GraniteShares Gold Trust BAR

Diversification: Another UGE-type investment

[BCdude]

Hi all,

With the recent pullback in smallcap stocks, I thought I would bring to everybody's attention Verde Agritech (NPK), another investment that, like UGE, has multi-bagger long-term investment potential.

I owned Verde back in 2014, but sold it because it was too early stage for me back then. It has since developed several chloride-free potash products made from using a near-surface, easy-to-mine deposit of gypsum-style rock in Brazil. The CEO started the company 14 years ago and hopes to build the current ~250k tonnes of annual production, which is already profitable, into as much as a 25 million tonnes per annum. This is noteworthy, as Brazil is one of the world's largest agricultural nations, but imports most of its potash, so Verde is increasingly becoming a strategic resource for the country.

The numbers are staggering for a junior mining company: a feasibility study in 2017 has a net-present value of discounted future cash flows worth $2 billion USD (more than $50.00 per share) compared to its current price of $1.35. Internal rate of return is over 250%, which is the best I've seen in the junior resource market, and the gross margins improved to 67% last quarter despite falling potash prices.

Also, despite being around for more than a decade, Verde only has around 50 million shares outstanding. The CEO has managed to build a profitable operation without dilution. So rare.

Best of all, their fertilizer products have been attracting international attention because without chloride it's considered a regenerative product, which helps to rebuild damaged soils and the microorganisms that enable it to store carbon. If you watch the recent documentary "Kiss the Ground," many scientists are starting to realize that regenerative farming practices have the ability to reabsorb huge amounts of already emitted greenhouse gases -- so I predict we'll hear a lot more about this transition in agriculture to fight climate change.

Like UGE, Verde is a unique story that hardly anyone has heard about, but with profitability, accelerating growth, and tailwinds for ESG stocks, I doubt this lasts much longer. My hope is that Verde is a ten-bagger within a decade, by which time it could also be a dividend payer.

There's a great group of long-term shareholders that post on the NPK board, and I find it to be one of the most useful places to stay up-to-date on what's happening with the company.

Best of luck, BCD

[alleyesonme]

Nice summary thanks for the tip BCD! This is on my watch list now.

[BCdude]

My pleasure, alleysonme. These types of investments don't come along every day. And considering the discerning crowd investing in UGE, I figured some might also be interested in this one.