DuSolo Releases Positive Results from Santiago Project Preliminary Economic Assessment
(Thomson Reuters ONE) -
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Mar 23, 2017) - DuSolo Fertilizers
Inc. (TSX VENTURE:DSF) ("DuSolo" or "the Company") is very pleased to announce
the completion of a positive Preliminary Economic Assessment ("PEA") of the
Company's Direct Application Natural Fertilizer ("DANF") Santiago Project (the
"DANF PEA"). The DANF PEA was prepared by the independent consultants GE21 Ltda.
Giles Baynham, CEO of DuSolo, noted "We are very pleased to complete this DANF
PEA and announce the results. Whilst we have been producing and selling DANF
since 2015, this is the first Technical Report which demonstrates the positive
economic potential of Santiago, and the Company believes it is the start of
demonstrating the longer-term and higher value potential of the Company's assets
in Brazil which will be the Company's aim throughout the course of 2017. We are
now working on a separate PEA for the acid granulated DANF product (the "AG DANF
PEA"), as well as exploration of the Amaury Concession. Market and product
development is underway, as recommended by our market consultants, to achieve
the DANF prices in the Upside Case."
The DANF PEA is the first stage of the Company's strategy to demonstrate the
economic potential of the Company's mineral resources based on the phosphate
("P(2)O(5)") deposits at its BonFim Project in Brazil. The Santiago deposit
within the Bonfim area currently extracts phosphate rock which is processed into
two DANF products grading 12% and 15% P(2)O(5) at the Campos Belos Plant. The
second stage of this strategy is to further improve its economic viability
through the potential production of an Acid Granulated Phosphate Fertilizer,
which combines 15% DANF with sulphuric acid to improve the agronomic performance
of the DANF. This granulated product is expected to increase the market
available to the Company, and yield higher selling prices due to improved
solubility and agronomic performance based on a market study completed by
Agroconsult. With the positive results of the DANF PEA, the Company has
commenced the second stage of the strategy to produce the AG DANF PEA which is
targeted for completion in the second half of 2017.
DANF PEA HIGHLIGHTS
* Indicated Resources of 1.16Mt at 8.23% P(2)O(5), including 0.29Mt at 14.78%
P(2)O(5)
* Inferred Resources of 2.70Mt at 8.58% P(2)O(5), including 0.82Mt at 14.72%
P(2)O(5)
* 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
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. A NI43-101 technical
report for the DANF PEA will be filed on SEDAR (www.sedar.com) and posted on
DuSolo's website (www.dusolo.com) within 45 days.
The Company is not basing its production decision on a feasibility study of
mineral reserves demonstrating economic and technical viability, as a result
there is increased uncertainty and economic and technical risks of failure
associated with its production decision.
GEOLOGY & MINERAL RESOURCES
The Bonfim Project, within which the Santiago Project lies, is within a large
package of rocks along the western edge of the São Francisco craton and
immediately east of the Brasilia fold belt in central Brazil (Mendonça and
Campos, 2012; Da Rocha Araujo et al., 1992).
Within this area, rocks of the base of the Bambuí Group can be found that are
associated with the Sete Lagoas Formation, which is host to the phosphate
mineralization. It includes the pelitic, carbonatic and phosphatic rocks that
overlie the granitic rocks of the Aurumina Suite. The Sete Lagoas Formation can
be found in the majority of the area and is distributed to the east of the
granitic basement.
Mineral exploration work and exploratory drilling was intensified since the
March 7, 2014 Technical Report which included the Amaury and Bonfim Concessions.
Re-interpretations were undertaken and - because of the various types of
mineralization present, which display a large range of phosphate concentrations
- the mineralization was separated into two principal groups: high grade (HG)
and low grade (LG).
The Mineral Resource Estimate for the Santiago Project was updated for this DANF
PEA utilising recent drilling and exploration results, including a better
understanding of the mineralization types and zoning, and of the continuity of
grades and mineralization based on the extraction of around 100,000 tonnes since
late 2014 from the Santiago Project.
+------------------------------------------------------------------------------+
| Table 1 |
| Mineral Resource Table - Phosphate |
| Indicated and Inferred Resources |
+---------+----+-----------+---------+-----+----+-------+----------+-----------+
|Resource |Type|Tonnes (Mt)|P(2)O(5)%| CaO%|MgO%|SiO(2)%|Al(2)O(3)%| LOI%|
+---------+----+-----------+---------+-----+----+-------+----------+-----------+
| | HG*| 0.29| 14.78|20.49|1.02| 41.53| 8.44| 4.08|
|Indicated+----+-----------+---------+-----+----+-------+----------+-----------+
| | LG*| 0.87| 6.08| 7.92|1.22| 58.79| 9.96| 3.90|
+---------+----+-----------+---------+-----+----+-------+----------+-----------+
|Total | | | | | | | |
|Indicated | 1.16| 8.23|11.03|1.17| 54.52| 9.59| 3.94|
+---------+----+-----------+---------+-----+----+-------+----------+-----------+
| | HG*| 0.82| 14.72|20.92|0.97| 42.62| 7.95| 4.22|
|Inferred +----+-----------+---------+-----+----+-------+----------+-----------+
| | LG*| 1.88| 5.89| 7.83|1.48| 58.39| 10.73| 4.43|
+---------+----+-----------+---------+-----+----+-------+----------+-----------+
|Total Inferred| 2.70| 8.58|11.82|1.32| 53.59| 9.88| 4.37|
+--------------+-----------+---------+-----+----+-------+----------+-----------+
|· High Grade Mineralization (HG): P(2)O(5) >= 10%, Low Grade Mineralization |
|(LG): P(2)O(5) >= 3% and <10% |
|· Mineral Resources are based on dry tonnes. |
+------------------------------------------------------------------------------+
EXPLORATION POTENTIAL
Mineralization at Santiago remains open along the NW-SE trend, with a number of
samples of outcropping phosphorite grading between 7.5% to 23.3% P(2)O(5). The
potential area is some 3 times the size of the current area considered in this
DANF PEA and GE21 estimated an exploratory potential of 5 million tonnes to 14
million tonnes with the P(2)O(5) grade varying between 4% and 18%. The potential
quantity and grade is conceptual in nature, there has been insufficient
exploration to define a mineral resource and that it is uncertain if further
exploration will result in the target being delineated as a mineral resource in
the future.
MINERAL PROCESSING & METALLURGICAL TESTING
The material is placed in the run-of-mine ("ROM") patio area, stockpiled and
blended in such a way so as to guarantee a constant feed grade for the
beneficiation process. The processing route consists of crushing, screening and
grinding, as shown in figure 1.
To view Figure 1, please visit the following link:
http://media3.marketwire.com/docs/DuSolo-Fig1.pdf.
All of the material that is obtained from mining is transformed into the final
product, which generates products that have greater or lesser value, depending
on the phosphate concentration. Therefore, tailings are not produced during ore
processing, and the recovery of material during the process is 100%.
For internal quality control purposes, the company maintains its own laboratory,
with equipment that serves to analyze certain characteristics of the product
such as particle size, comminution, sample preparation and a spectrophotometer
for determining the concentration of P(2)O(5).
+------------------------------------------------------------------------------+
| Table 2 |
| Summary of Production |
+-------------------------------------------+----------------------+-----------+
| Material | Mass wet basis(Kt)(1)|P(2)O(5)(%)|
+-------------------------------------------+----------------------+-----------+
| | | |
+---------------+----+----------------------+----------------------+-----------+
| | | P(2)O(5)12%| 543| 11.90|
| | +----------------------+----------------------+-----------+
| |Type| P(2)O(5)15%| 635| 15.24|
| +----+----------------------+----------------------+-----------+
|Mining products| Total | 1 178| 13.70|
+---------------+---------------------------+----------------------+-----------+
+-------------------------------------------+----------------------+-----------+
|Waste Rock | 865| n/a|
+-------------------------------------------+----------------------+-----------+
+-------------------------------------------+----------------------+-----------+
|Material Stockpiled for Potential Future | | |
|Beneficiation | 1 080| 7.15|
+-------------------------------------------+----------------------+-----------+
+---------------+----+
|Strip Ratio(2) |1.56|
+---------------+----+
|Strip Ratio(3) |0.37|
+---------------+----+
(1)Wet tonnes contain 12% moisture, both as ROM and as product;
(2)Considers the material stockpiled for Potential Future
Beneficiation as waste rock;
(3)Considers the material stockpiled for Potential Future
Beneficiation as product.;
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.
CAPITAL & OPERATING COSTS
As the Santiago Project and the Campos Belos plant are already extracting and
processing phosphate rock, there is no additional capital requirement for the
Project. Sustaining capital over the LOM is minimal and included in the
maintenance costs. The Company estimates the existing capital equipment (primary
crusher, hammer mills) have a capacity of c.280,000 tonnes per annum and the
projected DANF PEA production of 100,000 tonnes per annum is approximately 35%
of the actual installed capacity, resulting in reduced operating hours and
general wear. Mobile equipment such as trucks, water trucks and front-end loader
and excavator are all supplied on a contract basis. The Company maintains
insurance for its assets which includes the Campos Belos plant.
Operating costs are based on actual costs incurred by the Company, using the
2016 actual mining and processing costs. Fixed costs have been adjusted for the
increase to 100,000 tonnes per annum.
+--------------------------------------------------+
| Table 3 |
| |
| Operating Costs |
+------------------------------+-------+-----------+
| Item | Cost | Unit |
+------+-----------------------+-------+-----------+
| | Ore | 2.88 | |
| Mine +-----------------------+-------+ |
| | Waste Rock | 0.97 | |
+------+-----------------------+-------+ |
| Transport & Road Maintenance | 6.17 | |
+------------------------------+-------+ US$/t ROM |
| Plant | 5.11 | |
+------------------------------+-------+ |
| G&A | 3.34 | |
+------------------------------+-------+ |
| Total | 18.47 | |
+------------------------------+-------+-----------+
A trade-off study to assess the impact of relocating the Campos Belos Plant to
the Santiago Project and significantly reducing transport costs is currently
being prepared.
Taxes are included in the PEA cashflow analysis as follows:
Royalties - 3.0% of revenue
Taxes - 29.8% of EBIT
The Company has significant tax losses available to be applied to future income
in Brazil which have not been included in the DANF PEA analysis.
DANF MARKET REPORT & PRICES
This DANF PEA has assumed the following prices for the DANF products, based on
the prices in 2016 and currently being received for the following products:
DANF 12% P(2)O(5) - US$31/t
DANF 15% P(2)O(5) - US$56/t
Agroconsult provided a market study for the DANF products that DuSolo intends to
produce. Assuming an average LOM production of 50,000tonnes per year for each
product, Agroconsult's analysis suggests the following prices can be achieved:
DANF 12% P(2)O(5) - US$76.4/t
DANF 15% P(2)O(5) - US$93.7/t
These prices are higher than currently achieved, but Agroconsult notes that with
the correct strategy of market and price development and branding these higher
prices could be achieved. GE21 have prepared an upside case model using the
higher Agroconsult prices, and assuming an increase in marketing and selling
costs of US$1,11 per tonne (approximately 50% increase in G&A). This results in
an increase of the net present value to US$30,28million. GE21 recommends that
management maintain its focus on marketing and sales prices, as this could
provide significant improvements in the Santiago Project returns for limited
increases in operating costs.
QUALIFIED PERSONS
The technical content of this news release has been reviewed and approved by Mr.
Porfirio Cabaleiro Rodriguez and Mr. Bernardo 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 report 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. 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. Mr.
Rodriguez is 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 a long run
and as to whether the Company will be confronted with any unforeseen technical
impediments. Similarly, the Company has not completed a preliminary economic
assessment before making production and project expansion decisions.
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.
DuSolo Fertilizers Inc.
(604) 484 7122
ir(at)dusolo.com
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
Unternehmensinformation / Kurzprofil:
Datum: 23.03.2017 - 18:49 Uhr
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