Horizonte Minerals, the nickel and gold company focused on Brazil, said that its target tonnage has been achieved with the release of a new resource estimate at its Araguaia nickel project.
The project now hosts an Indicated and Inferred resource of just over 100m tonnes grading 1.29% nickel.
House broker finnCap has just initiated coverage of the stock with a target price of 30.6p, and it says that around 80% of this target price is accounted for by the Araguaia project.
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"The recent weakness in the price is for the most part a reflection of the very poor market sentiment towards the mining sector, particularly the explorers. However, the company is continuing to make rapid progress at Araguaia, with risk steadily being reduced as more studies are completed," the broker claims.
Panmure Gordon, a disinterested follower of the company, has its target price under review following the resource upgrade.
The indicated resource stands at 39.3m tonnes at 1.39% nickel grade, the broker observes. "Also encouraging is the conversion of resources from inferred to indicated with 39% of the resource base falling into the indicated category. This greatly increases the level of confidence in the resource base," asserts Panmure analyst Alison Turner.
Both brokers also draw attention to the higher grade zone the company has defined, which has an indicated resource of 24.2m tonnes grading 1.6% nickel.
Panmure Gordon, which rates the shares as a "buy", believes "today's news confirms our confidence in the thesis that Araguaia represents a potentially world class nickel resource which could be of interest to global majors."
Despite all the love from the broking community, the shares fell 0.125p to 11.875p on the morning of the announcement.
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