VANCOUVER, BRITISH COLUMBIA–(Marketwired – Aug. 24, 2016) – DuSolo Fertilizers Inc. (TSX VENTURE:DSF) (“DuSolo” or “the Company”) is pleased to announce an update on its corporate activities and expected work programs for 2016 and 2017. The Company has been undergoing a restructuring of its operations in Brazil, as well as at the corporate level and reviewing the potential for each of its assets to add value to the Company and its shareholders. DuSolo now believes it has a clear pathway to optimizing the value of its assets and create significant value for shareholders.
Bomfin remains the flagship project of the Company, consisting of the Bomfin exploration concessions, the previously worked mine at Santiago and the processing plant at Campos Belos. It remains the core of the Company’s activities and will form the basis for the revised National Instrument (“NI”) 43-101 compliant technical reports the Company is preparing, including on the potential for re-starting production at Santiago and a Preliminary Economic Assessment (“PEA”) targeted for completion in H1-2017.
Stockpiles of approximately 30,000 tonnes of DANF (Direct Application Natural Fertilizer), both processed product and Run-of-Mine material, remained from 2015 and have been sold to various customers over the last few months. The Company has delivered 18,543 tonnes between October 2015 and June 2016. Demand exists for further sales, and a re-start of operations at Santiago will be dependent on the results of a NI 43-101 compliant report expected before year end.
The Company will commence drilling at several of its concessions commencing in September 2016, to further define the geological potential of the concessions, and where appropriate to provide data for a new Resource Estimate, that will form the geological basis for the PEA in 2017. This drilling will be focused in the Amaury and Depasa areas, targeting material similar to the existing resources grading between 6%-8% P2O5.
Drilling will then switch to defining higher grade material (approximately 15% P2O5) in and around the existing Santiago Resource to upgrade the existing categories towards a majority of Measured & Indicated. This work is expected to be completed in the first half of 2017.
NEW PRODUCT DEVELOPMENT
Brazil remains a substantial agricultural market and imports significant quantities of fertilizer including phosphate based products. There is a clear potential to compete with imported and high transport cost products. The Company is working with Agroconsult, the leading Brazilian consultancy for agriculture and fertilizers, to determine potential new products, market size potential and pricing ranges. This information will be utilized in the PEA.
New 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”). The PEA in 2017 will include these two options, and the Company is currently engaging the relevant independent geological, metallurgical and engineering consultants to assist in the preparation of the PEA.
As part of any development of new products, the Company will be required to apply for the relevant mining and environmental permits to allow full lifetime extraction and processing of new products. As with any such permitting process it is subject to interaction with State and Federal authorities and there can be no guarantee that the Company will be able to acquire such permits.
The Company has made a number of changes to its corporate and operational personnel, as well as operating structure in Brazil. A new project manager has been employed, Mr. Cris Gallina, who has the necessary experience and skills to execute the Company’s new strategy. Mr. Gallina is a Mining Engineer, with an MBA and 15 years of experience in operations, project development, strategic planning and mineral processing in large multinational companies – Rio Tinto and Vale. Mr. Gallina will report to the CEO and be responsible for all operations in Brazil.
The Company has relocated its Brazilian office to Belo Horizonte, in the State of Minas Gerais, which is expected to result in a significant benefit by centralizing its technical staff, providing direct access to the wealth of geological, mining, metallurgical and engineering consultants and staff based in and around Belo Horizonte. In addition, these changes are expected to reduce operating costs.
SAO ROQUE PROJECT
After a detailed review of the available data and the new objectives of the Company, it has been decided to relinquish the Sao Roque Project, which will be returned to its owners at no cost to the Company. An agreement to that effect is being finalized. The geographical separation from Bomfin and the early stage nature of Sao Roque, combined with the Company’s financial position were key factors in deciding to relinquish this asset.
DuSolo Fertilizers Inc. is focused on developing a fully integrated process to produce and sell phosphate based fertilizers within the Cerrado region of Brazil as part of a nationwide effort to increase domestically sourced fertilizers and achieve agricultural self-sufficiency.
On behalf of DuSolo Fertilizers Inc.
Giles Baynham, Chief Executive Officer and Director
Certain information contained in this press release constitutes “forward-looking information”, within the meaning of Canadian legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur”, “be achieved” or “has the potential to”. Forward looking statements contained in this press release may include statements regarding the future operating or financial performance of DuSolo which involve known and unknown risks and uncertainties which may not prove to be accurate. Actual results and outcomes may differ materially from what is expressed or forecasted in these forward-looking statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Among those factors which could cause actual results to differ materially are the following: market conditions and other risk factors listed from time to time in our reports filed with Canadian securities regulators on SEDAR at www.sedar.com. The forward-looking statements included in this press release are made as of the date of this press release and DuSolo disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation.
For more information please refer to the technical report filed on SEDAR and titled “Bomfim Agro-Mineral Phosphate Project, Technical Report and Initial Resource Estimate Tocabtins and Goiás States, Brazil,” filed on March 5, 2014, effective December 31, 2013, and amended on February 6, 2015. The resource estimate was signed off by Mr. Porfirio Cabaleiro Rodriguez an Associate Consultant of Coffey Consultoria e Serviços Ltda., and was prepared in compliance with the standards of disclosure as set out in NI43-101. Mr. Rodriguez is an “independent qualified person” for the purposes of NI43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators
Disclosure – The Company’s decision to produce DANF, its DANF production targets and cash flow projections were not based on a feasibility study of mineral reserves demonstrating economic and technical viability. Without a technical report demonstrating economic and technical viability, there is increased uncertainty as to whether the Company will be able to economically produce DANF in a long run and as to whether the Company will be confronted with any unforeseen technical impediments. Similarly, the Company has not completed a preliminary economic assessment before making production and project expansion decisions.
Neither the TSX Venture Exchange Inc. nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this press release.