Shares of Horizonte Minerals (TSX: HZM) plummeted by 60% on Monday as the company announced that costs for its Araguaia nickel project in Brazil will escalate by at least 35% and that first production will be delayed.
The cost and schedule changes follow detailed engineering and construction work, along with a comprehensive cost review, resulting in modifications to the design and execution scope, the company said.
In October of last year, Horizonte increased the capital expenditure for Araguaia to $537 million.
The company began building the Araguaia mine operation last May, with the aim of producing 29,000 tonnes of nickel a year mostly destined to supply the stainless steel market.
Construction includes an open pit and a processing plant, which will produce ferronickel over an estimated 28-year period.
The company initially anticipated the mine to commence operations in early 2024, but it now expects to delay the first production to Q3 2024.
Shares of Horizonte Minerals fell 60% by 12:44 p.m. EDT. The developer has a market capitalization of $241 million.