Glencore's share price falls below 90p after it sells off nickel project at cut-price $8m

 
Caitlin Morrison
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Horizonte Media said the purchase was a “game-changing transaction”
Troubled mining and trading firm Glencore's share price plummeted to a fresh low this morning, after agreeing to sell its Araguaia nickel project (GAP) to Aim-listed Horizonte Minerals for a discount price of $8m (£5.3m).
Shares in Glencore fell more than 16 per cent in early trading, while Horizonte Minerals' share price climbed 5.6 per cent.
The deal between the two companies will create one of the world’s largest nickel projects by combining GAP with Horizonte’s own Araguaia project. Horizonte boss Jeremy Martin said the purchase was a “game-changing transaction” for his firm, and noted that Glencore and previous owners have spent $78m to date to carry out “considerable work” on GAP.
“We have been able to negotiate a unique transaction leveraging the current depressed commodity markets,” said Martin.
The junior market miner also announced today that it has raised £1.55m through its key cornerstone shareholders, which it described as “a strong endorsement for the transaction, the team and the new enlarged project”. The company now has cash balances of over £3m.
Glencore has been the worst performer on the FTSE 100 index this year, with its share price plunging from above 300p in May to under 100p last week. The group has struggled to make money as commodity prices have fallen, with copper and coal, two of its key products, both hitting six-year lows in recent months.
Earlier this month, the company unveiled plans to slash its debt by $10bn, including a $2.5bn capital raising. Glencore also said it planned to make $2bn from asset sales.
The firm declined to comment yesterday.

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