Aguia Resources Receives Up To 50% Funding Letter on CapEx for Três Estradas Phosphate Project

  • Apr 06, 2020 AEST
  • Team Kalkine
Aguia Resources Receives Up To 50% Funding Letter on CapEx for Três Estradas Phosphate Project

Aguia Resources Limited (ASX:AGR), a company engaged in developing phosphate assets and advancing copper exploration assets portfolio located predominately in Southern Brazil, has received a letter of support from the Development Bank of Southern Brazil (BRDE), which is a recognized and well respected Brazilian institution that promotes economic and sustainable development in Southern Brazil.

After an extensive review of the Três Estradas Phosphate Project, its been confirmed that it meets the banks investment criteria therefore the letter received intends to fund up to 50% of the capital expenditure in the form of a development loan for the project.

Managing Director’s Note

The Managing Director of Aguia Resources Limited, Dr Fernando Tallarico, commented that the support of BRDE for Três Estradas offers validation of substantial economic, social and environmental benefits for the southern region, more importantly to the Rio Grande do Sul State.

He further added:

Acquainting with Três Estradas

The Três Estradas Phosphorus Project, along with Joca Tavares, and Porteira carbonatite-hosted phosphate and the Cerro Preto sediment-hosted phosphate together form the Aguia’s Rio Grande assets and are located in a farming region, which is well serviced by roads, rail, port, and power and is around 350 km from the State Capital Porto Alegre.

Três Estradas is considered as the most advanced holdings of Aguia in the region, and the Company has also penned option agreements on several adjoining properties which are currently under exploration.

The Audited Mineral Resource identified

  • 83 million tonnes of measured and indicated material at the Três Estradas with an average grade of 4.1% P2O5 using a cut-off grade of 3.0% of P2O5 ;
  • 8 million tonnes of inferred material with an average grade of 3.67% P2O5

2017 Mineral Resource Statement Três Estradas Phosphate Project (Source: Company's Report)

Along with location in a predominantly farming region, the local infrastructure including roads, a rail line through the property and power adds to the luster of the Três Estradas Phosphate Project. Moreover, significant fertilizer blenders are located just 200km away from the project at Porto Alegre.

 

Source: Company's Website

Why Phosphate?

Phosphorus is one of the basic and most vital elements in the production of fertilizers internationally, since it plays a key role in photosynthesis and is a material element in growth and energy supply in living organisms, especially plant life.

With this backdrop of Phosphorus, let’s learn quick facts about Brazil’s agricultural sector:

  • Brazil is the fastest-growing fertilizer market in the world and is a Global Agricultural Powerhouse.
  • Brazil is said to be the 4th largest consumer of fertilizer but accounts for only 4% of worldwide fertilizer production.
  • Agricultural exports greater than USD 175 billion per year, with 27% of global meat export market.
  • World leader in sugar and ethanol production from sugar, whereas soybean, rice and corn all being strategic crops.

Amongst the many factors, the usage of fertilizers was the key factor that drove the increase of grain yields in Brazil using the same cultivated area.

Since Brazil imports phosphate product from several countries including Morocco, the Former Soviet Union, China, USA, Tunisia as well as Israel, Aguia seeks to develop its phosphate assets in Brazil.

Previous Developments at Três Estradas

Aguia’s Management Discussion and Analysis for six months ended 31 December 2019, mentioned about several studies that are scheduled to be undertaken to test the viability of the development of a Direct Application Natural Fertiliser (DANF) product at the Três Estradas.

Moreover, Aguia achieved a key milestone in the process of permitting and development of the mine by receiving an LP for Três Estradas Phosphate Project, which is one of the most challenging mine permit milestones to obtain in Brazil.

The Road Ahead

AGR believes that its preparedness provides ample financial flexibility to the Company to secure all remaining permits that are likely to put the Três Estradas in a ‘shovel ready’ phase as well as ensuring the good standing position for all the copper tenements.  

Moreover, with the focus of the Company turning to the final development phase of Três Estradas, AGR has streamlined its operations and cost base in anticipation for monthly costs to lie in the range of $180,000.  

Currently, Aguia is engaged in negotiations regarding the detailed terms and conditions of the BRDE development loan and looks forward to providing an update as soon as it reaches a concrete agreement.

Also, the Company is keen to update its shareholders as well as other related stakeholders about the progress that is made in due course.

In near future, the Company looks forward to hosting a webinar for investors at 11.00 AM AEST on Wednesday 8 April 2020.

The AGR stock settled at a price of $0.075 on 06 April 2020 with a market capitalisation of $16.73 million.


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