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Aguia (ASX:AGR) hits critical milestone, secures construction licence for Brazilian phosphate project - Kalkine Media

November 04, 2022 11:12 AM AEDT | By Manisha
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Highlights

  • Aguia Resources has obtained a grant of the construction licence for its phosphate project.
  • The construction licence is a major breakthrough in the environmental permitting of the mine.

Aguia Resources Limited (ASX:AGR) recently announced to have secured a construction licence for its phosphate project, which sits within the State of Rio Grande do Sul, the southernmost state of Brazil.

The update regarding the grant of the construction licence was first released by the State Secretary for the Environment at the Lavras Agricultural Fair. The project was termed as “emblematic” by the Secretary in terms of its positive environmental and social aspects. The Secretary also welcomed the opportunity the project offers for greater prosperity in the region.

Based in the State of Rio Grande do Sul, one of the largest grain producers in Brazil, Aguia is managing two well-developed projects currently – a phosphate project to produce organic phosphate fertiliser and a copper project to produce cathode copper.

Prominence of the construction licence

Considered to be a crucial breakthrough in terms of environmental permitting of the mine, the construction licence brings with it the essential authorisation for commencing construction and development work at the project location. It marks a significant de-risking measure for construction as well as production.

Image Source: © 2022 Kalkine Media®, Data Source: AGR Announcement

In the permitting process, approval for the operation licence forms the next and final phase. For securing the operation licence, site inspection is conducted prior to the opening of the mine and processing plant. The inspection will ensure that the phosphate project was built as per the sanctioned project design and is in compliance with the safety, health, environmental, and mining norms.

Overview of the highly lucrative phosphate project

The phosphate project is situated in the State of Rio Grande do Sul, the southernmost state of Brazil. At present, 100% of the state’s phosphate needs are imported. The project holds a JORC-compliant measured and indicated resource of 83.21 Mt grading 4.11% P2O5 and another 21.8 Mt grading 3.67% P2O5 of inferred resource.

Aguia expects the project to produce around 300,000 tonnes per annum of organic phosphate fertiliser over the 18-year life of mine, once the ramp-up term of the mine and processing plant completes. Also, the company anticipates less than 5% of the resources from this project to be consumed.

AGR is anticipating strong interest in its product from regional farmers during construction.

Aguia claims that its phosphate project is highly lucrative, owing to its expected annual EBITA of around AU$14 million. Pampafos, AGR’s organic fertiliser, will be manufactured at a low operational cost.


Image Source: AGR Website

Key developments further advancing the project

Aguia has been successful in substantially lowering its operating costs by embracing sustainable practices. The company expects to secure a certification of triple net-zero for its processing plant by EDGE, a green building certification system designed by the International Finance Corporation, part of the World Bank.

The ASX-listed firm has managed to secure a loan from the Development Bank of Southern Brazil (Banco Regional de Desenvolvimento do Extremo Sul - BRDE) for around 50% of the capital expenditure for the project.

AGR shares traded at AU$0.063 on 3 November 2022.


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