Horizonte Minerals, a UK-based mining company, has been placed into administration following its inability to secure the necessary financing for the completion of its Araguaia Nickel Project in Brazil.

The move comes after extensive discussions with secured creditors and potential investors regarding alternative restructuring solutions to optimise recovery for the company's creditors.

Horizonte’s board has announced the appointment of Geoff Rowley and Chad Griffin from FRP Advisory as administrators.

The administrators are tasked with evaluating the company's position to ensure the best possible outcome for its creditors. This move aims to preserve the value of the business for creditors and other stakeholders.

During the administration process, the joint administrators will continue discussions with subsidiary directors and key stakeholders to explore potential restructuring solutions.

These discussions are intended to protect the company's subsidiaries, which are not being placed into administration.

In response to these developments, Horizonte suspended trading of its ordinary shares on the AIM market as of 16 May 2024 and on the Toronto Stock Exchange as of 15 May 2024.

The company's Brazilian legal counsel has advised that the injunction granted to its Brazilian subsidiary, Araguaia Níquel Metais (ANML), will expire on 24 May 2024.

This injunction provides a 60-day period to negotiate and formulate a restructuring plan that requires approval from its creditors.

As a consequence of these events, Peel Hunt has stepped down as the nominated adviser and broker to Horizonte with immediate effect.

In May 2022, Horizonte commenced construction works at its Araguaia nickel project.

The first phase of the project was estimated to produce 14,500 tonnes per annum (tpa) of nickel.

However, costs for the project spiralled to $1bn (£789,39m). Last month, the company said it is weighing various options for the project, including a potential sale.