UPDATE 1-Horizonte buys Brazil nickel project, shares jump

* Buys Teck Cominco Brasil for about 7.5 mln stg

* Raises 5.1 mln stg as part of the all-share deal

* Teck to take 50 percent of the enlarged Horizonte

* Shares resume trading, jump 23 pct to two-month high

(Adds details, interview with CEO, shares)

By Julie Crust

LONDON, July 27 (Reuters) - Horizonte Minerals (HZM.L) said it bought the Araguaia nickel project in Brazil from Teck Resources, Canada's largest diversified mining group, for about 7.5 million pounds ($11.6 million) in an all share deal.

AIM-listed Horizonte raised 5.1 million pounds at a premium of 10 pence a share and said Teck (TCKb.TO) will take 50 percent of the enlarged Horizonte as part of the deal.

Shares in Horizonte jumped 23 percent to 10.75 pence at 0910 GMT. They had been suspended since July 15 after the exploration company said it was in advanced talks which could constitute a reverse takeover.

"It is a phenomenal deal," Horizonte Chief Executive Jeremy Martin told Reuters.

Horizonte plans to develop Araguaia together with its partially owned Lontra nickel project.

It plans to buy the remaining 50 percent of Lontra it does not already own by issuing a further 10 million shares at 10 pence to Quantom Holdings, Martin said.

It is targeting a 100 million tonne resource for the combined Araguaia project at a grade 1.3 percent.

The project is located in northern Brazil and is close to a number of nickel laterite projects owned by majors such as Anglo American (AAL.L), Vale (VALE5.SA) and Xstrata (XTA.L)

"I am not giving you a nickel laterite project in Africa where we have got to put 200 miles of rail line in and then bring the major mining companies in," Martin said. They are there and we have the infrastructure.

"All of these nickel projects are at the upper end of the grade curve," he said.

Some of the industry's concern with laterite ores is the commercial viability of projects with low grades.

Horizonte expects to start drilling in August and aims to have the first resource estimate by late December/early January. A second resource estimate is expected to be completed in the second quarter of 2011 and a pre-feasibility study by the third quarter of next year.

The company also plans to list on the Toronto Stock Exchange in the first quarter of 2011.

Horizonte already has a strategic alliance with AngloGold Ashanti (ANGJ.J), the world's third-largest gold producer, for its gold projects in Brazil.

(Editing by James Davey)

($1=.6473 Pound)