statements. In order to reduce to an
appropriately low level the probability that any misstatements
exceed materiality, we use a lower materiality level, performance
materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not
necessarily be evaluated as immaterial as we also take account
of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on
the financial statements as a whole.
Our basis for the determination of materiality has remained
unchanged from prior year. We consider total assets to be the
most significant determinant of the group’s financial performance
used by shareholders. The benchmark percentage for calculating
materiality has remained unchanged from the prior year at
1.5%. We consider this to be one of the principal considerations
for members of the parent company in assessing the financial
performance of this asset based group.
Whilst materiality for the financial statements as a whole was
£570,000 (based on 30 September 2017 total asset figure
of £38.1m) (2016:£470,000), each significant component of
the group was audited to a lower level of materiality. These
materiality levels were used to determine the financial statement
areas that are included within the scope of our audit work and the
extent of sample sizes during the audit.
Performance materiality is the application of materiality at the
individual account or balance level set at an amount to reduce to
an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality.
Performance materiality was set at 75% (2016: 75%) of the above
materiality levels.
We agreed with the audit committee that we would report to the
committee all individual audit differences identified during the
course of our audit in excess of £28,500 (2016: £10,000). We also
agreed to report differences below these thresholds that, in our
view warranted reporting on qualitative grounds.
Materiality levels are not significantly different from those applied
in the previous year.
No revisions were made to materiality levels during the course of
the audit.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of
the Group and its environment, including the group’s system of
internal control, and assessing the risks of material misstatement
in the financial statements at the group level.
Whilst Horizonte Minerals plc is a Company registered in England
& Wales and its head office is located in the UK the Group’s
principal operations are located in Brazil. In approaching the
audit, we considered how the Group is organised and managed.
We assessed the activities of the group as being principally
a single project (the Araguaia Nickel project) and primarily
comprising a number of Brazilian subsidiary entities each holding
capitalised exploration and evaluation costs and exploration
licences and permits.
26
horizonteminerals.com The Group audit team performed audit work in respect of the
assessed risks. One subsidiary was assessed as significant due to
size and risk and three subsidiaries were classified as significant
due to specific risks. The group audit engagement team also
engaged BDO’s network firm in Brazil to carry out certain specific
audit procedures.
The remaining non-significant subsidiaries of the group were
principally subject to analytical review procedures.
Other information
The other information comprises the information included in
the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the
other information. Our opinion on the financial statements
does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If
we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there
is a material misstatement in the financial statements or a
material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed
by the Companies Act 2006
In our opinion, based on the work undertaken in the course of
the audit:
•
the information given in the strategic report and directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
the strategic report and directors’ report have been prepared
in accordance with applicable legal requirements.
•
Matters on which we are required
to report by exception
In the light of the knowledge and understanding of the group and
the parent company and its environment obtained in the course
of the audit, we have not identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of the following matters in
which the Companies Act 2006 requires us to report to you if, in
our opinion:
• adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
the parent company financial statements are not in
agreement with the accounting records and returns; or
•
FINANCIAL STATEMENTS
•
certain disclosures of directors’ remuneration specified by law
are not made; or
• we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate
the group or the parent company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit
of the financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken
on the basis of these financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Stuart Barnsdall (Senior Statutory Auditor)
For and on behalf of BDO LLP,
London, UK
27
Consolidated Statement of
Comprehensive Income
For the year ended 31 December 2017
Administrative expenses
Charge for share options granted
Changes in fair value of contingent consideration
(Loss)/Gain on foreign exchange
Operating loss
Finance income
Finance costs
Loss before taxation
Income tax
Loss for the year from continuing operations attributable to owners of the parent
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Currency translation differences on translating foreign operations
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to owners of the parent
Profit/(Loss) per share from continuing operations attributable to owners
of the parent
Notes
Year ended
31 December 2017
£
Year ended
31 December 2016
£
(1,093,132)
(1,009,623)
17
6
8
8
9
16
(678,652)
621,545
(299,834)
(324,890)
(260,632)
65,241
(1,450,073)
(1,529,904)
15,854
(232,937)
4,387
(220,817)
(1,667,156)
(1,746,334)
–
–
(1,667,156)
(1,746,334)
(3,479,050)
(3,479,050)
(5,146,206)
9,315,180
9,315,180
7,568,846
Basic and diluted (pence per share)
19
(0.142)
(0.240)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
28
horizonteminerals.com FINANCIAL STATEMENTS
Consolidated Statement
of Financial Position
Company number: 05676866
As at 31 December 2017
Assets
Non-current assets
Intangible assets
Property, plant & equipment
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Equity and liabilities
Equity attributable to owners of the parent
Share capital
Share premium
Other reserves
Retained losses
Total equity
Liabilities
Non-current liabilities
Contingent consideration
Deferred tax liabilities
Current liabilities
Trade and other payables
Total liabilities
Total equity and liabilities
Notes
31 December 2017
£
31 December 2016
£
10
11
12
13
14
16
17
9
17
34,308,278
32,017,796
2,051
862
34,310,329
32,018,658
153,105
9,403,825
9,556,930
35,493
9,317,781
9,353,274
43,867,259
41,371,932
13,719,343
40,422,258
988,015
11,719,343
35,767,344
4,467,064
(15,887,801)
(14,899,297)
39,241,815
37,054,454
3,635,955
253,205
3,889,160
736,284
736,284
3,643,042
282,450
3,925,492
391,986
391,986
4,625,444
4,317,478
43,867,259
41,371,932
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
The Financial Statements were authorised for issue by the Board of Directors on 26 March 2018 and were signed on its behalf.
David J Hall
Chairman
Jeremy J Martin
Chief Executive Officer
29
Company Statement of
Financial Position
Company number: 05676866
As at 31 December 2017
Assets
Non-current assets
Property, plant & equipment
Investment in subsidiaries
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Equity and liabilities
Equity attributable to equity shareholders
Share capital
Share premium
Other reserves
Retained losses
Total equity
Liabilities
Non-current liabilities
Contingent consideration
Current liabilities
Trade and other payables
Total liabilities
Total equity and liabilities
Notes
31 December 2017
£
31 December 2016
£
11
24
12
13
14
16
17
17
–
283
51,238,055
51,238,055
43,670,347
43,670,630
41,773
9,238,827
9,280,600
35,423
9,143,993
9,179,416
60,518,655
52,850,046
13,719,343
40,422,258
10,888,760
(8,960,902)
56,069,459
3,635,955
3,635,955
813,241
813,241
11,719,343
35,767,344
10,888,760
(9,915,498)
48,459,949
3,643,042
3,643,042
747,055
747,055
4,449,196
4,390,097
60,518,655
52,850,046
The above Company Statement of Financial Position should be read in conjunction with the accompanying notes, profit for the period was
£275,945 (2016:£602,827 loss). As permitted by section 408 of the Companies Act 2006, the statement of comprehensive income of the
Parent Company is not presented as part of these Financial Statements. The Financial Statements were authorised for issue by the Board
of Directors on 26 March 2018 and were signed on its behalf.
David J Hall
Chairman
Jeremy J Martin
Chief Executive Officer
30
horizonteminerals.com FINANCIAL STATEMENTS
Statements of
Changes in Equity
For the year ended 31 December 2017
Consolidated
As at 1 January 2016
Loss for the year
Other comprehensive income:
Currency translation differences on translating foreign operations
Total comprehensive income for the year
Attributable to owners of the parent
Share
capital
£
Share
premium
£
Retained
losses
£
Other
reserves
£
Total
£
6,712,044
31,252,708
(13,477,853)
(4,848,116)
19,638,783
–
–
–
–
(1,746,334)
–
(1,746,334)
–
–
–
9,315,180
9,315,180
(1,746,334)
9,315,180
9,315,180
Issue of ordinary shares
Trade and other receivables
Cash and cash equivalents
5,007,299
5,005,321
–
–
(490,685)
–
Total transactions with owners, recognised directly in equity
5,007,299
4,514,636
–
–
324,890
324,890
–
–
–
–
10,012,620
(490,685)
324,890
9,846,825
As at 31 December 2016
Loss for the year
Other comprehensive income:
Currency translation differences on translating foreign operations
Total comprehensive income for the year
11,719,343
35,767,344
(14,899,297)
4,467,064
37,054,454
–
–
–
–
(1,667,156)
–
(1,667,156)
–
–
–
(3,479,050)
(3,479,050)
(1,667,156)
(3,479,050)
(5,146,206)
Issue of ordinary shares
Issue costs
Share-based payments
2,000,000
5,000,000
–
–
(345,086)
–
Total transactions with owners, recognised directly in equity
2,000,000
4,654,914
–
–
678,652
678,652
–
–
–
–
7,000,000
(345,086)
678,652
7,333,566
As at 31 December 2017
13,719,343
40,422,258
(15,887,801)
988,015
39,241,815
A breakdown of other reserves is provided in note 16.
Company
As at 1 January 2016
Attributable to equity shareholders
Share
capital
£
Share
premium
£
Retained
losses
£
Other
reserves
£
Total
£
6,712,044
31,252,708
(9,637,561)
10,888,760
39,215,951
Loss and total comprehensive income for the year
–
–
(602,827)
Issue of ordinary shares
Issue costs
Share-based payments
5,007,299
5,005,321
–
–
(490,685)
–
Total transactions with owners, recognised directly in equity
5,007,299
4,514,636
–
–
324,890
324,890
–
–
–
–
–
(602,827)
10,012,620
(490,685)
324,890
9,846,825
As at 31 December 2016
11,719,343
35,767,344
(9,915,498)
10,888,760
48,459,949
Loss and total comprehensive income for the year
–
–
Total transactions with owners, recognised directly in equity
5,007,299
4,514,636
275,945
324,890
–
–
275,945
9,846,825
As at 31 December 2016
Issue of ordinary shares
Issue costs
Share-based payments
11,719,343
35,767,344
(14,899,297)
4,467,064
37,054,454
2,000,000
5,000,000
–
–
(345,086)
–
–
–
678,652
678,652
–
–
–
–
7,000,000
(345,086)
678,652
7,333,566
Total transactions with owners, recognised directly in equity
2,000,000
4,654,914
As at 31 December 2017
13,719,343
40,422,258
(8,960,902)
10,888,760
56,069,459
The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.
31
Consolidated Statement
of Cash Flows
For the year ended 31 December 2017.
Notes
31 December 2017
£
31 December 2016
£
Cash flows from operating activities
Loss before taxation
Finance income
Finance costs
Charge for share options granted
Exchange differences
Change in fair value of contingent consideration
Depreciation
Operating loss before changes in working capital
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Interest received
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of ordinary shares
Issue costs
Net cash generated from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gain/(loss) on cash and cash equivalents
Cash and cash equivalents at end of the year
12
(1,667,156)
(1,746,334)
(15,854)
232,937
678,652
(117,606)
(621,545)
283
(4,387)
220,817
324,890
(177,940)
260,632
1,084
(1,510,298)
(1,121,238)
(117,612)
344,298
(1,283,612)
22,588
242,965
(855,685)
(5,102,852)
(1,253,212)
(2,236)
15,854
–
4,387
(5,089,234)
(1,248,825)
7,000,000
(241,276)
6,758,724
385,878
9,317,781
(299,834)
9,403,825
9,000,000
(380,685)
8,619,315
6,514,805
2,738,905
64,071
9,317,781
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
32
horizonteminerals.com FINANCIAL STATEMENTS
Company Statement
of Cash Flows
For year ended 31 December 2017.
Cash flows from operating activities
(Loss)/profit before taxation
Finance costs
Finance income
Charge for share options granted
Exchange differences
Change in fair value of contingent consideration
Depreciation
Operating loss before changes in working capital
Increase in trade and other receivables
Increase in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Loans to subsidiary undertakings
Interest received
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of ordinary shares
Issue costs
Net cash generated from financing activities
Net increase/(decrease) in cash and cash equivalents
Exchange gain/(loss) on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of the year
Notes
31 December 2017
£
31 December 2016
£
275,945
232,937
(13,882)
678,652
(255,717)
(621,545)
283
296,673
(6,351)
66,186
356,508
(602,827)
220,817
(1,668)
324,890
283,555
260,632
971
486,370
(16,683)
244,182
713,869
(6,821,063)
(2,793,905)
13,881
1,668
(6,807,182)
(2,792,237)
7,000,000
(241,276)
6,758,724
308,050
(213,215)
9,143,993
9,238,827
9,000,000
(380,685)
8,619,315
6,540,947
34,779
2,568,266
9,143,993
12
The above Company Statement of Cash Flows should be read in conjunction with the accompanying notes.
33
Notes to the Financial Statements
1 General information
The principal activity of Horizonte Minerals Plc (‘the Company’) and its subsidiaries (together ‘the
Group’) is the exploration and development of base metals. The Company’s shares are listed on the
AIM market of the London Stock Exchange and on the Toronto Stock Exchange. The Company is
incorporated and domiciled in England and Wales. The address of its registered office is Rex House,
4-12 Regents Street, London, SW1Y 4RG.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these Financial Statements are set out
below. These policies have been consistently applied to all the years presented.
2.1 Basis of preparation
These Financial Statements have been prepared in accordance with International Financial Reporting
Standards (‘IFRSs’) and IFRS interpretations Committee (‘IFRS IC’) interpretations as adopted by the
European Union (‘EU’) and with IFRS and their Interpretations issued by the IASB. The consolidated
financial statements have also been prepared in accordance with and those parts of the Companies
Act 2006 applicable to companies reporting under IFRS. The Financial Statements have been prepared
under the historical cost convention as modified by the revaluation of contingent consideration and
share based payment charges which are measured at fair value.
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of
applying the Group’s Accounting Policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the Financial Statements, are
disclosed in Note 4.
2.2 Changes in accounting policy and disclosures
a) New and amended standards adopted by the Group
There are no IFRSs or IFRIC interpretations that were effective for the first time for the financial year
beginning 1 January 2017 that have had a material impact on the Group or Company.
b) New and amended standards, and interpretations issued but not yet effective for the financial
year beginning 1 January 2017 and not early adopted
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of
the financial statements are listed below. The Group intends to adopt these standards, if applicable,
when they become effective. Unless stated below, there are no IFRSs or IFRIC interpretations that are
not yet effective that would be expected to have a material impact on the Group.
Standard
IFRS 9 Financial Instruments
IFRS 16 Leases
IFRS 15 Revenue from contracts with Customers
All endorsed by the EU.
The only standard which is anticipated to be significant or relevant to the Group is IFRS 9 “Financial
Instruments”, the Group is in the process of assessing the quantitative implications of the standards
on the Financial Statements. It is expected that the contingent consideration payable to both Glencore
and following completion of the transfer of legal title, Vermelho will be effected as well as the
intercompany loan receivable balance for the Company only.
34
Effective Date
1 January 2018
1 January 2019
1 January 2018
horizonteminerals.com FINANCIAL STATEMENTS
Both IFRS 15 ‘Revenue from Contracts with Customers’ and IFRS 16 ‘Leases’ are not expected to
have a material impact on the Group at this stage of the Group’s operations. The Group presently
has no revenue and the only leases that it holds relates to a short term lease held for office space in
both the United Kingdom and its office in Brazil. These total approximately £80,000 per year and are
renewed for a maximum of 12 months at a time.
2.3 Basis of consolidation
Horizonte Minerals Plc was incorporated on 16 January 2006. On 23 March 2006 Horizonte Minerals
Plc acquired the entire issued share capital of Horizonte Exploration Limited (HEL) by way of a share
for share exchange. The transaction was treated as a group reconstruction and was accounted for
using the merger accounting method as the entities were under common control before and after
the acquisition.
Subsidiaries are entities controlled by the Group. Control is achieved when the Group is exposed, or
has rights, to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee.
The Group considers all relevant facts and circumstances in assessing whether it has power over an
investee, including:
• The contractual arrangement with the other vote holders of the investee.
• Rights arising from other contractual arrangements.
• The Group’s voting rights and potential voting rights.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated financial statements from the
date the Group gains control until the date the Group ceases to control the subsidiary.
Other than for the acquisition of HEL as noted above, the Group uses the acquisition method of
accounting to account for business combinations. The consideration transferred for the acquisition of
a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests
issued by the Group. The consideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at
the acquisition date. Acquisition-related costs are expensed as incurred unless they result from the
issuance of shares, in which case they are offset against the premium on those shares within equity.
If an acquisition is achieved in stages, the acquisition date carrying value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit
or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed
to be an asset or a liability is recognised in accordance with IAS 39 either in profit or loss or as a
change in other comprehensive income. The unwinding of the discount on contingent consideration
liabilities is recognised as a finance charge within profit or loss. Contingent consideration that is
classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
The excess of the consideration transferred and the acquisition date fair value of any previous equity
interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired
is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in
the case of a bargain purchase, the difference is recognised directly in profit or loss.
Inter-company transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with policies adopted by the Group.
Investments in subsidiaries are accounted for at cost less impairment.
35
The following 100% owned subsidiaries have been included within the consolidated Financial
Statements:
Subsidiary undertaking
Horizonte Exploration Ltd
Horizonte Minerals (IOM) Ltd
HM Brazil (IOM) Ltd
Cluny (IOM) Ltd
Champol (IOM) ltd
Horizonte Nickel (IOM) Ltd
HM do Brasil Ltda
Held
Directly
Indirectly
Indirectly
Indirectly
Indirectly
Indirectly
Indirectly
Araguaia Niquel Metias Ltda
Indirectly
Lontra Empreendimentos e Participações Ltda
Indirectly
Typhon Brasil Mineração Ltda
Indirectly
Trias Brasil Mineração Ltda
Indirectly
Registered Addess
Rex House, 4-12 Regents Street,
London SW1Y 4RG
Country of
incorporation
England
Devonshire House, 15 St Georges St,
Douglas, Isle of Man,
Isle of Man
Devonshire House, 15 St Georges St,
Douglas, Isle of Man,
Isle of Man
Devonshire House, 15 St Georges St,
Douglas, Isle of Man,
Isle of Man
Devonshire House, 15 St Georges St,
Douglas, Isle of Man,
Isle of Man
Nature of business
Mineral Exploration
Holding company
Mineral Exploration
Holding company
Mineral Exploration
Holding company
Mineral Exploration
Holding company
Mineral Exploration
Holding company
CNPJ 07.819.038/0001-30 com sede
na Avenida Amazonas, 2904, loja 511,
Bairro Prado, Belo Horizonte – MG.
CEP: 30.411-186
CNPJ 07.819.038/0001-30 com sede
na Avenida Amazonas, 2904, loja 511,
Bairro Prado, Belo Horizonte – MG.
CEP: 30.411-186
CNPJ 07.819.038/0001-30 com sede
na Avenida Amazonas, 2904, loja 511,
Bairro Prado, Belo Horizonte – MG.
CEP: 30.411-186
CNPJ 07.819.038/0001-30 com sede
na Avenida Amazonas, 2904, loja 511,
Bairro Prado, Belo Horizonte – MG.
CEP: 30.411-186
CNPJ 23.282.640/0001-37 com sede
Alameda Ezequiel Dias, n. 427, 2º
andar, bairro Funcionários, Município
de Belo Horizonte, Estado de Minas
Gerais, CEP 30.130-110.
CNPJ 23.282.280/0001-73 com sede
na Alameda Ezequiel Dias, n. 427, 2º
andar, bairro Funcionários, Município
de Belo Horizonte, Estado de Minas
Gerais, CEP 30.130-110
Brazil
Mineral Exploration
Brazil
Mineral Exploration
Brazil
Mineral Exploration
Brazil
Mineral Exploration
Brazil
Mineral Exploration
Brazil
Mineral Exploration
2.4 Going concern
The Group’s business activities together with the factors likely to affect its future development,
performance and position are set out in the Chairman’s Statement on pages 4 and 5; in addition note
3 to the Financial Statements includes the Group’s objectives, policies and processes for managing its
capital; its financial risk management objectives; details of its financial instruments and its exposure
to credit and liquidity risk.
The Financial Statements have been prepared on a going concern basis. Although the Group’s assets
are not generating revenues and an operating loss has been reported, the Directors consider that
the Group has sufficient funds to undertake its operating activities for a period of at least the next 12
months including any additional expenditure required in relation to its current exploration projects.
The Group has cash reserves which are considered sufficient by the Directors to fund the Group’s
committed expenditure both operationally and on its exploration projects for the foreseeable future.
However, as additional projects are identified and the Araguaia project moves towards production,
additional funding will be required.
As a result of considerations noted above, the Directors have a reasonable expectation that the
Group and Company have adequate resources to continue in operational existence for the foreseeable
future. Thus they continue to adopt the going concern basis of accounting in preparing these
Financial Statements.
36
horizonteminerals.com FINANCIAL STATEMENTS
2.5 Intangible Assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of
the net identifiable assets, liabilities and contingent liabilities of the acquired subsidiary at the date of
acquisition. Goodwill arising on the acquisition of subsidiaries is included in ‘intangible assets’. Goodwill
is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment
losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is
made to those cash-generating units or groups of cash-generating units that are expected to benefit
from the business combination in which the goodwill arose, identified according to operating segment.
(b) Exploration and evaluation assets
The Group capitalises expenditure in relation to exploration and evaluation of mineral assets when
the legal rights are obtained. Expenditure included in the initial measurement of exploration and
evaluation assets and which are classified as intangible assets relate to the acquisition of rights to
explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching,
sampling and activities to evaluate the technical feasibility and commercial viability of extracting a
mineral resource.
Exploration and evaluation assets arising on business combinations are included at their acquisition-
date fair value in accordance with IFRS 3 (revised) ‘Business combinations’. Other exploration
and evaluation assets and all subsequent expenditure on assets acquired as part of a business
combination are recorded and held at cost.
Exploration and evaluation assets are assessed for impairment when facts and circumstances
suggest that the carrying amount of an asset may exceed its recoverable amount. The assessment is
carried out by allocating exploration and evaluation assets to cash generating units, which are based
on specific projects or geographical areas.
Whenever the exploration for and evaluation of mineral resources does not lead to the discovery of
commercially viable quantities of mineral resources or the Group has decided to discontinue such
activities of that unit, the associated expenditures are written off to profit or loss.
2.6 Property, plant and equipment
All property, plant and equipment is stated at historic cost less accumulated depreciation. Historic cost
includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. All repairs and maintenance costs are
charged to profit or loss during the financial period in which they are incurred.
Depreciation is charged on a straight-line basis so as to write off the cost of assets, over their
estimated useful lives, using the straight-line method, on the following bases:
Office equipment
Vehicles and other field equipment
25%
25% – 33%
The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the assets
carrying amount is greater than its estimated recoverable amount.
37
(2) each component of profit or loss is translated at average
exchange rates during the accounting period (unless this
average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the dates
of the transactions); and
(3) all resulting exchange differences are recognised in other
comprehensive income. On consolidation, exchange
differences arising from the translation of the net investment
in foreign entities, and of monetary items receivable from
foreign subsidiaries for which settlement is neither planned
nor likely to occur in the foreseeable future are taken to
other comprehensive income. When a foreign operation is
sold, such exchange differences are recognised in profit or
loss as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of
a foreign entity are treated as assets and liabilities of the foreign
entity and retranslated at the end of each reporting period.
2.9 Financial assets
The Group classifies its financial assets as loans and receivables.
(a) Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective
interest rate method, less impairment. The Group’s loans and
receivables comprise ‘trade and other receivables’ and ‘cash and
cash equivalents’ in the Consolidated Statement of Financial
Position and loans to group undertakings in the Company
Statement of Financial Position.
2.7 Impairment of non-financial assets
Assets that have an indefinite useful life, such as goodwill or
intangible exploration assets not ready to use, are not subject to
amortisation and are tested annually for impairment. Intangible
assets that are subject to amortisation and property, plant and
equipment are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of
an asset’s fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash
flows (cash generating units). Non-financial assets other than
goodwill that suffered an impairment are reviewed for possible
reversal of the impairment at each reporting date.
2.8 Foreign currency translation
(a) Functional and presentation currency
Items included in the Financial Statements of the Group’s
entities are measured using the currency of the primary
economic environment in which the entity operates (the
‘functional currency’). The functional currency of the UK and
Isle of Man entities is Pounds Sterling and the functional currency
of the Brazilian entities is Brazilian Real. The Consolidated
Financial Statements are presented in Pounds Sterling, rounded
to the nearest pound, which is the Company’s functional and
Group’s presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where such items are re-measured.
Foreign exchange gains and losses resulting from the settlement
of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in profit or loss.
(c) Group companies
The results and financial position of all the Group’s entities
(none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
(1) assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of that
statement of financial position;
38
horizonteminerals.com
FINANCIAL STATEMENTS
Deferred tax is accounted for using the liability method in respect
of temporary differences arising from differences between
the carrying amount of assets and liabilities in the financial
statements and the corresponding tax bases used in the
computation of taxable profit. However, deferred tax liabilities are
not recognised if they arise from the initial recognition of goodwill;
deferred tax is not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither
accounting nor taxable profit or loss.
Deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Deferred
tax assets are recognised on tax losses carried forward to the
extent that the realisation of the related tax benefit through
future taxable profits is probable.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Company is
able to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax
liabilities and when the deferred tax assets and liabilities relate
to taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where there is an
intention to settle the balances on a net basis.
Deferred tax is calculated at the tax rates (and laws) that have
been enacted or substantively enacted by the Statement of
Financial Position date and are expected to apply to the period
when the asset is realised or the liability is settled.
Deferred tax assets and liabilities are not discounted.
Derecognition
A financial asset is derecognised when the rights to receive cash
flows from the asset have expired.
2.10 Cash and cash equivalents
In the Statement of Financial Position and Statement of Cash
Flows, cash and cash equivalents comprise cash at bank and
in hand and demand deposits with banks and other financial
institutions, that are readily convertible into known amounts of
cash and which are subject to an insignificant risk of changes
in value.
2.11 Impairment of financial assets
(a) Assets carried at amortised cost
The Group assesses at the end of each reporting period whether
there is objective evidence that a financial asset or group of
financial assets is impaired. A financial asset or a group of
financial assets is impaired and impairment losses are incurred
only if there is objective evidence of impairment as a result of one
or more events that occurred after the initial recognition of the
asset (a ‘loss event’) and that loss event (or events) has an impact
on the estimated future cash flows of the financial asset or group
of financial assets that can be reliably estimated.
For loans and receivables category, the amount of the loss is
measured as the difference between the asset’s carrying amount
and the present value of estimated future cash flows (excluding
future credit losses that have not been incurred) discounted at
the financial asset’s original effective interest rate. The carrying
amount of the asset is reduced and the amount of the loss is
recognised in the Consolidated Income Statement.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised (such as
an improvement in the debtor’s credit rating), the reversal of
the previously recognised impairment loss is recognised in the
Consolidated Income Statement.
2.12 Taxation
The tax credit or expense for the period comprises current
and deferred tax. Tax is recognised in the Income Statement,
except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax
is also recognised in other comprehensive income or directly in
equity, respectively.
The charge for current tax is calculated on the basis of the tax
laws enacted or substantively enacted by the end of the reporting
period in the countries where the company and its subsidiaries
operate and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
39
2.13 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
2.14 Financial liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for
which the liability was acquired.
Fair value through profit or loss
This category comprises the contingent consideration which are carried in the consolidated statement
of financial position at fair value with changes in fair value recognised in the consolidated statement of
comprehensive income.
Other financial liabilities
Trade payables and other short-term monetary liabilities, which are initially recognised at fair value
and subsequently carried at amortised cost using the effective interest method.
2.15 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Accounts payable are classified as current liabilities if payment is
due within one year or less. If not, they are presented as non-current liabilities.
Trade payables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method.
2.16 Operating leases
Leases of assets under which a significant amount of the risks and benefits of ownership are
effectively retained by the lessor are classified as operating leases. Operating lease payments are
charged to the Income Statement on a straight-line basis over the period of the respective leases.
40
horizonteminerals.com FINANCIAL STATEMENTS
2.17 Share-based payments and incentives
The Group operates equity-settled, share-based compensation plans, under which the entity receives
services from employees as consideration for equity instruments (options) of the Group. The fair
value of employee services received in exchange for the grant of share options are recognised as an
expense. The total expense to be apportioned over the vesting period is determined by reference to
the fair value of the options granted:
including any market performance conditions;
•
• excluding the impact of any service and non-market performance vesting conditions; and
•
including the impact of any non-vesting conditions.
Non-market performance and service conditions are included in assumptions about the number of
options that are expected to vest. The total expense is recognised over the vesting period, which is
the period over which all of the specified vesting conditions are to be satisfied. At the end of each
reporting period the Group revises its estimate of the number of options that are expected to vest.
It recognises the impact of the revision of original estimates, if any, in profit or loss, with a
corresponding adjustment to equity.
When options are exercised, the Company issues new shares. The proceeds received net of any
directly attributable transaction costs are credited to share capital (nominal value) and share premium.
The fair value of goods or services received in exchange for shares is recognised as an expense.
2.18 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
Chief Executive Officer, the Company’s chief operating decision-maker (“CODM”).
2.19 Finance income
Interest income is recognised using the effective interest method, taking into account the principal
amounts outstanding and the interest rates applicable.
2.20 Provisions and Contingent Liabilities
Provisions are recognised when the Group has a present legal or constructive obligation as a result of
past events; it is probable that an outflow of resources will be required to settle the obligation; and the
amount can be reliably estimated.
Provisions are measured at the present value of the expenditures expected to be required to settle
the obligation using a pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the obligation. The increase in the provision due to passage of time is
recognised as finance cost.
Contingent liabilities are potential obligations that arise from past events and whose existence will
only be confirmed by the occurrence of one or more uncertain future events that, however, are beyond
the control of the Group. Furthermore, present obligations may constitute contingent liabilities if it
is not probable that an outflow of resources will be required to settle the obligation, or a sufficiently
reliable estimate of the amount of the obligation cannot be made.
41
3 Financial risk management
3.1 Financial risk factors
The main financial risks to which the Group’s activities are exposed are liquidity and fluctuations on
foreign currency. The Group’s overall risk management programme focusses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.
Risk management is carried out by the Board of Directors under policies approved at the quarterly
Board meetings. The Board frequently discusses principles for overall risk management including
policies for specific areas such as foreign exchange.
(a) Liquidity risks
In keeping with similar sized mineral exploration groups, the Group’s continued future operations
depend on the ability to raise sufficient working capital through the issue of equity share capital.
The Group monitors its cash and future funding requirements through the use of cash flow forecasts.
All cash, with the exception of that required for immediate working capital requirements, is held on
short-term deposit.
(b) Foreign currency risks
The Group operates internationally and is exposed to foreign exchange risk arising from various
currency exposures, primarily with respect to the Brazilian Real, US Dollar and the Pound Sterling.
Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and
net investments in foreign operations that are denominated in a foreign currency. The Group holds
a proportion of its cash in US Dollars and Brazilian Reals to hedge its exposure to foreign currency
fluctuations and recognises the profits and losses resulting from currency fluctuations as and when
they arise. The volume of transactions is not deemed sufficient to enter into forward contracts.
At 31 December 2017, if the Brazilian Real had weakened/strengthened by 20% against Pound
Sterling and US Dollar with all other variables held constant, post tax loss for the year would have
been approximately £17,287 lower/higher mainly as a result of foreign exchange losses/gains on
translation of Brazilian Real expenditure and denominated bank balances.
(c) Interest rate risk
As the Group has no borrowings, it is not exposed to interest rate risk on financial liabilities. The
Group’s interest rate risk arises from its cash held on short-term deposit for which the Directors use a
mixture of fixed and variable rate deposits. As a result, fluctuations in interest rates are not expected
to have a significant impact on profit or loss or equity.
(d) Price risk
Given the size and stage of the Group’s operations, the costs of managing exposure to commodity
price risk exceed any potential benefits. The Directors will revisit the appropriateness of this policy
should the Group’s operations change in size or nature.
(e) Credit risk
Credit risk arises from cash and cash equivalents and outstanding receivables. The Group maintains
cash and short-term deposits with a variety of credit worthy financial institutions and considers
the credit ratings of these institutions before investing in order to mitigate against the associated
credit risk.
The Company’s exposure to credit risk amounted to £58,128,840 (2016: £50,476,298). Of this
amount £48,890,013 (2016: £41,332,305) is due from subsidiary companies, £9,238,827 represents
cash holdings (2016: £9,143,993)
42
horizonteminerals.com FINANCIAL STATEMENTS
3.2 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as
a going concern, in order to provide returns for shareholders and to enable the Group to continue
its exploration and evaluation activities. The Group has no debt at 31 December 2017 and defines
capital based on the total equity of the Group. The Group monitors its level of cash resources available
against future planned exploration and evaluation activities and may issue new shares in order to raise
further funds from time to time.
As indicated above, the Group holds cash reserves on deposit at several banks and in different
currencies until they are required and in order to match where possible with the corresponding
liabilities in that currency.
3.3 Fair value estimation
The carrying values of trade receivables and payables are assumed to be approximate to their fair
values, due to their short-term nature. The fair value of contingent consideration is estimated by
discounting the future expected contractual cash flows at the Group’s current cost of capital of 7%
based on the interest rate available to the Group for a similar financial instrument.
4 Critical accounting estimates and judgements
The preparation of the Financial Statements in conformity with IFRSs requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the end of the reporting period and the reported amount
of expenses during the year. Actual results may vary from the estimates used to produce these
Financial Statements.
Estimates and judgements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under
the circumstances.
Significant items subject to such judgements include, but are not limited to:
4.1 Impairment of exploration and evaluation costs
Exploration and evaluation costs have a carrying value at 31 December 2017 of £34,057,215 (2016:
£31,737,737 ). Each exploration project is subject to an annual review by either a consultant or
senior company geologist to determine if the exploration results returned to date warrant further
exploration expenditure and have the potential to result in an economic discovery. This review takes
into consideration long-term metal prices, anticipated resource volumes and grades, permitting
and infrastructure. In the event that a project does not represent an economic exploration target
and results indicate there is no additional upside, a decision will be made to discontinue exploration.
The judgement exercised by management relates to whether there is perceived to be an indicator
of impairment and that management have concluded that there is not, due to the recovery in the
Nickel prices, favourable economics of the PFS as well as ongoing support from the equity markets to
advance the project by way of closing a fund raise at the end of 2017.
4.2 Estimated impairment of goodwill
Goodwill has a carrying value at 31 December 2017 of £251,063 (2016: £280,059 ) which is included
in intangible assets. The Group tests annually whether goodwill has suffered any impairment, in
accordance with the accounting policy stated in note 2.7.
Management has concluded that there is no impairment charge necessary to the carrying value of
goodwill. The judgements exercised in arriving at this decision are the same as described in 4.1 above.
See also note 10 to the Financial Statements.
43
Estimates and assumptions include, but are not limited to:
4.3 Contingent consideration
Contingent consideration has a carrying value of £3,635,955, at 31 December 2017 (2016:
£3,643,042). there are two contingent consideration arrangements in place as at 31 December 2017:
• A contingent consideration arrangement that requires the Group to pay the former owners of
Teck Cominco Brasil S.A (subsequently renamed Araguaia Niquel Mineração Ltda) 50% of the tax
saving upon utilisation of the tax losses existing in Teck Cominco Brasil S.A at the date of
acquisition. Under the terms of the acquisition agreement, tax losses that existed at the date of
acquisition and which are subsequently utilised in a period greater than 10 years from that date
are not subject to the contingent consideration arrangement.
This acquisition was accounted for as a business combination and an assessment of the fair value
of the contingent consideration was made at the date of acquisition. This fair value is reassessed
in each subsequent accounting period. In arriving at an estimate of the fair value management
make an assessment of the probability of utilisation of all or part of the tax losses by the end
of the 10 year period which is August 2020. The Group has used discounted cash flow analysis
to determine when it is anticipated that the tax losses will be utilised and any potential contingent
consideration paid. These cash flows could be affected by movements in a number of factors
including the timing of the development and commissioning of the project, commodity prices,
operating costs, capital expenditure, production levels, grades, recoveries and interest rates.
Because of the condition of the acquisition agreement to utilise tax losses prior to August 2020
a critical assumption in the assessment of value of the contingent consideration is the timing of
commencement of profitable production, which for the financial year ending 31 December 2017
has been re-assessed as taking place after August 2020.
• A contingent consideration arrangement that requires the Group to pay Xstrata Brasil Mineração
Ltda US$1,000,000 after the date of issuance of a Feasibility Study comprising the Araguaia
project and the Vale dos Sonhos (‘VdS’) and Serra do Tapa (‘SdT’) project areas (‘GAP’) (together
the ‘Enlarged Project’), to be satisfied in shares in the Company (at the 5 day volume weighted
average price taken on the tenth business day after the date of such issuance) or cash, at the
election of the Company; and remaining consideration of US$5,000,000 to be paid in cash, as
at the date of first commercial production from any of the resource areas within the Enlarged
Project area. Although a number of the critical assumptions relating to the assessment of the
contingent consideration of US$5,000,000 are similar to those described above for the contingent
consideration payable to the former owners of Teck Cominco Brasil S.A there is no linkage to
utilisation of tax losses by a fixed date.
The Contingent consideration is considered to be a level 3 hierarchy valuation, the following are
unobservable inputs for the valuation model: Discount rate and probability factor. In addition, the
model includes the foreign exchange rate.
Management have sensitized the fair value calculation to reasonable changes in the unobservable
inputs and note that if the discount rate were to increase from 7% to 10% then the FV would decrease
by £269,255 to £3,366,700.
There has been no change in valuation technique during the period.
44
horizonteminerals.com
FINANCIAL STATEMENTS
4.4 Current and deferred taxation
The Group is subject to income taxes in numerous jurisdictions. Judgment is required in determining
the worldwide provision for such taxes. The Group recognises liabilities for anticipated tax issues
based on estimates of whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such differences will affect the
current and deferred income tax assets and liabilities in the period in which such determination
is made.
Deferred tax liabilities have been recognised on the fair value gains in exploration assets arising
on the acquisitions of Araguaia Niquel Mineração Ltda (formerly Teck Cominco Brasil S.A) and
Lontra Empreendimentos e Participações Ltda. A deferred tax asset in respect of the losses has
been recognised on acquisition of Araguaia Niquel Mineração Ltda to the extent that it can be set
against the deferred tax liability arising on the fair value gains. In determining whether a deferred
tax asset in excess of this amount should be recognized management must make an assessment
of the probability that the tax losses will be utilized and a deferred tax asset is only recognised if it is
considered probable that the tax losses will be utilized.
Other estimates include but are not limited to future cash flows associated with assets, useful lives
for depreciation and fair value of financial instruments.
45
5 Segmental reporting
The Group operates principally in the UK and Brazil, with operations managed on a project by project
basis within each geographical area. Activities in the UK are mainly administrative in nature whilst the
activities in Brazil relate to exploration and evaluation work. The reports used by the chief operating
decision-maker are based on these geographical segments.
2017
Administrative expenses
Loss on foreign exchange
Loss from operations per reportable segment
Depreciation charges
Additions to non-current assets
Reportable segment assets
Reportable segment non-current assets
Reportable segment liabilities
2016
Administrative expenses
Loss on foreign exchange
UK 2017
£
Brazil 2017
£
Other 2017
£
(1,093,132)
(261,218)
(1,354,350)
(283)
–
(38,616)
(38,616)
–
–
2,319,479
9,359,155
34,508,104
–
34,308,278
4,029,066
596,378
UK 2017
£
(802,409)
46,454
Brazil 2016
£
(207,214)
18,787
Total 2017
£
(1,093,132)
(299,834)
(1,392,966)
(283)
2,319,479
43,867,259
34,308,278
4,625,444
Total 2016
£
(1,009,623)
65,241
(944,382)
(1,084)
11,578,410
41,371,932
32,018,658
4,317,477
–
–
–
–
–
–
–
–
Other 2016
£
–
–
–
–
–
–
–
–
Loss from operations per reportable segment
(755,955)
(188,427)
Depreciation charges
Additions to non-current assets
Reportable segment assets
Reportable segment non-current assets
Reportable segment liabilities
(970)
(114)
–
11,578,410
9,309,132
32,062,800
–
32,018,658
3,969,966
347,511
Inter segment revenues are calculated and recorded in accordance with the underlying intra group service agreements.
A reconciliation of adjusted loss from operations per reportable segment to loss before tax is provided as follows:
Loss from operations per reportable segment
Changes in fair value of contingent consideration (refer note 17)
Charge for share options granted
Finance income
Finance costs
Loss for the year from continuing operations
2017
£
(1,392,966)
621,545
(678,652)
15,854
2016
£
(944,382)
(260,632)
(324,890)
4,387
(232,938)
(220,817)
(1,667,156)
(1,746,334)
46
horizonteminerals.com FINANCIAL STATEMENTS
6 Expenses by nature
Group
Charge for share options granted
Depreciation (note 11)
Operating lease charges
Profit on disposal of property, plant and equipment
7 Auditor remuneration
During the year the Group (including its overseas subsidiaries) obtained the following services from
the Company’s auditor and its associates:
Group
Fees payable to the Company’s auditor and its associates for the audit of the parent company and
consolidated financial statements
Fees payable to the Company’s auditor and its associates for other services:
– Audit related assurance services
– Tax compliance services
8 Finance income and costs
Group
Finance income:
2017
£
2016
£
678,652
324,890
283
55,421
–
1,084
36,053
–
2017
£
35,350
11,250
4,850
2016
£
32,000
5,000
2,000
2017
£
2016
£
– Interest income on cash and short-term bank deposits
15,854
4,387
Finance costs:
– Contingent consideration: unwinding of discount
Net finance costs
(232,937)
(217,083)
(220,817)
(216,430)
47
9 Income Tax
Group
Tax charge:
Current tax charge for the year
Deferred tax charge for the year
Tax on loss for the year
Reconciliation of current tax
Group
Loss before income tax
Current tax at 19.25% (2016: 22.87%)
Effects of:
Expenses not deducted for tax purposes
Utilisation of tax losses brought forward
Tax losses carried forward for which no deferred income tax asset was recognised
Total tax
No tax charge or credit arises on the loss for the year.
2017
£
2016
£
–
–
–
–
–
–
2017
£
2016
£
(1,667,156)
(1,746,334)
(320,928)
(399,387)
–
–
9,080
–
320,928
408,466
–
–
The weighted average applicable tax rate of 19.25% used is the effective standard rate of corporation tax in the UK, where all of the current
year losses originated. The corporation tax rate in Brazil is 34%. The weighted average applicable tax rate has decreased from 22.87% to
19.25% as all of the losses arose in the UK.
Deferred income tax
An analysis of deferred tax assets and liabilities is set out below.
Group
Deferred tax assets
Deferred tax liabilities
– Deferred tax liability to be settled after more than 12 months
Deferred tax liabilities (net)
The movement on the net deferred tax liabilities is as follows:
Group
At 1 January
Exchange differences
At 31 December
2017
£
2016
£
4,255,615
4,744,885
(4,508,820)
(5,027,335)
(253,205)
(282,450)
2017
£
2016
£
(282,450)
(193,665)
29,245
(88,785)
(253,205)
(282,450)
Deferred tax assets are recognised on tax losses carried forward to the extent that the realisation of the related tax benefit through future
taxable profits is probable. Deferred tax liabilities are recognised in respect of fair value adjustments to the carrying value of intangible
assets as a result of the acquisition of such assets.
The Group has tax losses of approximately £19,707,869 (2016: £18,132,502) in Brazil and excess management charges of approximately
£3,779,062 (2016: £2,492,408) in the UK available to carry forward against future taxable profits. Deferred tax asset have been
recognised up to the amount of the deferred tax liability arising on the fair value adjustments potential deferred tax assets of £6,700,675
have not been recognised.
48
horizonteminerals.com FINANCIAL STATEMENTS
10 Intangible assets
Intangible assets comprise exploration licenses, exploration and evaluation costs and goodwill.
Exploration and evaluation costs comprise acquired and internally generated assets.
Group
Cost
At 1 January 2016
Additions
Goodwill
£
Exploration
Licenses
£
Exploration and
evaluation costs
£
Total
£
192,028
3,174,275
16,985,052
20,351,355
–
1,012,620
1,253,212
2,265,831
Exchange rate movements
88,032
1,458,290
7,854,288
9,400,610
Net book amount at 31 December 2016
280,060
5,645,185
26,092,551
32,017,796
Additions
Exchange rate movements
–
–
5,740,740
5,740,740
28,997
(479,656)
(2,941,605)
(3,450,258)
Net book amount at 31 December 2017
251,063
5,165,529
28,891,686
34,308,278
(a) Exploration and evaluation assets
No indicators of impairment were identified during the year.
In October 2016, a Canadian NI 43-101 compliant Pre-Feasibility Study (‘PFS’) was published by
the Company regarding the enlarged Araguaia Project which included the areas recently acquired
from Glencore Xstrata. The financial results and conclusions of the PFS clearly indicate the economic
viability of the Araguaia Project. Nothing material had changed with the economics of the PFS as at
the end of 2017 and the Directors undertook an assessment of impairment through evaluating the
results of the PFS along with recent market information relating to capital markets and nickel prices
and judged that no impairment was required with regards to the Araguaia Project.
(b) Goodwill
Goodwill arose on the acquisition of Lontra Empreendimentos e Participações Ltda in 2010.
The Directors have determined the recoverable amount of goodwill based on the same assumptions
used for the assessment of the Lontra exploration project detailed above. As a result of this
assessment, the Directors have concluded that no impairment charge is necessary against the
carrying value of goodwill.
Impairment reviews for exploration and evaluation assets are carried out either on a project by project
basis or by geographical area.
The adjacent Araguaia/Lontra/Vila Oito and Floresta exploration sites (‘the Araguaia Project’), together
with the Vale dos Sonhos deposit acquired from Xstrata Brasil Mineração Ltda comprise a resource
of a sufficient size and scale to allow the Company to create a significant single nickel project. For
this reason, at the current stage of development, these two projects are viewed and assessed for
impairment by management as a single cash generating unit.
The mineral concession for the Vale dos Sonhos deposit was acquired from Xstrata Brasil Mineração
Ltda, a subsidiary of Glencore Canada Corporation, in November 2015.
The recoverable amount has been determined by reference to the PFS undertaken during the year on
the Araguaia Project. The key inputs and assumptions in deriving the value in use were, the discount
rate of 8%, Nickel price of US$12,000/t and a life of mine of 28 years.
Sensitivity to changes in assumptions
For the base case NPV8 of the Araguaia Project of US$581 million using a nickel price of US$14,000/t
and US$328 million using US$12,000/t as per the PFS to be reduced to the book value of the
Araguaia Project as at 31 December 2017, the discount rate applied to the cash flow model would
need to be increased from 8% to 21%.
49
11 Property, plant and equipment
Group
Cost
At 1 January 2016
Foreign exchange movements
At 31 December 2016
Foreign exchange movements
Additions
At 31 December 2017
Accumulated depreciation
At 1 January 2016
Charge for the year
Foreign exchange movements
At 31 December 2016
Charge for the year
Foreign exchange movements
At 31 December 2017
Net book amount as at 31 December 2017
Net book amount as at 31 December 2016
Net book amount as at 1 January 2016
Vehicles and other
field equipment
£
Office
equipment
£
74,647
31,657
106,304
(10,630)
2,236
97,910
65,639
11,766
28,320
105,725
358
(10,224)
95,859
2,051
579
9,008
12,596
1,802
14,398
(796)
–
13,602
9,716
2,614
1,785
14,115
283
(796)
13,602
–
283
2,880
Total
£
87,243
33,459
120,702
(11,426)
2,236
111,512
75,355
14,380
30,105
119,840
641
(11,020)
109,461
2,051
862
11,888
Depreciation charges of £358 (2016: £13,296 ) have been capitalised and included within intangible
exploration and evaluation asset additions for the year. The remaining depreciation expense for the
year ended 31 December 2017 of £283 (2016: £1,084 ) has been charged in ‘administrative expenses’
under ‘Depreciation.’
50
horizonteminerals.com FINANCIAL STATEMENTS
Field
equipment
£
Office
equipment
£
4,208
–
4,208
4,208
–
4,208
–
4,208
–
–
–
7,403
–
7,403
6,149
971
7,120
283
7,403
–
283
1,254
Total
£
11,611
–
11,611
10,357
971
11,328
283
11,611
–
283
1,254
Group
2017
£
2016
£
Company
2017
£
2016
£
7,903,861
9,250,281
7,738,863
9,094,308
1,499,964
67,500
1,499,964
49,685
9,403,825
9,317,781
9,238,827
9,143,993
Company
Cost
At 1 January 2016
Additions
At 31 December 2016 and 2017
Accumulated depreciation
At 1 January 2016
Charge for the year
At 31 December 2016
Charge for the year
At 31 December 2017
Net book amount as at 31 December 2017
Net book amount as at 31 December 2016
Net book amount as at 1 January 2016
12 Cash and cash equivalents
Cash at bank and on hand
Short-term deposits
The Group’s cash at bank and short-term deposits are held with institutions with the following credit ratings (Fitch):
A
BBB-
Group
2017
£
2016
£
Company
2017
£
2016
£
9,267,418
9,217,380
9,188,864
9,094,308
136,407
100,401
49,963
49,685
9,403,825
9,317,781
9,238,827
9,143,993
51
13 Share capital
Group and Company
Issued and fully paid
Ordinary shares of 1p each
At 1 January
Issue of ordinary shares
At 31 December
2017
Number
2017
£
2016
Number
2016
£
1,171,934,300
11,719,343
671,204,378
6,712,044
200,000,000
2,000,000
500,729,922
5,007,299
1,371,934,300
13,719,343
1,171,934,300
11,719,343
Share capital comprises amount subscribed for shares at the nominal value.
2017
On 22 December 2017, a total of 200,000,000 shares were issued through a private placement at a
price of £0.035 per share to raise £7,000,000 before expenses.
2016
On 8 August 2016, a total of 50,729,922 new ordinary shares were issued at the prevailing market
price of £0.0199 per share in consideration for the purchase of the Vale dos Sonhos mineral
concession from Xstrata Brasil Mineração Ltda.
On 30 November 2016, a total of 374,000,000 shares were issued through a private placement at a
price of £0.02 per share to raise £7,480,000 before expenses.
On 2 December 2016, a total of 76,000,000 shares were issued through a private placement at a price
of £0.02 per share to raise £1,520,000 before expenses.
14 Share premium
Group and Company
At 1 January
Premium arising on issue of ordinary shares
Issue costs
At 31 December
Share premium comprises the amount subscribed for share capital in excess of nominal value.
2017
£
2016
£
35,767,344
31,252,708
5,000,000
5,005,662
(345,086)
(490,685)
40,422,258
35,767,344
52
horizonteminerals.com FINANCIAL STATEMENTS
15 Share-based payments
The Directors have discretion to grant options to the Group employees to subscribe for Ordinary
shares up to a maximum of 10% of the Company’s issued share capital. One third of options are
exercisable at each six months anniversary from the date of grant, such that all options are exercisable
18 months after the date of grant and all lapse on the tenth anniversary of the date of grant or the
holder ceasing to be an employee of the Group. Should holders cease employment then the options
remain valid for a period of 3 months after cessation of employment, following which they will lapse.
Neither the Company nor the Group has any legal or constructive obligation to settle or repurchase the
options in cash.
Movements on number of share options and their related exercise price are as follows:
Outstanding at 1 January
Forfeited
Granted
Outstanding at 31 December
Exercisable at 31 December
Number of
options 2017
£
Weighted average
exercise price 2017
£
Number of
options 2016
£
Weighted average
exercise price 2016
£
55,310,000
(1,660,000)
41,000,000
94,650,000
62,483,333
0.079
0.065
0.03
0.059
0.072
48,760,000
(8,450,000)
15,000,000
55,310,000
36,760,000
0.124
0.092
0.030
0.079
0.102
The options outstanding at 31 December 2017 had a weighted average remaining contractual life of 7.56 years (2016: 7.28 years).
The fair value of the share options was determined using the Black-Scholes valuation model.
The parameters used are detailed below.
Group and Company
Date of grant or reissue
Weighted average share price
Weighted average exercise price
Weighted average fair value at the measurement date
Expiry date
Options granted
Volatility
Dividend yield
Option life
Annual risk free interest rate
2017
Options
2016
Options
31/03/2017
01/09/2016
3.07 pence
2.03 pence
3.20 pence
3.00 pence
2.02 pence
1.36 pence
31/3/2027
31/08/2026
41,000,000
15,000,000
68%
Nil
64%
Nil
10 years
10 years
1.19%
2.83%
The expected volatility is based on historical volatility for the six months prior to the date of grant. The risk free rate of return is based on
zero yield government bonds for a term consistent with the option life.
The range of option exercise prices is as follows:
2017
Weighted
average
exercise price
(£)
2017
Weighted
average
remaining life
expected
(years)
2017
Weighted
average
remaining life
contracted
(years)
2016
Weighted
average
exercise price
(£)
2017
Number of
shares
2016
Weighted
average
remaining life
expected
(years)
2016
Weighted
average
remaining life
contracted
(years)
2016
Number of
shares
0.04
79,500,000
0.16
15,150,000
8.32
3.55
8.32
3.55
0.049
39,850,000
0.154
15,460,000
8.34
4.57
8.34
4.57
Range of exercise prices (£)
0–0.1
0.1–0.2
53
16 Other reserves
Group
At 1 January 2016
Other comprehensive income
Currency translation differences
At 31 December 2016
Other comprehensive income
Currency translation differences
At 31 December 2017
Company
At 1 January 2016 and 31 December 2016
At 1 January 2017 and 31 December 2017
Merger reserve
£
Translation reserve
£
Other reserve
£
Total
£
10,888,760
(14,688,776)
(1,048,100)
(4,848,116)
–
–
–
9,315,180
–
–
–
9,315,180
10,888,760
(5,373,596)
(1,048,100)
4,467,064
–
–
–
(3,479,049)
–
–
–
(3,479,049)
10,888,760
(8,852,645)
(1,048,100)
998,015
Merger reserve
£
Total
£
10,888,760
10,888,760
10,888,760
10,888,760
The merger and other reserve as at 31 December 2017 arose on consolidation as a result of merger
accounting for the acquisition of the entire issued share capital of Horizonte Exploration Limited during
2006 and represents the difference between the value of the share capital and premium issued for
the acquisition and that of the acquired share capital and premium of Horizonte Exploration Limited.
Currency translation differences relate to the translation of Group entities that have a functional
currency different from the presentation currency (refer note 2.8). Movements in the translation
reserve are linked to the changes in the value of the Brazilian Real against the Pound Sterling: the
intangible assets of the Group are located in Brazil, and their functional currency is the Brazilian Real,
which decreased in value against Sterling during the year.
The available for sale reserve represents changes in the fair value of assets that are held available
for sale.
17 Trade and other payables
Non-current
Contingent consideration payable to former
owners of Teck Cominco Brasil S.A.
Contingent consideration payable to Xstrata Brasil
Mineração Ltda (refer note 26)
Total contingent consideration
Current
Trade and other payables
Amounts due to related parties (refer note 20)
Social security and other taxes
Accrued expenses
Group
2017
£
2016
£
Company
2017
£
2016
£
–
115,100
–
115,100
3,635,955
3,527,942
3,635,955
3,527,942
3,635,955
3,643,042
3,635,955
3,643,042
271,967
229,046
–
–
15,804
448,513
736,284
19,088
143,852
391,986
99,486
413,930
15,804
284,021
813,241
148,985
413,930
19,088
165,052
747,055
Total trade and other payables
4,372,239
4,035,028
4,449,196
4,390,097
Trade and other payables include amounts due of £222,925 (2016: £65,053) in relation to exploration and evaluation activities.
54
horizonteminerals.com FINANCIAL STATEMENTS
Contingent Consideration payable to the former owners of Teck Cominco Brasil S.A.
The fair value of the contingent consideration arrangement with the former owners of Teck Cominco
Brasil S.A. was estimated at the acquisition date according to the probability and timing of when
future taxable profits will arise against which the tax losses may be utilised in accordance with the
terms of the acquisition agreement.
The estimate of fair value has been restated and is now assessed to be £nil (2016 £115,100). The
critical assumptions underlying the fair value estimate are set out in note 4.3. Estimates were also
based on the current rates of tax on profits in Brazil of 34% and a discount factor of 7.0% was applied
to the future dates at which the tax losses will be utilised and consideration paid.
Contingent Consideration payable to Xstrata Brasil Mineração Ltda
On 28 September 2015 the Company announced that it had reached agreement to indirectly acquire
through wholly owned subsidiaries in Brazil the advanced high-grade Glencore Araguaia nickel project
(‘GAP’) in north central Brazil. GAP is located in the vicinity of the Company’s Araguaia Project.
Pursuant to a conditional asset purchase agreement (‘Asset Purchase Agreement’) between, amongst
others, the Company and Xstrata Brasil Exploraçâo Mineral Ltda (‘Xstrata’), a wholly-owned subsidiary
of Glencore Canada Corporation (‘Glencore’), the Company has agreed to pay a total consideration of
US$8 million to Xstrata, which holds the title to GAP. The consideration is to be paid according the
following schedule;
• US$2,000,000 in ordinary shares in the capital of the Company which as at 31 December 2017
had been settled by way of issuing new shares in the Company.
• US$1,000,000 after the date of issuance of a joint Feasibility Study for the combined Araguaia
& GAP project areas, to be satisfied in HZM Shares (at the 5 day volume weighted average
price taken on the tenth business day after the date of such issuance) or cash, at the election of
the Company; and
• The remaining US$5,000,000 consideration will be paid in cash, as at the date of first commercial
production from any of the resource areas within the Enlarged Project area. Following transfer
of the concession for the VdS deposit area to a subsidiary of the Company, this has been included
in contingent consideration payable.
As at 31 December 2017, there was a finance expense of £222,836 (2016: £193,868 ) recognised
in finance costs within the Statement of Comprehensive Income in respect of the contingent
consideration arrangement, as the discount applied to the contingent consideration at the date of
acquisition was unwound.
18 Dividends
No dividend has been declared or paid by the Company during the year ended 31 December 2017
(2016: nil).
19 Earnings per share
(a) Basic
The basic loss per share of 0.142p loss per share (2016 loss per share: 0.240p) is calculated by
dividing the loss attributable to owners of the parent by the weighted average number of ordinary
shares in issue during the year.
Group
Loss attributable to owners of the parent
Weighted average number of ordinary shares in issue
2017
£
2016
£
(1,667,156)
(1,746,334)
1,177,413,752
727,096,642
(b) Diluted
The basic and diluted loss per share for the years ended 31 December 2017 and 31 December 2016
are the same as the effect of the exercise of share options would be anti-dilutive.
In January 2018 the Group issued a further 60,587,500 new ordinary shares raising gross cash
proceeds of £2.2 million, had this occurred prior to the end of the year this would have impacted the
basic and diluted earnings per share figures. Details of share options that could potentially dilute
earnings per share in future periods are set out in note 15.
55
20 Related party transactions
The following transactions took place with subsidiaries in the year:
A fee totaling £350,652 (2016: £312,043) was charged to HM do Brazil Ltda, £980,108 (2016:
£872,784) to Araguaia Niquel Mineração Ltda and £55,894 (2016:£58,806) to Typhon Brasil
Mineração Ltda by Horizonte Minerals Plc in respect of consultancy services provided and
funding costs.
Amounts totaling £2,243,832 (2016: £782,926) were lent to HM Brazil (IOM) Ltd, HM do Brasil Ltda,
Araguaia Niquel Mineraçao Ltda and Typhon Brasil Mineração Ltda to finance exploration work during
2017, by Horizonte Minerals Plc. Interest is charged at an annual rate of 6% on balances outstanding
during the year. The amounts are repayable on demand.
Balances with subsidiaries at the year end were:
Company
HM do Brasil Ltda
HM Brazil (IOM) Ltd
Horizonte Nickel (IOM) Ltd
Araguaia Niquel Mineração Ltda
Horizonte Minerals (IOM) Ltd
Horizonte Exploration Ltd
Typhon Brasil Mineração Ltda
Trias Brasil Mineração Ltda
Total
All Group transactions were eliminated on consolidation.
21 Ultimate controlling party
The Directors believe there to be no ultimate controlling party.
2017
Assets
£
1,263,644
5,405,662
31,021,684
6,594,120
253,004
2017
Liabilities
£
–
–
–
–
–
2016
Assets
£
792,301
4,933,377
26,070,923
6,074,517
253,004
2016
Liabilities
£
–
–
–
–
–
–
413,930
–
413,930
3,224,179
1,012,620
–
–
3,198,183
–
–
–
48,890,013
413,930
41,322,305
413,930
56
horizonteminerals.com FINANCIAL STATEMENTS
22 Directors’ remuneration (including Key Management)
Short term
benefits
Post
employment
benefits
Aggregate
emoluments
£
Other
emoluments
£
Pension
costs
£
–
31,200
26,400
26,400
–
–
–
–
–
–
–
–
–
–
29,332
Cost to
Company
Social Security
costs
£
Non-Cash
Share Based
Payment
Charge
£
Grand Total
£
–
3,203
–
3,163
–
–
–
90,395
75,919
75,919
75,919
124,798
102,319
105,482
105,251
Total
£
–
31,200
26,400
26,400
29,332
190,400
68,876
–
259,276
34,055
119,293
412,624
39,997
54,250
314,397
123,126
23,999
53,331
118,246
490,854
5,290
45,711
43,428
166,964
480,873
1,017,438
Group 2017
Non-Executive Directors
Alexander Christopher
David Hall
William Fisher
Allan Walker
Owen Bavinton
Executive Directors
Jeremy Martin
Key Management
Simon Retter
There are no other long term or termination benefits granted to key management.
Group 2016
Non-Executive Directors
Alexander Christopher
David Hall
William Fisher
Allan Walker
Owen Bavinton
Executive Directors
Jeremy Martin
Key Management
Jeffrey Karoly
Simon Retter
Aggregate
emoluments
£
Other
emoluments
£
Pension
costs
£
Social Security
costs
£
Total
£
Share Based
Payment
Charge
£
Grand Total
£
–
29,000
29,000
29,000
–
–
–
–
–
–
–
–
–
–
32,167
–
29,000
29,000
29,000
32,167
–
3,312
–
4,002
–
–
–
24,520
24,520
24,520
24,520
56,832
53.520
57,522
56,687
170,000
59,236
17,000
246,236
31,326
67,430
344,992
128,000
39,997
400,541
9,600
54,250
76,836
15,553
153,153
–
23,541
64,720
542,097
13,524
2,154
54,309
61,300
–
227,977
25,695
226,810
823,216
The Company does not operate a pension scheme. Pension costs comprise contributions to Defined
Contribution pension plans held by the relevant Director or Key Management.
57
23 Employee benefit expense (including Directors and Key Management)
Group
Wages and salaries
Social security costs
Indemnity for loss of office
Group
2017
£
1,144,253
216,242
49,817
2016
£
809,954
134,096
50,519
Company
2017
£
588,498
63,979
–
2016
£
627,155
49,463
30,000
Share options granted to Directors and employees (note 15)
678,652
324,890
678,652
324,890
Management
Field staff
Average number of employees including Directors and Key Management
2,088,964
1,319,459
1,331,129
1,031,508
10
15
25
6
12
18
6
–
6
6
–
6
Employee benefit expenses includes £1,062,396 (2016: £393,712) of costs capitalised and included
within intangible non-current assets.
Share options granted include costs of £437,445 (2016: £165,510) relating to Directors.
24 Investment in subsidiaries
Company
Shares in Group undertakings
Loans to Group undertakings
2017
£
2016
£
2,348,042
2,348,042
48,890,013
41,332,305
51,238,055
43,670,347
Investments in Group undertakings are stated at cost. The loans to Group undertakings are repayable on demand and currently carry
interest at 6%, however there is currently no expectation of repayment within the next twelve months and therefore loans are treated as
non-current.
On 23 March 2006 the Company acquired the entire issued share capital of Horizonte Exploration Limited by means of a share for share
exchange; the consideration for the acquisition was 21,841,000 ordinary shares of 1 penny each, issued at a premium of 9 pence per
share. The difference between the total consideration and the assets acquired has been credited to other reserves.
58
horizonteminerals.com FINANCIAL STATEMENTS
25 Commitments
Operating lease commitments
The Group leases office premises under cancellable and non-cancellable operating lease agreements.
The cancellable lease terms are up to one year and are renewable at the end of the lease period at
market rate. The leases can be cancelled by payment of up to one month’s rental as a cancellation fee.
The lease payments charged to profit or loss during the year are disclosed in note 6.
The future aggregate minimum lease payments under non-cancellable operating leases are
as follows:
2017
£
54,444
–
–
2016
£
11,996
–
–
54,444
11,996
2017
£
–
2016
£
–
Group
No later than one year
Between 1 – 5 years
Greater than 5 years
Total
Capital Commitments
Capital expenditure contracted for at the end of the reporting period but not yet incurred is as follows:
Group
Intangible assets
Capital commitments relate to contractual commitments for metallurgical, economic and
environmental evaluations by third parties. Once incurred these costs will be capitalised as intangible
exploration asset additions.
26 Contingent Liabilities
(a) Glencore Araguaia Project
The SdT deposit area concessions are subject to on-going litigation with a Brazilian third party.
Glencore has disputed these claims. The parties have agreed certain protections including the receipt
by HZM from Glencore of certain indemnities in respect of such litigation.
The Asset Purchase Agreement contains customary warranties regarding the GAP project and the
parties’ ability to enter into the Proposed Transaction and is subject to customary termination rights
and confidentiality obligations.
(b) Other Contingencies
The Group has received a claim from various trade union organisations in Brazil regarding outstanding
membership fees due in relation to various subsidiaries within the Group. Some of these claims relate
to periods prior to the acquisition of the relevant subsidiary and would be covered by warranties
granted by the previous owners at the date of sale. The Directors are confident that no amounts
are due in relation to these proposed membership fees and that the claims will be unsuccessful. No
subsequent actions, claims or communications from the various trade union organisations have been
received subsequent to the requests for payment. As a result, no provision has been made in the
Financial Statements for the year ended 31 December 2017 for amounts claimed. Should the claim be
successful, the maximum amount payable in relation to fees not subject to the warranty agreement
would be approximately £64,000.
59
In 2013 the Group received an infraction notice from the Brazilian Environmental Agency’s (‘IBAMA’)
district office in Conceição do Araguaia in connection with carrying out drilling activities in 2011
without the relevant permits. Drilling equipment was furthermore impounded. The Group strongly
believes that it operated with all necessary permits and has initiated legal proceedings to overturn
the infraction notice. The Group has secured cancellation of the injunction and has appealed the
associated fine and infraction notices of approximately £68,000 which has not been recognised in
these financial statements.
In December 2014, the Group received a writ from the State Attorney in Conceiçao do Araguaia
regarding alleged environmental damages caused by drilling activities in 2011. To ensure proper
environmental stewardship, the Group conducts certified baseline studies prior to all drill programmes
and ensures that areas explored are properly maintained and conserved in accordance with local
environmental legislation. After drilling has occurred, drill sites and access routes are rehabilitated to
equal or better conditions and evidence is retained to demonstrate that such rehabilitation work has
been completed. In January 2015 the Group filed a robust defence against the writ. A court hearing
was held in May 2015 at which documents were requested to confirm that valid environmental
authorisations were in place. These were subsequently submitted as requested. No substantive
financial claim continues to be made against the Group under the terms of the writ. The Group
continues to believe that the writ is flawed and is working towards having it withdrawn in due
course. As a result no provision has been made in the Financial Statements for the year ended
31 December 2017.
27 Events after the reporting date
On 11 January 2018, the Company issued 60,587,500 new ordinary shares at a price of CAD$0.06
raising gross cash proceeds of $3,635,250 (£2,163,839).
Agreement to acquire the Vermelho project
On 19 December 2017 the Company announced that it had reached agreement with Vale S.A (“Vale”)
to indirectly acquire through wholly owned subsidiaries in Brazil, 100% of the advanced Vermelho
nickel-cobalt project in Brazil (“Vermelho”).
The terms of the Acquisition require Horizonte to pay an initial cash payment of US$150,000 with
a further US$1,850,000 in cash payable on the second anniversary of the signing of the asset
purchase agreement.
A final payment of US$6,000,000 in cash is payable by Horizonte within 30 days of first commercial
sale of product from Vermelho.
In addition to the purchase price, the Company has granted a 1% Net Smelter Royalty (“NSR”) to Vale
on any nickel produced during the first 10 years of commercial production up to a maximum of 15,000
t/a, which then reduces to a 0.5% NSR thereafter.
As part of the acquisition of the Vermelho project, the Company will acquire Vale’s rights under a
mining licence application in respect of the project comprising an area covering 2,000 hectares.
Further development of the Vermelho project will be subject, amongst other things, to the Company
being granted the required mining licence and other customary licences and permits.
As at the date of this report the transfer of legal title had been completed and the agreement is
therefore unconditional.
60
horizonteminerals.com
Statutory Information
Directors
David John Hall (Non-Executive Chairman)
Jeremy John Martin (Chief Executive Officer)
William James Fisher (Non-Executive Director)
Allan Michael Walker (Non-Executive Director)
Alex Christopher (Non-Executive Director)
Owen Alexander Bavinton (Non-Executive Director)
Company Secretary
Simon James Retter
Registered Office
Horizonte Minerals Plc
Rex House, 4-12 Regents Street,
London, SW1Y 4RG
United Kingdom
Nominated Adviser and Broker
finnCap Ltd
60 New Broad Street
London
EC2M 1JJ
United Kingdom
Corporate Broker
Numis Securities Ltd
The London Stock Exchange Building
10 Paternoster Square
London
EC4M 7LT
Independent Auditor
BDO LLP
55 Baker Street
Marylebone
London
W1U 7EU
United Kingdom
FINANCIAL STATEMENTS
Solicitors to the Company
As to English law:
Greenberg Traurig Maher LLP
200 Gray’s Inn Road
London
WC1X 8HF
United Kingdom
As to Canadian law:
Cassels Brock and Blackwell LLP
2100 Scotia Plaza
Toronto ON
M5H 3C2
Canada
As to Brazilian law:
Freitas Ferraz Advogados
Belo Horizonte – MG
Rua Paraiba, no 550, 9 ander, Bairro Savassi
CEP 30.130.-141 Brazil
Registrar
For shares listed on the London Stock Exchange:
Computershare Investor Services (Ireland) Limited
Heron House
Corrig Road
Sandyford Industrial Estate
Dublin 18
Ireland
For shares listed on the Toronto Stock Exchange:
Computershare Investor Services Inc.
100 University Avenue
8th Floor
Toronto ON
M5J 2Y1
Canada
61
Horizonte Minerals Plc
Rex House, 4-12 Regents Street
London SW1Y 4RG
United Kingdom
T + 44 (0) 203 356 2901
E info@horizonteminerals.com
www.horizonteminerals.com