Horizonte Minerals PLC on Tuesday said it will scale back construction activities at its Araguaia nickel asset in Brazil to manage its resources and funds.

Shares in Horizonte Minerals plunged 44% to 10.40 pence each in London on Tuesday morning.

The London-based nickel development company said it will be advancing only critical workstreams, as it attempts to save cash as it tries to secure more funding.

The Araguaia project had total liquidity sources of $169 million at November 10, which it explained ‘should provide sufficient working capital to around mid-December 2023 unless there are positive outcomes from conversations with suppliers, other cash preserving measures, or other financing solutions’.

It added that financing discussions with shareholders and lenders continue.

Chief Executive Officer Jeremy Martin said: ‘While work on the funding solution continues, we have elected to focus capital and human resources on the critical work packages. This work is planned is to ensure that we are well-positioned to resume full construction activities post receipt of the funding to benefit stakeholders and our community alike.’

First production at the asset will be contingent on the result of its various funding discussions, the firm added.

Last month, Horizonte had said that a number of factors had led to increased costs around the main electromechanical erection contract and increased duration on the delivery schedule.

These changes required additional financing, which resulted in an expected increase in the overall project capital requirement by at least 35% from the current capital expenditure budget of $537 million. At that time, said it was delaying its first production to the third quarter of 2024.

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