VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jul
25, 2017) - DuSolo Fertilizers Inc. (TSX
VENTURE:DSF) ("DuSolo" or "the Company") is very pleased to
announce that it has received final approval of its new Guia de
Utilização ("GUIA") issued by the National
Department for Mineral Production ("DNPM"),
and has re-started extraction of phosphate rock from its Direct
Application Natural Fertilizer ("DANF")
Santiago Project in Tocantins State, Brazil ("Santiago Project"). The Company has also received
approval of its Final Exploration Report for the Santiago Project,
allowing it to complete its application for various permanent
production licences.
The new GUIA has the following terms:
- Permission to extract up to 200,000 tonnes of
phosphate mineralization by 30 May, 2018 (previously 100,000 tonnes
per annum ("tpa")).
- Final Exploration Report approved - paving the
way for the Company to complete the application for its permanent
mining and environmental licences.
- GUIA application can be renewed annually until
the permanent licences are received.
The new GUIA allows the Company to continue
extraction of phosphate mineralization from the Santiago Project
throughout 2017 and into 2018. The Company expects to mine between
50,000 to 60,000 tonnes from Santiago by October 2017, which will
also provide stockpiles for deliveries in the first half of 2018.
Please note the disclosure included under "Forward Looking
Statements" below regarding the Company's decision to operate the
Santiago Project.
Sales Update
The seasonality of the crop cycles in Brazil is
such that the Company expects to deliver 70-80% of its annual sales
during the period July to December each year and this new GUIA
means that mining / production activities and customer deliveries
can now be more closely matched, reducing working capital
requirements.
As at the end of June, 2017, the Company has
delivered approximately 13,500 tonnes of DANF against a budget of
12,300 tonnes. The Company has commitments to deliver an additional
24,000 tonnes of DANF by December 2017 and is currently negotiating
contracts to deliver another 18,000 tonnes during the second half
of 2017. The Company is well on the way to
meeting its 60,000t DANF production and sales target for 2017.
Further information regarding sales will be provided in the next
Management Discussion & Analysis.
The new GUIA allows the Company to continue its
business plan to produce and sell DANF to existing customers as
detailed in the Preliminary Economic Assessment ("DANF PEA")
released March 23, 2017 (see highlights below); to expand its
market share and to produce more than 100,000 tonnes of DANF in
2018. In parallel, the development of new products is being
assessed to add value through increased pricing and the opening up
of new markets in crop segments such as soya bean.
Giles Baynham, CEO of DuSolo, noted "We are very pleased to receive the GUIA, as it allows the
Company to continue adding value for our stakeholders. Combined
with the positive DANF PEA results earlier this year, we can now
continue to expand our market and lift production beyond our 2018
target of 100,000 tonnes of DANF. At the same time we will now push
forward with the permanent licence applications. In 2017 we have
continued producing and selling our DANF products; completed the
restructuring of the Company's operations with a strong focus on
cost reduction; whilst developing higher value products."
DANF PEA Highlights
On March 23, 2017, the Company released the
results of its DANF PEA, and subsequently the NI43-101 report was
filed on SEDAR (www.sedar.com, May 8, 2017) and posted on DuSolo's
website (www.dusolo.com). Highlights of the PEA include:
- Indicated Resources of 1.16Mt at 8.23%
P2O5, including
0.29Mt at 14.78% P2O5
- Inferred Resources of 2.70Mt at 8.58%
P2O5, including
0.82Mt at 14.72% P2O5
- Life of Mine ("LOM") 12.5 years
- LOM Production of 543Kt of 12% DANF and 635Kt of
15% DANF
- Post-tax NPV (10%) of US$13.0m
- Zero Initial Capital (already operating)
- Operating Costs (Mine, Plant, G&A) of
US$18.47/t
- Upside Case NPV(10%) of US$30.3m based on
Agroconsult Consultoria e Projetos ("Agroconsult") DANF Prices
The Company's decision to produce DANF, its DANF
production targets and cash flow projections were not based on a
feasibility study of mineral reserves demonstrating economic and
technical viability. Without a technical report demonstrating
economic and technical viability, there is uncertainty as to
whether the Company will be able to economically produce DANF in
the long run and as to whether the Company will be confronted with
any unforeseen technical impediments. The Company has now completed
a PEA. Note that the DANF PEA is preliminary in nature as it
includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves. Mineral resources that are not mineral reserves do not
have demonstrated economic viability, and as such there is no
certainty that the preliminary assessment and economics will be
realized.
NEW PRODUCT DEVELOPMENT
Brazil remains a substantial agricultural market
and imports significant quantities of fertilizer including
phosphate-based products. Estimates for 2017 are a total phosphate
product market of 13.5 million tonnes, with approximately 60% being
imported(1). Domestic
phosphate production is a priority for the Brazilian government,
and phosphate is considered a 'Strategic Mineral' by DNPM because
of the Brazilian Government policies to increase domestic
production of fertilizers(2). In
addition, the Company is working with EMBRAPA, the state-owned
agricultural research organization, to enhance the DANF products
and complete agronomic tests to expand the range of crops utilizing
DANF. Assessment of new coarse grain and granulated DANF products
continues with various engineering consultants to develop the
process design, operating and capital costs for products utilizing
various additives to improve the overall physical and agronomic
characteristics of DANF. The Company continues to work with
Agroconsult, the leading Brazilian consultancy for agriculture and
fertilizers, to determine market potential, pricing and Brazilian
fertilizer market intelligence for the various product options.
(1)Agroconsult,
March 2016
(2)Brazilian
Govt. Plano Nacional de Mineração 2030
PERMITTING
The Company is now permitted to extract up to
200,000tpa of phosphate mineralization from the Santiago Project by
a GUIA issued by the DNPM, and an
Environmental Licence issued by Naturatins, the Tocatins State
Environmental Agency, and valid until August 2018. GUIA's are
issued under the terms of the exploration concessions, and are
replaced by the life of mine licence known as a Portaria de Lavra,
issued by the DNPM.
Approval of the Final Exploration Report allows
the Company to finalize its application to DNPM for its Portaria de
Lavra, based on the DANF Preliminary Economic Assessment published
in March 2017. In a parallel process, the Company will apply for
its permanent Environmental Licence from Naturatins. The Company
and its consultants meet regularly with both DNPM and Naturatins
and do not anticipate any issues in obtaining the permanent
licences for the Santiago DANF operation.
As with any such permitting process it is subject
to interaction with State and Federal authorities and there can be
no guarantee that the Company will be able to acquire such
licences.
QUALIFIED PERSONS
The technical content of this news release has
been reviewed and approved by Mr. Porfirio Cabaleiro Rodriguez and
Mr. Bernardo Horta de Cerqueira Viana, both Managing Partners of
GE21 Consultoria Mineral, in compliance with the standards of
disclosure as set out in NI43-101. Mr. Rodriguez and Mr. Viana are
"independent qualified persons" for the purposes of NI43-101
Standards of Disclosure for Mineral Projects of the Canadian
Securities Administrators.
On behalf of DuSolo Fertilizers
Inc.
Giles Baynham, Chief Executive
Officer and Director
FORWARD LOOKING
STATEMENTS
Certain information contained in
this press release constitutes "forward-looking information",
within the meaning of Canadian legislation. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or statements
that certain actions, events or results "may", "could", "would",
"might" or "will be taken", "occur", "be achieved" or "has the
potential to". Forward looking statements contained in this press
release may include statements regarding the future operating or
financial performance of DuSolo which involve known and unknown
risks and uncertainties which may not prove to be accurate. Actual
results and outcomes may differ materially from what is expressed
or forecasted in these forward-looking statements. Such statements
are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Among those factors
which could cause actual results to differ materially are the
following: market conditions and other risk factors listed from
time to time in our reports filed with Canadian securities
regulators on SEDAR at www.sedar.com. The
forward-looking statements included in this press release are made
as of the date of this press release and DuSolo disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as expressly required by applicable securities
legislation.
For more information please refer
to the technical reports filed on SEDAR and titled "Bomfim
Agro-Mineral Phosphate Project, Technical Report and Initial
Resource Estimate Tocabtins and Goiás States, Brazil," filed on
March 5, 2014, effective December 31, 2013, and amended on February
6, 2015, and the "DANF Santiago Project, Tocantins, Brazil,
Independent Technical Report - Preliminary Economic Assessment",
effective date September 1, 2016, and filed on May 8, 2017. The
resource estimate was signed off by Mr. Porfirio Cabaleiro
Rodriguez an Associate Consultant of Coffey Consultoria e Serviços
Ltda., and was prepared in compliance with the standards of
disclosure as set out in NI43-101. The PEA was prepared in
compliance with the standards of disclosure as set out in NI43-101
and was signed off by Mr. Porfirio Cabaleiro Rodriguez - BSc (Min
Eng), MAIG Mário Conrado Reinhardt - BSc (Geology), MAIG Bernardo
Cerqueira Viana - BSc (Geology), and MBA, MAIG Fábio Valério Xavier
- BSc (Geology), MAIG of GE21 Consultoria Mineral Ltda. Mr.
Rodriguez, Mr. Reinhardt, Mr. Viana and Mr. Xavier are each an
"independent qualified person" for the purposes of NI43-101
Standards of Disclosure for Mineral Projects of the Canadian
Securities Administrators.
Disclosure - The Company's
decision to produce DANF, its DANF production targets and cash flow
projections were not based on a feasibility study of mineral
reserves demonstrating economic and technical viability. Without a
technical report demonstrating economic and technical viability,
there is uncertainty as to whether the Company will be able to
economically produce DANF in the long run and as to whether the
Company will be confronted with any unforeseen technical
impediments. The Company has now completed a preliminary economic
assessment.
Disclosure - Note that the DANF
PEA is preliminary in nature as it includes inferred mineral
resources that are considered too speculative geologically to have
the economic considerations applied to them that would enable them
to be categorized as mineral reserves. Mineral resources that are
not mineral reserves do not have demonstrated economic viability,
and as such there is no certainty that the preliminary assessment
and economics will be realized.
Neither the TSX
Venture Exchange Inc. nor its Regulation Service Provider (as that
term is defined in the policies of the TSX Venture Exchange Inc.)
accepts responsibility for the adequacy or accuracy of this press
release.
Contact Information
DuSolo Fertilizers Inc.
ir@dusolo.com
+1 (604) 764 6126
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: DuSolo Fertilizers via Globenewswire
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