Mr. Patrick Chambers reports

HORIZONTE MINERALS PLC ANNOUNCES CORPORATE UPDATE

Horizonte Minerals PLC provides an update of progress on the refinancing efforts of its 100-per-cent-owned Araguaia nickel project. Further to the company update on Feb. 19, 2024, in which Horizonte announced the cost to complete capital expenditures required to complete the construction of Araguaia, commission the project and deliver first metal, the company is providing a further update in relation to the refinancing amount required to fully finance the project, progress on discussions with relevant financial stakeholders and deferral of interest payments.

Full financing update

The cost-to-company estimate of $454-million (U.S.) announced on Feb. 19, 2024, is the capital required for project completion. As explained in that announcement, a higher amount would be required to fully finance the project when including ramp-up and contingencies.

Horizonte estimates the full financing required to complete construction and bring the operation to positive cash flow is $567-million (U.S.) to $592-million (U.S.). This consists of the project CTC of $454-million (U.S.), as announced on Feb. 19, 2024, plus $89-million (U.S.) of preproduction costs, ramp-up costs, general and administration, and working capital required to bring the operation to positive cash flow, and $25-million (U.S.) to $50-million (U.S.) that relates to transaction costs and a minimum cash contingency.

In addition to these costs, the company will need to reach a restructuring solution for the group's existing liabilities which as of March 15, 2024, were roughly $418-million (U.S.), comprising $241-million (U.S.) in senior debt, a $27-million (U.S.) cost over-run facility (COF), $68-million (U.S.) to trade creditors and $82-million (U.S.) of convertible loan notes, and a restructuring solution for its existing royalties arrangements. Reaching a potential restructuring solution with existing creditors may increase the full financing requirements.

The company continues to hold discussions to restructure the group's debt in conjunction with seeking a fully financed solution and is actively engaging existing and new potential investors. In connection with such discussions, the company is continuing to provide information to senior lenders, and existing and new potential investors (under confidentiality agreements), including the full financing amount. As previously announced, the company expects that it will require additional interim financing around mid-April to implement such full financing solution.

Existing shareholders should note that whilst the company continues to work closely with its major shareholders and senior creditors on a full financing solution, there can be no guarantee that a refinancing and restructuring solution will complete (including any interim funding). Even if it does, the conclusion of any such solution is unlikely to lead to a positive outcome for existing shareholders, noteholders and creditors of the company. Further, if it becomes apparent that an interim and/or a fully financed solution is unlikely to be found, the company will have to look at all potential options which could include putting the group's projects in care and maintenance, liquidation of assets, and or starting formal administration procedures in the United Kingdom in relation to the company.

By way of background and further information, the company informs that in November, 2023, Araguaia Niquel Metais Ltda (ANML), the company's Brazilian subsidiary, engaged Moelis & Company Assessoria Ltda in Brazil to act as financial adviser to ANML in connection with the restructuring of its debt and the company has also recently engaged FRP Advisory Trading Ltd. in the United Kingdom to act as adviser to the company and its board of directors in connection with restructuring options and contingency planning.

Deferral of interest payments

As announced on March 1, 2024, the existing senior lenders agreed to extend waivers including the deferral of interest originally due Dec. 31, 2023, to the March 29, 2024 (subject to certain conditions). The company is in discussions with senior lenders and has requested that they extend such waivers until the end of April, 2024. Whilst the company expects that it will reach an agreement with senior lenders on the request for extension, there can be no guarantee that senior lenders will consent to further extend the current waivers.

If no extension is agreed, deferred interest originally payable at the end of December, 2023, will become immediately due and payable on March 30, 2024, and interest payable at the end of the first quarter of 2024 will become due and payable on April 1, 2024. If these amounts remain unpaid after becoming due and payable, the senior lenders will be entitled to: (a) immediately cancel the undrawn portion of the senior debt facility; (b) declare all outstanding senior debt amounts (including interest) immediately due and payable; and/or (c) seek to enforce the senior lenders' security, which encompasses all or essentially all of the group's assets.

As announced on March 14, 2024, ANML has been granted an injunction (Brazilian Precautionary Measure) giving it a 60-day stay period against the enforcement of debt and certain security held by senior lenders and creditors, in order to negotiate and work on a restructuring plan to be approved by its creditors.

As a guarantor of ANML's debt under the senior loan facilities, if claims are made in relation to the guarantee given by the company, the company may also need to consider applying for protective measures that may be available to it, or alternatively appoint administrators for the company in the United Kingdom.

Further updates will be provided in due course.

About Horizonte Minerals PLC

Horizonte Minerals PLC (AIM:HZM) (TSX:HZM) is developing two 100-per-cent-owned, Tier 1 projects in Para state, Brazil -- the Araguaia nickel project and the Vermelho nickel-cobalt project. Both projects are high grade, low cost, with low carbon emission intensities and are scalable. Araguaia is under construction and when fully ramped up with both Line 1 and Line 2, is forecast to produce 29,000 tonnes of nickel per year. Vermelho is at feasibility study stage and is expected to supply nickel to the critical metals market. Horizonte's combined production profile of over 60,000 tonnes of nickel per year positions the company as a globally significant nickel producer. Horizonte's top three shareholders are La Mancha Investments Sarl, Glencore PLC and Orion Resource Partners LLP.

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