- Aguia Resources has its mineral resource projects located predominantly in the Southern part of Brazil.
- The situation of COVID-19 has proven to be a tall order to tackle for Brazil as there has been an increasing impact on the social as well as economic aspects.
- AGR has taken all necessary measures in compliance with the orders of the Government of the State of Rio Grande do Sul.
- AGR is advancing well towards applying for the Installation License of its Três Estradas Phosphate Project in coming times and is also looking forward to filing the Economic Exploitation Plan with Brazilian Mining Agency (ANM) in Q4 2020.
Metals and mining company with main focus on exploration and development of mineral resource projects in Brazil, Aguia Resources Limited (ASX:AGR) has its land holdings in the State of Rio Grande do Sul (RS State), Brazil, especially the Três Estradas Phosphate Project.
Brazil is amongst the most severely hit countries due to COVID-19 and has reported a record 1,262 deaths from COVID-19 in 24-hours’ time to Tuesday night (2 June 2020). Aguia’s phosphate assets, as well as copper exploration portfolio, is located predominantly in Southern Brazil. The Company has provided an update regarding the impact of the COVID-19 pandemic on the State of Rio Grande do Sul (RS), Brazil and has confirmed that the situation is under control in the state.
As mentioned by Aguia, the population of Rio Grande do Sul stands at around 11.3 million on 1 June 2020, with 9,496 COVID-19 cases reported and 232 fatalities.
State Government’s Role
As Updated by the Company, the State Government is not bound by the Brazilian Federal Government and has total responsibility for managing the situation. The Government has been proactive in responding decisively to implement strict quarantine measures and closed its borders with neighbouring Uruguay and Argentina in mid-March.
Several factors like the number of intensive care units, availability of resources, along with other public health factors, and economic criteria have been taken into consideration by the Government to develop a risk matrix for each municipality. Moreover,
- Mapping of the distribution of cases across the state has been carried out.
- Classification of each municipality of RS State according to a colour code reflecting their COVID-19 risk is also done such as Yellow – low risk; Orange-medium risk; Red – high risk, and Black – extremely high risk.
COVID-19 risk map of RS State (Source: Company’s Report)
As can be seen from the map, there are no municipalities that are at ‘high’ or ‘extremely high’ risk. Moreover, field activities were suspended by Aguia, and its employees have been working from home when the state entered quarantine.
The Government of the State has called the tune and announced an easing of the quarantine rules in the last week with the reopening of shopping centres, restaurants, and other businesses, subject to some precautions. The Company has been developing its Três Estradas Phosphate Project in the State of Rio Grande do Sul, weathering the storm arising from the COVID-19 pandemic.
Excellent Economics Confirmed by Scoping Study
During the quarter ended 31 March 2020, the Company had concluded an independent Scoping Study for its Três Estradas Phosphate Project which confirmed excellent economics, very low Capital Expenditure and quick pay-back at the project with the following financial analysis:
Funding Support from Brazilian Bank
Aguia had also received a letter from the Development Bank of Southern Brazil confirming the support for a development loan to fund up to 50% of the capital expenditure for the Três Estradas Phosphate Project, after the review of results from the scoping study.
Detailed Discussion at: Aguia Resources Receives Up To 50% Funding Letter on CapEx for Três Estradas Phosphate Project
Progress for Obtaining LI
Moreover, Aguia Resources has been actively engaged in the advancement of its Três Estradas Phosphate project and is seeking to obtain Installation License (LI) for beginning further activities at the Project and authorise the construction.
AGR has advanced the Environmental work and programs initiative, a key initiative, to facilitate the granting of the critical Installation License (LI). It also mandatorily requires agronomic trials, engineering detailing, and community and landowner communication.
In addition to this, AGR’s substantial progress with the agronomic trials and results from agronomic laboratory tests have kept the wheels greased for the Company as the results were suitably within the requisite conditions to produce a Natural Phosphate Product. Also, the Company is progressing well with the preparation of the detailed engineering for Phase 1 in compliance with the conditions of the Preliminary License.
Further, after formal consultation regarding the capacity to supply power to the project for Phase 1 with the state power company (CEEE), the CEEE has validated the availability of the capacity to offer power from a transmission line located around 10km away from the planned production unit.
Aguia looks forward to filing the Economic Exploitation Plan (PAE) with ANM in Q4 2020 and has been progressing with all requirements of the Brazilian Mining Agency (ANM) in accordance with the Brazilian Mining Law. Moreover, AGR expects to receive ANM approval by Q1 2021, which is critical for the granting of the Installation Licence (LI) for the Três Estradas Project.
The Três Estradas Phosphate Project has a current NI 43-101/JORC compliant Measured and Indicated Mineral Resource comprising 83.210 million tonnes grading 4.11% P2O5 and 21.845 million tonnes of Inferred Mineral Resource grading 3.67% P2O5.
AGR is well-placed to emerge as a strong, local phosphate producer while contributing to the growth and development of the agribusiness sector in Brazil.
The AGR stock closed at a price of $ 0.055 on 03 June 2020 with a market capitalisation of $ 12.39 million.
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