Very good news! VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 22, 2016) - DuSolo Fertilizers Inc. (TSX VENTURE:DSF) ("DuSolo" or "the Company") is very pleased to provide an update on its corporate activities, exploration and permitting status, product development, new management appointments and the re-start of extraction operations at the Santiago Project. The Company has been undergoing a restructuring of its operations in Brazil and Canada, optimizing the value of its assets to create significant value for shareholders.
OVERVIEW
The Company's assets consist of a number of exploration concessions in Tocantins State (totaling 54,073 hectares) containing phosphate rock (P2O5) deposits, and the Company also owns and operates the Santiago Project, located in Tocantins State, with a crushing / milling / screening plant located near the town of Campos Belos, just south of the Tocantins border in Goias State. The Company produces a Direct Application Natural Fertilizer ("DANF") sold to local farmers and large agricultural companies such as COFCO, Bunge, Jalles Machado and Goiasa, who are among the largest growers of sugar cane, soya beans and corn in Brazil.
The Company recently completed delivery of all stockpiled phosphate material at the Campos Belos plant, and given existing sales contracts and customer demand, has re- started extraction operations at the Santiago Project. This material will provide DANF for customer deliveries in 2016 and through to mid-2017. 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. The Company is currently finalizing a Preliminary Economic Assessment ("PEA") of DANF production - please see the section of this release entitled "Technical Reports".
The Company continues to focus on cost reduction and completed the consolidation of its management and technical team in the Belo Horizonte office. As at 1st November the Company had c.$2m in cash as it continues to work on the development of its Bonfim Project in Brazil.
STOCKPILE SALES
The Company has now processed and sold all its stockpiles of both product and run-of- mine ("ROM") material at the Campos Belos Plant. Total sales to November 17, 2016 of both 12% and 15% Phosphate DANF are 27,868 tonnes. The Company currently has signed forward sales contracts to deliver an additional 9,306 tonnes.
NEW PRODUCT DEVELOPMENT
Brazil remains a substantial agricultural market and imports significant quantities of fertilizer including phosphate-based products. The Company is working with Agroconsult, the leading Brazilian consultancy for agriculture and fertilizers, to determine market size potential and pricing ranges for various products to be used in the PEA for the acid granulated product.
Two potential products include the granulation of higher grade material (approximately 15% P2O5) with sulphuric acid to improve the agronomic performance, and beneficiation of medium grade material (between 6%-8% P2O5) to produce products such as Single Super Phosphate ("SSP").
RESOURCE DRILLING
Exploration work continues at the Company's concessions, with field mapping, auger drilling and sampling. A drilling program for the Bonfim, Amaury and Depasa concessions has been designed with input from various technical consultants, to maximize the information generated including samples for metallurgical testing, whilst minimizing the drilling cost. Drilling will include augering, diamond core and reverse circulation holes. This program will provide data to prepare an updated resource estimate at the Bonfim, Amaury and Depasa concessions, targeting material similar to the existing resources grading between 6%-8% P2O5 and will occur in 2017.
Assuming successful exploration results and a positive increase in the resources which are the subject of the Company's existing resource estimate, the Company expects to assess the potential for the production of a high grade phosphate fertilizer, similar to SSP, utilizing the medium grade (6-8% Phosphate) material at the Company's concessions.
The Company has focused its exploration efforts during the second half of 2016 to support the re-start of the extraction of phosphate rock, prepare the PEA for DANF production and to help prepare the necessary Exploration Reports for the National Department for Mineral Production ("DNPM") that will allow for Kalunga I & II, Depasa and Bonfim to convert to mining concessions. The Company also intends to relinquish concessions east of the main phosphate bearing structure as these are deemed to have little potential.
TECHNICAL REPORTS
The Company is in the process of preparing the following two Technical Reports with its independent technical consultant GE21 Consultoria Mineral based in Belo Horizonte:
- A PEA for the production of 12% and 15% Phosphate DANF expected by the end of 2016. This report will include an updated Resource for the Santiago Project and is targeting the extraction and processing of up to 100,000tpa.
- On the back of the PEA report noted above, the Company is working on a second PEA for the production of an Acid Granulated Phosphate Fertilizer combining 15% Phosphate DANF with Sulphuric Acid to improve the agronomic performance of the DANF. The intent of this granulated product is to widen the market available to the Company, and achieve higher selling prices due to improved solubility and agronomic performance. This report is targeted for completion by mid-2017.
PERMITTING
The Company is currently permitted to extract material from the Santiago Project by a Guia de Utilization ("GUIA") issued by the DNPM, and an Environmental Licence issued by Naturatins, the Tocatins State Environmental Agency. GUIAs are issued under the terms of the exploration concessions, and are replaced by the life of mine licence known as a Portaria de Lavra, issued by the DNPM. The GUIAs are re-issued on an annual basis and are valid until after completion of exploration activities and the issuance of the Portaria de Lavra. A life of mine Environmental Licence is also required, issued by Naturatins.
The Company expects to renew its GUIA to permit the extraction of 100,000t per annum in or before April 2017, and its current Environmental Licence is valid until August 2018. After completing the DANF PEA in 2016, the Company will prepare and submit its application for a Portaria de Lavra in early 2017, and expects to receive approval during 2017. In a parallel process the Company will apply for its life of mine Environmental Licence from Naturatins. The Company and its consultants meet regularly with both DNPM and Naturatins and do not anticipate any issues in obtaining its life of mine licences for the DANF operation.
Read more at https://www.stockhouse.com/news/press-releases/2016/11/22/dusolo-provides-corporate-update-restarts-extraction-at-santiago-project#y1I1VXfk4JlBfIoq.99