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DuSolo Fertilizer En Route to Phosphate Production in Brazil

August 28, 2014

Vivien Diniz



DuSolo Fertilizer En Route to Phosphate Production in Brazil

When it comes to agri-business, Brazil tops the list with a significant spread of exported commodities, including coffee, sugar, beef and sugar cane. With Brazil’s agriculture industry booming, one very important ingredient is necessary for success: fertilizer. What’s more is that with no significant production of fertilizer minerals like potash or phosphate, Brazil relies heavily on imports to keep its soils in prime shape for the growing seasons. But with the country endeavoring to boost its fertilizer production, there may be some hope yet for reduced imports. 


The main agricultural hubs of the South American country are southern Brazil, which accounts for roughly two-thirds of the country’s agriculture. Brazil’s northern region – which includes some of the Amazon basin – is also becoming a significant region for agriculture, however, the region is characterized by far drier temperatures than it’s southern counterpart, often falling victim to droughts. Northern Brazil also falls short when it comes to infrastructure, capital and good soil, but there is still a substantial amount of crops, such as cocoa and tropical fruits, that make this region of significant importance to Brazil’s agriculture industry. Central Brazil is also a region that has started gaining some attention when it comes to agriculture. In what was once thought to be land unsuitable for farming, is now thriving with mechanized crop agriculture.

One of the companies currently working on developing a phosphate project in central Brazil is DuSolo Fertilizer (TSXV: DSF), which  announced on Thursday that it had secured an operational license for its proposed Santiago mine, part of the Bomfim phosphate project. The granting of the mine site operational license is the latest in a series of licenses and and progress that the company has made at Bonfim in over the course of the last month.

Earlier this month, DuSolo secured a lease and completed the upgrade on the its Phosphate Fertilizer processing facility. Indeed, securing the lease was a significant milestone for the company and combined with the completion of the processing facility, the company now has a process plant with a capacity to produce 80,000 tonnes of direct application natural fertilizer (DANF) per year. Now, with the latest news, as Haywood analyst Mick Carew highlights, ”DuSolo is now one permit away from beginning production of DANF at its proposed Santiago mine.”

Once the final permit is in place, the company is expected to be producing the 80,000 tonnes per annum of DANF, while also pursuing an aggressive drill program to expand the resource. Carew notes that the firm is looking forward to DuSolo acquiring its mine permit for Santiago, as it will be key in transitioning the company from an explorer to a producer.

DuSolo is a 75-percent owner of Bonfim with an option to increase ownership to 100 percent should it meet certain obligations. The project’s claims are found mostly in the southern part of the Tocantins state, nearby MbAC Fertilizer’s (TSX: MBC) operational Itafos Arraias SSP project. The project has an initial resource estimate of 462.6 Kt of measured and indicated P2O5 at an average grade of 11.88 percent, and an inferred resource of 18,270.30 Kt at an average grade of 6.32 P2O5, the estimate was determined using a cut-off grade of 3-percent P2O5.

DuSolo is planning a staged-production with its DANF as a mean to generate cashflow in the short term, while being as cost efficient as possible. As the company notes on its site, due to the various selling prices for DANF, the company is planning to start production from the high grade ore on the property without the need to invest in a flotation plant. From there, the company is also targeting thermal phosphate production in order to reach a wider market.

As it stands, the company is awaiting its final permit.

 

Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned in this article. 

 






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