Verde Potash changes strategy for developing Brazil project

21 August 2013 14:20  [Source: ICIS news]

TORONTO (ICIS)--Verde Potash has changed its strategy for the development of its potash project in Brazil as it tries to reduce project risk and up-front capital expenditure, the Toronto-listed firm said on Wednesday.

Verde said that it would develop its Cerrado Verde potash project in Brazil’s Minas Gerais state in two phases – rather than proceed directly to a capital-intensive, larger-scale, production facility, as it had planned previously. 

In phase 1, Verde intends to build a 1,000 tonne/day plant for the production of a controlled-release, non-chloride, multi-nutrient fertilizer. In phase 2, Verde would focus on developing large-scale potassium chloride (KCI) production, it said.

“Verde's new plan is premised on the technical practicality of the project's staged scale-up in order to reduce risk and to accelerate cash flow generation from its large potash resource in Brazil,” the company said.

Verde added that it “engaged in discussions with Brazilian institutions” regarding debt finance for phase 1.

“Securing debt finance for the project is important as it can allow the company to continue to advance the project with minimal or no shareholder dilution – a goal to which management remains committed,” it said.

According to information on Verde's website, total KCl production capacity at the Cerrado project could eventually reach 3m to 4m tonnes/year.

By: Stefan Baumgarten
+1 713 525 2653

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