Aguia (ASX:AGR) show fertile phosphate economics
Aguia Resources’ updated Bankable Feasibility Study has confirmed robust economics for its wholly owned organic phosphate project in the Lavras do Sul municipality of southernmost Brazil.
The project now has a proven capability of producing 316,000 tonnes of organic phosphate a year across an 18-year mine life, bringing in an average EBITDA of $22.1 million for an internal rate of return of 54.7 per cent and payback in under three years.
$0.02Aguia Managing Director Dr Fernando Tallarico said the results reaffirmed superior project economics.
“We believe that the investment which the company has made in agronomical testing over the past 3
years and more has established the efficacy of our phosphate fertiliser as a truly unique organic
product,” he said.“In addition to phosphate, it contains magnesium, calcium and a range of micronutrients
essential for plant nutrition. We believe its potential market reach in these times holds significant value for shareholders.”
At the project’s core is producing organic fertiliser by mining only the saprolite, which boasts a high average grade of 8.8 per cent phosphorus pentoxide — across a deposit capable of meeting a tenth of demand from a fully import-dependant 300km surrounding radius.
After long relying on imports, Brazil’s federal government moved to reduce fertiliser dependency and claim its sizable reserves for one of the world’s fastest-growing agricultural sectors, a directive somewhat hindered by the nation’s complicated legal system.
Aguia is subject to a public civil action suit but seems confident in settling soon and is actively preparing for construction to begin as soon as the case is resolved.
AGUIA RES FPO [AGR]