RE: AGM I attended. Peter Marrone ran the meeting. Was apologetic about the delays and cost overruns at Itafos. Said that it was nearing completion (at a rate of about 1.5% per week, so is virtually 100% complete and will be very soon). Production to start in June with either 15,000 tons or 35,000 tons presold and or prepaid.
I asked a couple of questions about 1) time frame for ramp up to full production and 2) whether future projects would be capable of being funded from cash flow as Marrone did make comments about the company being very credit worthy.
Answers were as follows:
1) Itafos would be capable of ramping up to full production (40,000 tons per month) by September or October. That is not to say that this is exactly what will happen; Marrone suggested that they will essentially produce what can be sold, as opposed to producing for inventory. The good news is that the ramp up into production in the September/October period coincides with the planting/fertilizing season in Brazil so, if you're about to go into production, it's just about the best time to do so.
2) I was concerned about more debt and further dillution. Marrone stressed that the financial needs of the company to operate were drastically lower than the capex requirements in terms of developing Itafos and that any need for further debt going forward should be drastically lower accordingly. In terms of future projects (like Santana) he indicated that MBAC may look at strategic partnerships in terms of developing those projects as well as sales of existing assets to avoid taking on further debt and/or dillution. He intimated that Araxa may be one asset they may consider selling as it is less a "fit" with the long term strategic plan for the company than others.
He stressed that 2014 is really the year that things happen in terms of transition but also felt the stock was extremely undervalued at the current price and should move solidly higher before year end.