Aguia locks in decade-long Brazilian phosphate | Australian Markets

Aguia Sources has nailed down a 10-year binding lease settlement to course of natural phosphate from its Três Estradas project close to Caçapava do Sul in southern Brazil’s agribusiness heartland.

Below the phrases of the lease, Aguia will operate the Dagoberto Barcelos-owned processing facility at a month-to-month value of BRL$163,000 (A$43,000) and a BRL$5 million (A$1.4m) one-off cost to the house owners. Aguia has an option to increase the lease for a additional 10 years.

The settlement grants Aguia control over a totally operational fertiliser processing facility, which is able to save the company at the least two years of construction time and considerably scale back its capital expenditure. Processing is set to start within the third quarter this 12 months, with an initial capability of 100,000 tonnes each year (tpa).

The deal marks a main milestone for Aguia and its ambitions to grow to be a phosphate producer as quickly as attainable. For more than three years, the project had been bogged down in legal battles with native ranchers, who efficiently blocked any manufacturing at Pampafos.

Nonetheless, in a decisive flip of occasions, the regional court docket overturned the ultimate objection three months in the past, clearing the best way for the project to achieve its full potential.

The Três Estradas project – 100 kilometres from the plant and the source of its Pampafos rock phosphate – will initially fuel the processing plant. Nonetheless, a actual game-changer for the company lies in its nearer Mato Grande and Passo Feio deposits, that are 3km and 8km from the manufacturing facility. The company is rapidly evaluating each websites, with drilling already in full swing.

By 2026, Aguia says it goals to utterly change processing to the new deposits, saving nearly $10 per tonne in trucking prices and enhancing revenue margins.

The DB plant has been buzzing alongside at 100,000 tonnes per 12 months for the previous eight years, however Aguia sees critical enlargement potential. When the money begins flowing, the company is trying so as to add a hammer mill, a second drying unit and a few system enhancements to the plant, which might triple the plant’s manufacturing capability to more than 300,000tpa.

Aguia’s choice to lease the DB plant seems a savvy shift in strategy since a 2023 bankable feasibility research advised a standalone 300,000t manufacturing plant might have value the company as a lot as $26m to construct.

The research made compelling studying given it projected annual earnings of $22m (EBITDA) over an 18-year mine life, with a short payback period of 2.9 years.

In parallel with the DB plant signing, Aguia is in talks with an further processing facility within the Caçapava do Sul area to increase manufacturing capabilities.

Aguia Sources government chairman Warwick Grigor mentioned: “This binding lease agreement with DB is a major step forward for Aguia in Brazil. With Brazil largely dependent on phosphate imports, we are confident of carving out a meaningful market position in southern Brazil, the country’s pre-eminent agricultural region.”

The Rio Grande do Sul area, the place Aguia operates, at present imports 100 per cent of its phosphate wants at a value of about $344 per tonne. Aguia is aiming to at the least halve that quantity by offering a regionally sourced, high-grade product at a forecast price of $150-$160 per tonne, creating a substantial aggressive benefit.

With Brazil so closely reliant on imports, largely from North Africa, Aguia views its transfer as a vital step towards building homegrown provide security.

Aguia has good cause for betting huge on its branded Pampafos product to shake up Brazil’s phosphate market. With international subject trials spanning 4 years, its natural product has confirmed itself to be far more efficient than imported alternate options.

Not like chemical fertilisers that degrade the soil over time, Pampafos boosts crop efficiency naturally with out degradation, making it a cost-efficient, high-performance resolution for Brazilian farmers.

Past phosphate, Aguia has additionally been busying itself with the recommissioning of its uber-high-grade Santa Barbara gold project in Colombia after efficiently taking up ASX-listed Andean Mining 12 months in the past.

With the mine and a 30-tonne-per-day pilot plant now refurbished and up and working at web site – costing much less than $2m – first ore has been processed, kicking off an initial cashflow with a maiden pour of the yellow metallic.

Aguia will shortly crank up the drilling rigs to construct a JORC-compliant useful resource base for a mine that has traditionally produced gold at more than one ounce per tonne. The company additionally plans to increase its processing capability by 66 per cent to 50tpd within the subsequent three months.

With Brazil in search of larger self-sufficiency in agricultural inputs, the approaching begin of Aguia’s native phosphate manufacturing appears notably well-timed. Because it edges nearer to first money movement, the company seems poised to money in on rising phosphate demand whereas avoiding the volatility of worldwide delivery and international provide chains.

Not long in the past Aguia was nearly retaining its head above water on the ASX junior explorers index, with an empty bank steadiness and a project bogged down in long-term legal points.

Remarkably, within 15 months and with little capital expenditure, a lot of onerous work – and a bit of luck – the company can now see a clear path to a twin income stream from gold and phosphate operations, placing it in an enviable place amongst some of its mining friends.

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